Helio Corporation Announces Private Placement of Series B Convertible Preferred Stock

BERKELEY, CA, March 11, 2026 — Helio Corporation (the “Company”) has announced a significant capital markets transaction that could have a meaningful impact on its capital structure and potentially its share price. The Company disclosed, via a Form 8-K filing, that on March 5, 2026, it entered into a Securities Purchase Agreement with an accredited investor, resulting in the sale of 1,000 shares of Series B Convertible Preferred Stock for an aggregate purchase price of \$931,500.

Key Details of the Transaction

• Security Sold: 1,000 shares of Series B Convertible Preferred Stock, par value \$0.001 per share.
• Gross Proceeds to Helio Corporation: \$931,500 in cash.
• Purchaser: An accredited investor (name not disclosed), who represented that the shares were acquired for investment purposes only and not with a view toward distribution.
• Unregistered Offering: The securities were sold in a private placement exempt from registration under Section 4(a)(2) of the Securities Act of 1933 and Rule 506(b) of Regulation D. These shares are “restricted securities” and cannot be freely traded unless registered or an exemption is available.

Material Terms of Series B Convertible Preferred Stock

• Conversion Rights: Each share of Series B Preferred Stock is convertible into the Company’s common stock, subject to a beneficial ownership limitation (cannot convert if it would result in over 4.99% ownership of the outstanding common stock).
• Leak-Out Provision: The sale of common shares issued upon conversion is subject to a restriction: sales are limited to 15% of the daily trading volume, plus 20% of any volume in excess of 150,000 shares during a specified period. This provision is intended to mitigate pressure on the market price from large block sales.
• Liquidation Preference: On liquidation, holders of Series B Preferred Stock will be paid 100% of the stated value per share before any distribution to holders of common stock.
• Dividends: No cash dividends will be paid on the Series B Preferred Stock, except for stock dividends or standard adjustments (as described in the Certificate of Designations).
• Redemption: The Series B Preferred Stock is redeemable by Helio Corporation at any time, in whole or in part, at the stated value per share.
• Voting Rights: Holders have no voting power, except as required by law. However, the consent of holders of a majority of the outstanding Series B Preferred Stock is required for any amendment that would adversely affect the rights of the Series B Preferred Stock.
• Anti-dilution Protection: The conversion price of the Series B Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combinations, reclassifications, or similar events affecting the common stock.

Corporate Actions and Governance

• Board Approval: The Board of Directors approved the designation of the Series B Convertible Preferred Stock and the corresponding Certificate of Designations, which outlines the preferences, rights, and limitations of the Series.
• Exhibit Filed: The Certificate of Designations was filed as Exhibit 3.1 to the Form 8-K.

Shareholder Considerations and Potential Price Sensitivity

• Dilution Risk: The Series B Preferred Stock is convertible into common shares, which, upon conversion and sale, could increase the number of shares outstanding and potentially exert downward pressure on the share price, especially as the leak-out provision allows for continued selling (though with volume limitations).
• Control and Governance: While Series B holders have limited voting rights, their approval is required for any changes that may adversely affect their rights, giving them a degree of influence over significant corporate actions affecting their securities.
• Liquidity Event Preference: In the event of a liquidation, holders of Series B Preferred Stock will be paid before common shareholders, which may change the risk profile for common equity holders.
• No Cash Dividends: Common shareholders are reminded that the new preferred class does not carry cash dividend requirements, preserving cash for the company but indicating the preferred shares are primarily a conversion/dilution instrument.

Regulatory and Compliance Notes

• The offering was made pursuant to an exemption from registration, so the securities cannot be immediately resold into the public market, reducing the risk of an immediate flood of common shares but still representing a potential overhang.
• The Company is classified as an “Emerging Growth Company” under SEC rules.

Conclusion

This capital raise provides Helio Corporation with nearly \$1 million in new funding, which may support growth initiatives, working capital, or other corporate purposes. However, the potential conversion of preferred shares into common stock introduces the possibility of dilution for existing shareholders. The leak-out provision is a mitigating factor, but investors should monitor future filings and company announcements for any conversions or sales of common stock by the preferred holder, as these could impact trading liquidity and share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review all company filings and consult their financial advisor before taking any action.

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