{"url_path":"/sec/daio/8-k/2026-06-23/item-3-02","section_key":"item-3-02","section_title":"Item 3.02 Unregistered Sales of Equity Securities.**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-23","source_url":"https://www.sec.gov/Archives/edgar/data/351998/0001654954-26-006112-index.html","accession_number":"0001654954-26-006112","cik":"0000351998","ticker":"DAIO","issuer_name":"DATA I/O CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/351998/0001654954-26-006112-index.html","primary_entity_key":"0000351998","primary_entity_name":"DATA I/O CORP"},"word_count":1107,"has_tables":true,"body_markdown":"**Item 3.02 Unregistered Sales of Equity Securities.**\n\n \n\nOn June 17, 2026, Data I/O Corporation (the “Company”) closed its previously announced private placement. As previously disclosed on the Company’s Current Report on Form 8-K filed on May 19, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Lytton-Kambara Foundation and Alice W. Lytton Family LLC (the “Investors”) for the sale and issuance to the Investors of securities consisting of the following: 869,840 shares of Common Stock (the “Shares”), convertible debentures in the principal amount of $6,825,400.00 (the “Note”) and warrants to purchase an aggregate of 1,080,000 shares of common stock (the “Warrant”) for an aggregate purchase price of $9 million.\n\n \n\n**Terms of the Note**\n\n \n\nThe five-year Note matures on June 16, 2031, unless earlier converted, and bears interest at a rate of 4.0% per annum, payable at semiannually on November 1 and May 1, beginning on the first such date after the original issue date of the note, on each conversion date (as to that principal amount then being converted), and on the maturity date. The interest is paid in cash, or at the Company’s option and under certain circumstances, in Series B Convertible Preferred Stock (the “Preferred Stock”). The Investors may convert the Note into Shares of Preferred Stock at the conversion price. The conversion price is $1,000 per share of Preferred Stock. Upon an event of default, the default interest rate increases to 18% per annum. If shareholders approve a proposal that is to be proposed at the Company’s 2026 annual meeting of shareholders, the Note will automatically convert into Preferred Stock. The shareholder proposal relates to the approval of the potential issuance of 20% or more of our issued and outstanding common stock at prices that may be less than the Nasdaq Minimum Price (as defined by NASDAQ) to the holders of the Note and to approve any change of control that may be deemed to occur in connection with such issuance.\n\n \n\n \n\n1\n\n \n\n \n\nThe foregoing description of the Note does not purport to be complete and is qualified in its entirety by the full text of the form of Note, a copy of which is filed herewith as Exhibit 10.1 and incorporated by reference into this Item 3.02.\n\n \n\n**Terms of the Series B Convertible Preferred Stock**\n\n \n\nThe Preferred Stock is non-voting, except as required by law. The Preferred Stock accrues dividends at the rate per annum of 4% of the Stated Value of such share, plus the amount of previously accrued dividends, compounded annually, shall accrue on each share then outstanding (the “Accruing Dividends”). Accruing Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. The Stated Value is $1,000 per share. Each share of Preferred Stock shall be convertible into that number of shares of Common Stock (subject to the limitations set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Certificate of Designation”) relating to limitations on beneficial ownership and the Investor Issuance Cap) determined by dividing the Stated Value plus any Accruing Dividends of such share of Preferred Stock by the Conversion Price. The initial conversion price is $2.50 per share of common stock and it subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock. If the principal amount of the Note was converted into Preferred Stock, the Stated Value of the Preferred Stock, without regard to Accruing Dividends of, would be convertible into approximately 2.73 million shares of common stock (subject to the limitations set forth in the Certificate of Designation relating to limitations on beneficial ownership and the Investor Issuance Cap).\n\n  \n\nA copy of the Certificate of Designation is filed herewith as Exhibit 3.1 and incorporated by reference into this Item 3.02.\n\n \n\n**Terms of the Warrants**\n\n \n\nThe Warrants are exercisable for an aggregate of 1,080,000 shares of common stock at $3.00 per share for a period of five years. The exercise price is subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock.\n\n \n\nThe foregoing description of the Warrant does not purport to be complete and is qualified in its entirety by the full text of the form of Warrant, a copy of which is filed herewith as Exhibit 10.2 and incorporated by reference into this Item 3.02.\n\n \n\nThe Note, the Preferred Stock and the Warrants are referred to as the “Convertible Securities.” The Convertible Securities may not be converted or exercised into shares of Common Stock to the extent (i) such conversion or issuance would result in the investor having beneficial ownership of more than 9.99% of then outstanding shares of Common Stock or (ii) absent stockholder approval, the aggregate number of shares issued would exceed 1,869,470 shares of Common Stock (collectively, the “Investors Issuance Cap”).\n\n \n\n \n\n2\n\n \n\n \n\nThe Shares and Convertible Securities to be issued and sold will be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and/or Regulation D under the Securities Act (“Regulation D”), and in reliance on similar exemptions under applicable state laws.\n\n \n\nThe Company has entered into a Registration Rights Agreement (“Registration Rights Agreement”) and has agreed to file a registration statement within 30 days of entering into the Registration Rights Agreement with the Securities and Exchange Commission registering the resale of the shares of common stock to be issued in the transaction as well as the common stock issuable upon the exercise of the Warrants and upon conversion of the Preferred Stock.  The Registration Rights Agreement contains customary indemnification provisions and other customary obligations.\n\n \n\nThe foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the form of Registration Rights Agreement, a copy of which is filed herewith as Exhibit 10.3 and incorporated by reference into this Item 3.02.\n\n \n\nEach of the Investors has represented that it is an accredited investor within the meaning of Rule 501(a) of Regulation D or a qualified institutional buyer as that term is defined in Rule 144A(a) under the Securities Act, and will be acquiring the Shares and Convertible Securities for investment purposes only and not with a view to any future distribution or sale in violation of applicable securities laws. The Shares and Convertible Securities were offered without any general solicitation by the Company or its representatives."}