Change Agents (NASDAQ: CHGA) sells $616K notes, 1M $0.0001 warrants
Rhea-AI Filing Summary
Change Agents Corporation (CHGA) entered into a Note Purchase Agreement on August 14, 2026, issuing promissory notes with an aggregate principal of $616,000 (including a $66,000 original issuance discount) for $550,000 in gross proceeds. Net proceeds are allocated to repay $144,000 on a 7% note to Vanquish Funding Group Inc., $125,000 on June 2025 18.75% notes, and $74,000 under a July 2024 Business Loan and Security agreement, with the remainder for working capital and general corporate purposes.
The notes mature on May 14, 2027, bear 7% annual interest (rising to 15% upon default), and are prepayable at 105% of original principal. They include negative covenants restricting additional indebtedness and a “most-favored nations” provision on non-convertible debt. As an inducement, the company issued August 2026 pre-funded warrants to purchase 1,000,000 common shares at an exercise price of $0.0001 per share, subject to Nasdaq Listing Rule 5635(d)’s 19.99% cap until stockholder approval and a beneficial ownership limit of 4.99%, adjustable up to 9.99% with 61 days’ notice. These securities were offered in reliance on Section 4(a)(2) and/or Rule 506(b) exemptions.
Positive
- None.
Negative
- None.
Filing Explained
The filing clarifies that the pre-funded warrants and shares issuable upon exercise were not registered under federal or state securities laws; it describes the warrants as offered and sold, while the shares will be issued only upon exercise, subject to the stated limits.
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
Aggregate principal of August 2026 OID Notes: $616,000
Original issuance discount: $66,000
Gross proceeds from notes: $550,000
+5 more
8 metrics
Aggregate principal of August 2026 OID Notes
$616,000
Promissory notes issued on August 14, 2026, including original issuance discount
Original issuance discount
$66,000
Discount included within the $616,000 aggregate principal
Gross proceeds from notes
$550,000
Cash received from issuance of August 2026 OID Notes
Debt repayment to Vanquish Funding Group
$144,000
Portion of note proceeds used to repay a 7% promissory note
June 2025 notes repayment
$125,000
Repayment of 18.75% notes issued in June 2025
July 2024 loan repayment
$74,000
Repayment under July 2024 Business Loan and Security agreement
Interest rate on August 2026 OID Notes
7% per annum
Base interest rate, increasing to 15% upon an event of default
Pre-Funded Warrant Shares
1,000,000 shares
Common shares purchasable under August 2026 Pre-Funded Warrants
Key Terms
original issuance discount, Pre-Funded Warrants, most-favored nations, Nasdaq Listing Rule 5635(d), +2 more
6 terms
original issuance discount financial
"in the aggregate principal amount of $616,000 (inclusive of a $66,000 original issuance discount)"
Original issuance discount (OID) is the difference between a debt security’s face value and a lower price at which it is sold when first issued, similar to buying a $1,000 loan for $900. Investors receive the full face value at maturity, so the gap boosts the effective yield above the stated interest rate and affects how income is recognized for returns and taxes. For investors, OID changes expected return, cash flow timing, and reported interest income.
Pre-Funded Warrants financial
"the Company issued pre-funded warrants (“August 2026 Pre-Funded Warrants”) to purchase 1,000,000 shares"
Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.
most-favored nations financial
"The Company granted the investors in the Note Purchase Agreement a “most-favored nations” provision"
Nasdaq Listing Rule 5635(d) regulatory
"for purposes of Nasdaq Listing Rule 5635(d), would exceed 19.99% of the shares"
Nasdaq Listing Rule 5635(d) is a stock-exchange rule that determines when a company must get shareholder approval before issuing new shares tied to conversions or exercises of existing convertible securities, options or warrants. It matters to investors because it controls potential dilution of their holdings and changes in voting power—think of it like a rule that decides whether a previously agreed‑upon coupon can be redeemed without asking the group again.
beneficial ownership financial
"A holder may not exercise any portion of the Common Warrants to the extent the Purchaser would own more than 4.99% of the outstanding Common Stock"
Beneficial ownership means the person or entity that actually enjoys the benefits of owning shares or other assets — such as receiving dividends, voting rights, or price gains — even if the legal title is held in another name. For investors it matters because knowing who truly controls and profits from a company reveals who can influence decisions, exposes potential conflicts of interest or hidden concentration of power, and affects transparency and risk in the stock.
Regulation D regulatory
"in reliance upon exemptions from the registration requirements of the Securities Act, including Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D"
Regulation D is a set of rules that govern how companies can raise money from investors without going through the full process required for public stock offerings. It provides simplified options for private placements, making it easier for companies to seek investments from a smaller group of investors. For investors, it offers opportunities to invest in private companies, often with fewer restrictions, but also with different levels of risk and disclosure.
FAQ
What financing transaction did Change Agents Corporation (CHGA) complete on August 14, 2026?
Change Agents Corporation issued $616,000 in promissory notes with a $66,000 original issuance discount for $550,000 gross proceeds. The notes mature on May 14, 2027, carry 7% annual interest, and are prepayable at 105% of original principal.
How will CHGA use the proceeds from the August 2026 OID Notes?
CHGA will use net proceeds to repay $144,000 on a 7% Vanquish Funding Group note, $125,000 on June 2025 18.75% notes, and $74,000 under a July 2024 Business Loan, with remaining funds for working capital and general corporate purposes.
What are the key terms of CHGA’s August 2026 OID Notes?
The August 2026 OID Notes have $616,000 aggregate principal, 7% annual interest (rising to 15% upon default), and mature on May 14, 2027. They may be prepaid at 105% of original principal and include negative covenants restricting additional indebtedness.
What equity-linked securities did CHGA issue with the August 2026 financing?
CHGA issued August 2026 pre-funded warrants to purchase 1,000,000 common shares at an exercise price of $0.0001 per share. The warrants are immediately exercisable, subject to Nasdaq Listing Rule 5635(d)’s 19.99% cap on issuances until stockholder approval is obtained.
What ownership limits apply to CHGA’s August 2026 Pre-Funded Warrants?
A holder generally may not exercise pre-funded warrants if it would exceed 4.99% ownership of CHGA’s common stock. This beneficial ownership limit can be increased to up to 9.99% with at least 61 days’ prior written notice to the company.
AI-generated analysis. How Rhea-AI works. Not financial advice.
