Business Context and Reporting Period
This Form 8-K, dated August 20, 2026, reports material events for Expion Energy Inc. (formerly Expion360 Inc.), a Nevada corporation trading on the Nasdaq Capital Market under the symbol XPON. The filing details a strategic pivot to oil and gas exploration, a significant capital raise, and executive leadership changes effective in late August 2026.
Key Financial Metrics and Capital Structure
- Capital Raise: Entered into a private placement for $9,000,000 in aggregate principal amount of 8% Convertible Debentures due August 21, 2029.
- Net Proceeds: Expected net proceeds of approximately $8,200,000 after deducting placement agent fees (8% of gross proceeds) and estimated offering expenses.
- Debt Terms: Debentures accrue interest at the Applicable Federal Rate initially, increasing to 8% per annum after the first anniversary. Interest is payable quarterly in cash. In the event of default, the rate increases by an additional 5% per annum.
- Equity Instruments: Issuance of Series A-1 Convertible Preferred Stock (initial conversion price $4.25) and Warrants to purchase up to 2,117,219 shares of Common Stock (exercise price $4.25, 5-year term).
- Additional Investment Right (AIR): Purchasers have the right to purchase up to an additional $91,000,000 in convertible preferred stock.
- Acquisition Cost: Agreed to acquire a target company for an adjusted cash purchase price of $3,425,000 (original $3,500,000 less $100,000 CD and $175,000 earnest money).
- Exploration Commitment: Committed up to $4,000,000 to finance a leasing program, with a minimum of $2,500,000 dedicated to leasing.
Material Changes and Strategic Transactions
- Asset Acquisition: Acquired 100% of the membership interests of a target company holding an oil and gas exploration opportunity in Eastern Louisiana. Assets include approximately 3,000 net acres of leasehold, a wellbore, and mineral title research covering 13,000 net acres.
- Corporate Name Change: Changed name from "Expion360 Inc." to "Expion Energy, Inc." effective August 20, 2026, to align with the new energy platform.
- Executive Transition: Joseph Hammer resigned as Chief Executive Officer (CEO) effective August 24, 2026, remaining as interim Chairman. Kevin Sellers was appointed CEO and Director effective immediately.
- Related Party Transactions: The lead purchaser in the private placement is Five Narrow Lane LP, affiliated with former CEO Joseph Hammer. The new CEO, Kevin Sellers, has an indirect material interest in the Overriding Royalty Interest (ORRI) retained by Cynergy Advisors, LLC in the exploration agreement.
Outlook, Risks, and Management Commentary
- Use of Proceeds: Funds will be used primarily for the acquisition of oil and gas assets in Eastern Louisiana and general corporate working capital.
- Operational Milestones: The company is required to initiate a mandatory directional drilling operation (lateral length of no less than 4,000 feet) by February 15, 2027.
- Shareholder Approval: The automatic conversion of debentures into preferred stock and the issuance of shares exceeding 19.99% of outstanding common stock are contingent upon shareholder approval. A proxy statement will be filed subsequently.
- Risks and Contingencies:
- Dilution: The transaction includes significant anti-dilution protections and warrants that could result in substantial dilution to existing shareholders.
- Exploration Risk: The business model relies on the success of drilling operations in Eastern Louisiana, which carries inherent exploration risks.
- Liquidity: The company is subject to negative covenants restricting additional indebtedness and dividends while at least $2,250,000 of debentures remain outstanding.
- Management Compensation: New CEO Kevin Sellers has a base salary of $285,000 (increasing to $400,000 upon production milestones) and is eligible for a transaction bonus of 2% to 5% of sale proceeds in a change of control.
Investor Verification Checklist
- Verify the status of the pending shareholder vote required to approve the conversion of debentures and the issuance of preferred stock.
- Review the definitive proxy statement for details on the voting proposals and the full extent of potential dilution from the AIR and warrant exercises.
- Confirm the specific terms of the "Floor Price" ($0.72) and anti-dilution adjustments in the Certificate of Designation for Series A-1 Preferred Stock.
- Assess the financial health and track record of the target company's assets in Eastern Louisiana and the feasibility of the mandatory drilling operation by February 2027.
- Monitor the relationship between the new CEO (Kevin Sellers) and Cynergy Advisors, LLC, given the ORRI interest and consulting agreement.