MGNC Mag Magna Corp

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Executive Summary

Mag Magna Corp. entered into three separate securities purchase agreements between April 1 and May 6, 2026, issuing convertible redeemable notes totaling $463,333.33 in principal (net cash proceeds of ~$417,000 after original issue discounts and legal fees) to CFI Capital, Silvercrest Hybrid Capital, and GW Capital Investments. The notes carry deeply dilutive conversion terms (60% of the lowest trading price over the prior 20 days, dropping to 45% on default), mandatory share reserves of millions of shares, and onerous prepayment penalties. Proceeds are for general working capital. Separately, the board established an Executive Committee and an Audit Committee. The combination of repeated distressed financing with toxic conversion features signals severe cash constraints and massive potential dilution for existing shareholders.

Key Financial Metrics

Actionable Insight

Key Facts

• Issued $170,000 principal 6% convertible note to CFI Capital on April 1, 2026, net proceeds $153,000 (after $17,000 OID).
• Issued $170,000 principal 6% convertible note to Silvercrest Hybrid Capital on April 29, 2026, net proceeds $153,000 (after $17,000 OID), plus 30,000 commitment shares.
• Issued $123,333.33 principal 12% convertible note to GW Capital Investments on May 6, 2026, net proceeds $111,000 (after $12,333.33 OID), plus 20,000 commitment shares.
• All three notes are convertible at 60% of the lowest trading price over the prior 20 trading days, dropping to 45% on default.
• Mandatory share reserves: 2,083,333 shares for CFI note, 2,023,810 for Silvercrest note, 1,447,574 for GW Capital note — totaling over 5.55 million shares reserved.
• Prepayment penalties escalate from 105% to 140% of principal within 180 days; failure to prepay forfeits future prepayment rights.
• Proceeds used for general working capital — no revenue-generating or strategic use disclosed.
• Board established an Executive Committee (Sangha, Khurshid) and an Audit Committee (Demir, Marcus, Gregory) in February-April 2026.

Financial Impact

Total principal of $463,333.33 raised, net cash ~$417,000 after $46,333.33 in OID and legal fees. Potential dilution from full conversion of all three notes could exceed 5.55 million shares at current conversion prices, representing a massive percentage of outstanding shares for an OTC-traded micro-cap.

Risk Factors

• Massive dilution from conversion of all three notes at deeply discounted prices (60% of lowest 20-day trading price).
• Default triggers (delisting, reporting failure, DTC chill) would drop conversion price to 45%, accelerating dilution.
• Cross-default provisions across notes could trigger acceleration of all debt on any single default.
• No disclosed revenue or business progress — proceeds used solely for working capital, suggesting ongoing cash burn without path to profitability.
• OTC-traded micro-cap with no exchange listing — high risk of price manipulation and illiquidity.

Market Snapshot

Documents Analyzed

This report is based on 7 SEC documents filed with EDGAR.

US Market Status