Business Context and Reporting Period
Company: Olenox Industries Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 16, 2026
Event: Completion of the acquisition of 100% of the membership interests of CS Digital Ventures, LLC ("CS Digital"), a digital infrastructure company focused on energy-intensive data centers, bitcoin mining, and high-density compute deployments. As of closing, CS Digital had approximately 35 megawatts of installed power capacity in operation.
Key Financial Metrics and Transaction Structure
The filing details the consideration paid for the acquisition rather than standard operating financial metrics (revenue, profit, cash flow) for the reporting period.
| Component | Value/Description |
|---|---|
| Upfront Consideration | $30,000,000 Total |
| - Series E Preferred Stock | $14,000,000 (Stated Value) |
| - Seller Note (Unsecured Promissory Note) | $16,000,000 Principal |
| Warrants Issued | 1,500,000 shares of Common Stock (3 tranches of 500,000) |
| - Exercise Prices | $5.00, $7.00, and $9.00 per share |
| Earnout Potential | Up to $20,000,000 in Series E Preferred Stock |
| - Conditions | Tied to cumulative revenue and Adjusted EBITDA milestones |
Material Changes and Capital Structure
- Acquisition: CS Digital is now a wholly-owned subsidiary of Olenox Industries Inc.
- Debt Obligation: Creation of a new $16,000,000 unsecured promissory note payable to the sellers.
- Equity Restructuring: Holders of Series D Preferred Stock surrendered their shares in exchange for an equal number of Series E Preferred Stock shares.
- Series E Preferred Stock:
- Non-voting (except as required by Delaware law).
- Conversion price fixed at $1.00 per share.
- Subject to a 19.9% "Exchange Cap" on conversion/exercise relative to outstanding Common Stock without stockholder approval.
- No redemption rights, sinking fund, or price-based anti-dilution protection.
Guidance, Outlook, Risks, and Contingencies
Management Commentary and Outlook: The Company expects to scale off-grid, gas-powered digital infrastructure targeting energy-intensive data centers, artificial intelligence, and high-density compute workloads. The Company intends to file a shelf registration statement within 60 days of obtaining stockholder approval to cover the resale of Common Stock issuable upon conversion.
Key Contingencies:
- Stockholder Approval: Required to allow conversion of Series E Preferred Stock and exercise of Warrants to exceed the 19.9% Exchange Cap. The Company must convene a meeting within 90 days of closing.
- Earnout Milestones: Additional $20,000,000 consideration is contingent on CS Digital achieving specific revenue and Adjusted EBITDA targets.
Risks and Uncertainties:
- Ability to integrate CS Digital operations and realize anticipated benefits.
- Ability to service the $16,000,000 Seller Note.
- Volatility in commodity prices (natural gas, electricity) and customer demand for compute services.
- Regulatory and Nasdaq listing developments.
Investor Verification Checklist
- Debt Service Capacity: Verify the Company's liquidity and cash flow projections to service the new $16,000,000 unsecured Seller Note.
- Dilution Impact: Assess the potential dilution from the 1,500,000 warrants and the conversion of Series E Preferred Stock, noting the 19.9% cap pending stockholder approval.
- Earnout Feasibility: Review the specific revenue and Adjusted EBITDA milestones required to trigger the additional $20,000,000 earnout payment.
- Stockholder Approval Timeline: Monitor the schedule for the stockholder meeting required within 90 days to lift the conversion cap.
- Operational Integration: Evaluate the operational status of the acquired 35 megawatts of power capacity and its integration into Olenox's existing infrastructure.