Black Hawk inks $300K sponsor convertible note
Black Hawk Acquisition Corp (BKHA) entered into a financing arrangement with its sponsor, Black Hawk Management LLC, by issuing a convertible promissory note with a principal amount of up to $300,000.
Rhea-AI Filing Summary
Black Hawk Acquisition Corp (BKHA) entered into a financing arrangement with its sponsor, Black Hawk Management LLC, by issuing a convertible promissory note with a principal amount of up to $300,000. The company may draw advances under the note for working capital and extension fees, with total advances capped at $300,000.
The note bears 10% annual interest starting July 8, 2026, for one year. The outstanding balance becomes due upon either completion of the company’s initial business combination (a DeSPAC transaction) or liquidation. In a liquidation, all amounts are repaid in cash. If a DeSPAC transaction closes, the sponsor may choose repayment in cash or convert the outstanding principal into post-combination common stock at a $1.00 per share conversion price, with shares rounded up to the nearest whole share and entitled to registration rights. The note is unsecured, may be prepaid at any time without penalty, and the sponsor has waived any claim against funds held in the SPAC’s trust account. The issuance and any conversion shares rely on the Section 4(a)(2) exemption from registration under the Securities Act.
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8-K Event Classification
4 items: 1.01, 2.03, 3.02, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Convertible note principal cap: $300,000
Interest rate: 10% per annum
Conversion price: $1.00 per share
+2 more
5 metrics
Convertible note principal cap
$300,000
Maximum aggregate principal amount of advances under the note
Interest rate
10% per annum
Interest on the note commencing July 8, 2026 for one year
Conversion price
$1.00 per share
Price at which principal may convert into common stock upon DeSPAC
Conversion share calculation
Principal divided by $1.00, rounded up
Method to determine number of conversion shares if sponsor elects conversion
Securities Act exemption
Section 4(a)(2)
Exemption for issuance of the note and any conversion shares
Key Terms
convertible promissory note, DeSPAC Transaction, trust account, registration rights, +1 more
5 terms
convertible promissory note financial
"issued a convertible promissory note (the “Note”) in the principal amount"
A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.
DeSPAC Transaction financial
"closing of the Company’s initial business combination (a “DeSPAC Transaction”)"
A de-SPAC transaction is the business combination where a blank-check company formed to raise money (a SPAC) merges with a private company, turning that private business into a publicly traded company without a traditional IPO. Think of it as a fast-track doorway from private ownership to the stock market; investors watch it because it determines the new company’s shares, valuation, and how much risk or dilution existing shareholders face.
trust account financial
"waived any claim against the funds held in the Company’s trust account"
A trust account is a special bank or brokerage account where assets are held and managed by a designated person or firm (the trustee) for the benefit of another person or group (the beneficiary). It matters to investors because it separates assets from personal or corporate funds, can protect assets, control how and when money is used, and may affect tax or legal rights—think of it as a locked drawer opened only under agreed rules.
registration rights regulatory
"The conversion shares will be entitled to registration rights and the holders"
Registration rights are contractual promises that let investors require a company to file paperwork with securities regulators so those investors can sell their shares to the public. They matter because they create a path to liquidity and an exit plan—without them, investors may be stuck holding shares for a long time. Think of them like a reserved ticket that guarantees access to a public marketplace when the holder is ready to sell.
Section 4(a)(2) of the Securities Act regulatory
"pursuant to the exemption from registration contained in Section 4(a)(2)"
A legal exemption that allows a company to sell securities directly to a limited group of buyers without registering the offering with the Securities and Exchange Commission. Think of it like a private sale among known parties rather than a public auction: it can speed fundraising and reduce disclosure requirements, but it also means less public information, lower liquidity and resale restrictions—factors investors should consider when weighing risk and exit options.
FAQ
What financing agreement did BKHA enter into with its sponsor?
Black Hawk Acquisition Corp issued a convertible promissory note to Black Hawk Management LLC with a principal amount of up to $300,000. The company can request advances for working capital and extension fees, subject to this overall cap.
What are the key terms of the BKHA $300,000 convertible note?
The note has a principal cap of $300,000, bears 10% interest per year starting July 8, 2026, and runs for one year. It is unsecured, may be prepaid without penalty, and becomes due at the DeSPAC closing or company liquidation.
How can the BKHA sponsor convert the note into equity?
If a DeSPAC transaction closes, Black Hawk Management LLC may elect to convert the outstanding principal into post-business-combination common stock at a $1.00 per share conversion price, with the share count rounded up to the nearest whole share and entitled to registration rights.
What happens to the BKHA note if the SPAC liquidates?
If Black Hawk Acquisition Corp liquidates, all amounts due under the note will be repaid in cash. The sponsor has waived any claim against funds in the SPAC’s trust account established for the initial public offering.
Under what securities law exemption was the BKHA note issued?
The note was issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as a transaction not involving a public offering. Any shares issued upon conversion at DeSPAC would also rely on this exemption.
AI-generated analysis. How Rhea-AI works. Not financial advice.
