DAIO

Business Context and Reporting Period

Company: Data I/O Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: May 14, 2026
Event: Announcement of a private placement financing agreement with Lytton-Kambara Foundation and Alice W. Lytton Family LLC.

Key Financial Metrics and Transaction Details

This filing details a capital raise rather than operational financial performance. The following metrics relate to the transaction structure:

• Total Aggregate Purchase Price: $9,000,000
• Securities Issued:
  • 869,840 shares of Common Stock
  • Convertible Debentures (Note) principal amount: $6,825,400
  • Warrants to purchase 1,080,000 shares of Common Stock
• Note Interest Rate: 4.0% per annum (increases to 18% upon default)
• Preferred Stock Dividend Rate: 4% per annum (cumulative, compounded annually)
• Warrant Exercise Price: $3.00 per share

Material Changes and Transaction Terms

The filing discloses the entry into a Securities Purchase Agreement. Key terms include:

• Conversion Mechanics: The Note may be converted into Series B Convertible Preferred Stock at $1,000 per share. If converted, the principal amount would yield approximately 2.73 million shares of Common Stock (subject to caps).
• Preferred Stock Conversion: Initial conversion price is $2.50 per share of Common Stock.
• Automatic Conversion Trigger: The Note will automatically convert into Preferred Stock if shareholders approve a specific proposal at the 2026 annual meeting.
• Ownership Caps: Conversion or exercise is limited if it results in the investor holding more than 9.99% of outstanding Common Stock or if aggregate issuance exceeds 1,869,470 shares without shareholder approval.
• Closing Conditions: Completion is subject to customary conditions, including regulatory approval.

Guidance, Risks, and Contingencies

Regulatory and Legal Status:

• The securities are issued under Section 4(a)(2) and Regulation D exemptions (no public offering).
• Investors represented as accredited investors or qualified institutional buyers.
• The Company agreed to file a registration statement for the resale of the Common Stock and shares issuable upon warrant exercise or preferred stock conversion.

The filing incorporates by reference a press release (Exhibit 99.2) but does not provide additional forward-looking guidance or management commentary within the text of this 8-K.

Completion of the transaction is contingent upon regulatory approval and customary closing conditions.

Investor Verification Checklist

• Verify the status of the "customary closing conditions" and regulatory approvals required to finalize the $9 million transaction.
• Confirm the specific shareholder proposal mentioned that would trigger the automatic conversion of the Note into Preferred Stock.
• Review the Certificate of Designation for the Series B Preferred Stock to understand limitations on beneficial ownership and the Investor Issuance Cap.
• Monitor the filing of the registration statement for the resale of the issued securities.
• Assess the dilution impact of the potential issuance of up to 2.73 million shares of Common Stock upon conversion of the Note.