{"url_path":"/sec/shazw/8-k/2026-05-21/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-05-21","source_url":"https://www.sec.gov/Archives/edgar/data/2068385/0001493152-26-024865-index.html","accession_number":"0001493152-26-024865","cik":"0002068385","ticker":"SHAZ","issuer_name":"SharonAI Holdings Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2068385/0001493152-26-024865-index.html","primary_entity_key":"0002068385","primary_entity_name":"SharonAI Holdings Inc."},"word_count":1755,"has_tables":true,"body_markdown":"**Item\n1.01 Entry into a Material Definitive Agreement**\n\n \n\n*6.00%\nConvertible Senior Notes due 2031 and Indenture*\n\n \n\nOn\nApril 28, 2026, SharonAI Holdings Inc. (the “Company”) filed a Current Report on Form 8-K disclosing the entry into a Securities\nPurchase Agreement (the “Purchase Agreement”) dated April 26, 2026 with certain qualified institutional buyers relating to\nthe private offering (the “Offering”) of $350 million aggregate principal amount of the Company’s 6.00% Convertible\nSenior Notes due 2031 (the “Notes”). The transactions contemplated by the Purchase Agreement closed on May 20,\n2026.\n\n \n\nOn\nMay 18, 2026, the Company issued the Notes in the Offering certain qualified institutional buyers (the “Purchasers”) who\nexecuted the Purchase Agreement pursuant to the terms and conditions of an Indenture (the “Indenture”) dated May 18,\n2026 among the Company, certain of the Company’s material subsidiaries named in the Indenture (the Subsidiary\nGuarantors”), and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “Trustee”). The\nNotes were initially issued to Cede and Co., as depositary as a Global Note and the settlement of the Notes with Purchasers occurred\nvia delivery versus payment on May 20, 2026.\nThe Notes are senior, unsecured obligations of the Company and will mature on May 1, 2031, unless earlier converted or repurchased.\nInterest on the Notes will accrue at a rate of 6.00% per year from the first issuance date of the Notes and will be payable\nquarterly in arrears on January 1, April 1, July 1, and October 1 of each year, beginning on the first such date that is at least 30\ncalendar days after the initial issuance date of the Notes. Holders of the Notes may convert all or any portion of their Notes at\nany time, in integral multiples of $1.00 principal amount, for shares of Common Stock, at the option of the holder.\n\n \n\nThe\nNotes initially be represented by one or more registered notes in global form, but may, in certain circumstances, be exchanged for Notes\nin definitive form and will be issued in principal amount denominations of $1,000 or any integral multiple of $1,000 in excess thereof,\n\n \n\nEach\nholder has the right to convert all or any portion of its Notes, plus accrued and unpaid interest on such Notes, subject to the\nRestricted Beneficial Ownership Percentage (as defined below).\nThe conversion rate for the Notes will initially be 20.7292 shares of the Company’s Class\nA ordinary common stock (“Common Stock”) per $1,000 of the sum of the principal amount of Notes plus accrued and\nunpaid interest on such Notes, which is equivalent to a conversion price of approximately $48.24 per share of Common Stock. The\ninitial conversion price of the Notes represents a premium of approximately 20% above the Nasdaq Minimum Price (as defined in Nasdaq\nRule 5635(d)) at the time the Purchase Agreement was executed. The conversion rate for the Notes is subject to adjustment from time\nto time in accordance with the terms of the Indenture, including a weighted average adjustment with respect to dilutive issuances\nprovided that in no event will the Conversion Rate exceed 24.8750 shares of Common Stock per $1,000 of the sum of the principal\namount of Notes plus accrued and unpaid interest on such Notes (which is based on the Nasdaq Minimum Price of $40.201 on the date\nthe Purchase Agreement was executed). In addition, following certain corporate events that occur prior to the maturity date of the\nNotes, the Company will, under certain circumstances, increase the conversion rate of the Notes for a holder who elects to convert\nits Notes in connection with such a corporate event. The Notes are not redeemable by the Company. The maximum of 8,706,250\nshares of the Common Stock may be issued upon conversion of the Notes based on the maximum conversion rate of 24.8750 shares of\nCommon Stock per $1,000 of the principal amount of Notes (which\nmaximum amount increases to 11,292,009 shares if all accrued and unpaid interest on such Notes is converted into Common\nStock).\n\n \n\nAny\ntime after the date that is eighteen months after the initial issuance date of the Notes and on or before the 20th VWAP Trading\nDay immediately preceding the maturity date, the Company has the right to force convert all, or any portion of the Notes, but only if\n(i) the Daily VWAP for at least 20 out of 30 consecutive VWAP Trading Days ending on, and including the VWAP Trading Day immediately\nbefore the date the Company gives notice of the forced conversion, exceeds 200% of the Conversion Price (subject to adjustment for reverse\nand forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the\ninitial issuance date of the Notes); (ii) the daily dollar trading volume (as reported on Bloomberg) of the Common Stock on the Exchange\nfor at least 20 out of 30 consecutive VWAP Trading Days ending on, and including the VWAP Trading Day immediately before the date the\nCompany gives notice of the forced conversion is at least $50 million and (iii) the Liquidity Conditions (as defined in the Indenture)\nare satisfied. No shares of Common Stock will be issued to a holder in excess of its restricted beneficial ownership percentage, which\nis initially 4.99% (and subject to increase on the terms set forth in the Indenture) (the “Restricted Beneficial Ownership Percentage”).\nInstead, in lieu of delivery of such shares of Common Stock in excess of the Restricted Ownership Percentage to the applicable Holder,\nthe Company will issue pre-funded warrants (the “Pre-Funded Warrants”) exercisable for such excess shares of Common Stock\nto such Holder. Such Pre-Funded Warrants will be exercisable in perpetuity, issued in book-entry form, have an exercise price of $0.0001\nper share of Common Stock, will have exercise blockers equal to the Restricted Beneficial Ownership Percentage.\n\n \n\n-2- \n\n \n\n \n\nIf\nthe Company undergoes a Fundamental Change (as defined in the Indenture), then, subject to certain conditions and except as described\nin the Indenture, holders of the Notes may require the Company to repurchase for cash all or any portion of their Notes at a fundamental\nchange repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any,\nto, but excluding, the fundamental change repurchase date.\n\n \n\nThe\nNotes were fully and unconditionally guaranteed on a senior unsecured basis by the Subsidiary Guarantors named in the Indenture, subject\nto the terms of the Indenture.\n\n \n\nThe\nIndenture includes customary affirmative and negative covenants, including a debt maintenance covenant and a prohibition on incurring\nsecured debt in excess of $25 million. The Indenture also sets forth certain events of default after which the Notes may be declared\nimmediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which\nthe Notes become automatically due and payable, which include the following:\n\n \n\n●\ncertain\npayment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day\ncure period);\n\n \n \n\n●\nfailure\nby the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s\nconversion right;\n\n \n \n\n●\nthe\nCompany’s failure to issue the Fundamental Change Repurchase Notice (as defined in the Indenture) within specified periods\nof time set forth in the Indenture;\n\n \n \n\n●\nthe\nCompany’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate\nwith or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially\nall of the assets of the Company and its subsidiaries, taken as a whole, to another person;\n\n \n \n\n●\na\ndefault by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived\nwithin 60 days after notice is given in accordance with the Indenture;\n\n \n \n\n●\ncertain\ndefaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $7.5 million;\n\n \n \n\n●\ncertain\nevents of bankruptcy, insolvency or reorganization of the Company or any of the Company’s significant subsidiaries and in the\ncase of any involuntary case or proceeding which remains undismissed and unstayed for a period of 60 consecutive days;\n\n \n \n\n●\na\nfinal judgment or judgments for the payment of $7,500,000 (or its foreign currency equivalent) or more (excluding any amounts covered\nby insurance) in the aggregate rendered against the Company or any significant subsidiary, which judgment is not discharged, bonded,\npaid, waived or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced,\nor (ii) the date on which all rights to appeal have been extinguished; or\n\n \n \n\n●\na\nSubsidiary Guarantee with respect to the Notes ceases to be in full force and effect or the Company or any Subsidiary Guarantor denies\nor disaffirms its obligations under the Indenture or any Subsidiary Guarantee with respect to the Notes.\n\n \n\n-3- \n\n \n\n \n\nIf\ncertain bankruptcy and insolvency-related events of default occur with respect to the Company, the principal of, and accrued and unpaid\ninterest, if any, on, all of the Notes then outstanding shall automatically become due and payable. If an event of default with respect\nto the Notes, other than certain bankruptcy and insolvency-related events of default with respect to the Company, occurs and is continuing,\nthe Trustee, by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Notes by notice to the Company\nand the Trustee, may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the outstanding Notes to be due\nand payable. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company so elects, the sole remedy for an\nevent of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture will, for the\nfirst 180 days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the\nNotes.\n\n \n\nThe\nforegoing summary of the Indenture, the Notes and the Guarantees are qualified in its entirety by reference to the copy of the Indenture,\nthe Note and the form of Guarantee attached as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3, respectively, to this Current Report on Form\n8-K, and such Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3 are incorporated herein by reference."}