Filing Analysis
Helio Corp entered into multiple promissory note agreements with institutional investors to raise capital, including two bridge notes and one convertible note. The terms include significant discounts, high default interest rates, and aggressive conversion features.
🚩 Red Flags
- Aggressive 'death spiral' conversion feature: Conversion price is 65% of the lowest trading price, which can lead to massive dilution.
- High cost of capital: Includes significant original issue discounts and high default interest rates (22%).
- Events of default include delisting or trading suspension, indicating a precarious regulatory/listing position.
- Short-term debt obligations with structured repayment schedules starting June 2026.
📋 Key Facts
- Issued two unsecured Bridge Notes for $65,205 each (totaling $130,410) with a maturity date of October 15, 2026.
- Issued one unsecured Convertible Note for $127,010 maturing on December 15, 2026.
- Bridge Notes include a 12% upfront interest charge and total repayment amounts of $73,029 per note.
- Convertible Note allows holders to convert into common stock at 65% of the lowest trading price during the ten trading days prior to conversion (after 180 days).
- Default interest rate for all notes is set at 22% per annum.
Helio Corporation entered into exchange agreements with its CEO and Chief Engineer to convert over $1M in debt into 7.39 million shares of common stock at a conversion price of $0.142971 per share. Additionally, the company received a default notice on a $250,000 secured promissory note due November 5, 2025.
🚩 Red Flags
- Significant dilution: Issuance of over 7.3 million restricted/control shares to insiders.
- Default Notice: A $250,000 secured note is in default as of November 5, 2025, with the holder demanding repayment.
- Related-party transactions: Debt conversion involving the CEO and a Board member.
- Liquidity concerns implied by the need to convert insider debt into equity rather than cash.
📋 Key Facts
- CEO Gregory T. Delory exchanged $315,188.36 in debt for 2,204,561 shares of common stock.
- Chief Engineer Paul S. Turin exchanged $742,576.73 in debt for 5,193,898 shares of common stock.
- Conversion price was set at a VWAP of $0.142971 per share based on the preceding 20 trading days.
- The company received a notice of default regarding an Amended and Restated Secured Promissory Note ($250,000 principal) that matured on November 5, 2025.
- Total new shares issued via these exchanges: 7,398,459 shares.
Helio Corporation received a Notice of Default from holders of two secured promissory notes totaling $900,000 following the company's failure to make payments on November 5, 2025. The company is currently evaluating its capital structure and exploring potential transaction structures with noteholders.
🚩 Red Flags
- Failure to meet debt maturity obligations (Default event).
- Totaling $900,000 in secured debt for a micro-cap company represents significant liquidity risk.
- Engaging strategic advisors to evaluate 'potential alternatives' often precedes restructuring or bankruptcy filings.
- Uncertainty regarding the outcome of discussions with noteholders.
📋 Key Facts
- Received Notice of Default via email on November 20, 2025.
- Default relates to two secured promissory notes: $400,000 (dated Oct 15, 2024) and $500,000 (dated Oct 16, 2024).
- Both notes carry an interest rate of 9.75% per annum.
- The maturity date for both notes was November 5, 2025.
- Notes contain a 15-day contractual cure period following written notice.
- Company has engaged a financial and strategic advisor to evaluate capital structure alternatives.
Helio Corporation announced the departure of interim CFO Erick Frim on September 21, 2025. Following his exit, CEO Gregory Delory has assumed the responsibilities of principal financial and accounting officer.
🚩 Red Flags
- Loss of specialized financial leadership (interim CFO) in a micro-cap environment.
- Concentration of control: The CEO is now acting as both Chief Executive Officer and Principal Financial/Accounting Officer, which increases agency risk and reduces internal oversight.
📋 Key Facts
- Erick Frim (Partner of CFO Squad LLC) ceased serving as interim CFO and principal financial/accounting officer on September 21, 2025.
- The departure was not due to any disagreement regarding operations, policies, or practices.
- CEO Gregory Delory has assumed the role of principal financial and accounting officer in an interim capacity.
Helio Corporation entered into a $275,000 promissory note agreement with an accredited investor on August 26, 2025. The deal includes convertible features at a significant discount and requires monthly amortization starting in February 2026.
🚩 Red Flags
- Death Spiral Provision: The note allows conversion at a 10% discount to the lowest closing price over 10 days upon default or missed payments, which can lead to massive dilution.
- Cash Drain: Requires monthly amortization payments starting in early 2026, creating immediate liquidity pressure.
- Most Favored Nation (MFN) Clause: Any future financing with better terms will automatically apply to this note, potentially complicating future capital raises.
- Contingent Repayment: The holder can require the company to use up to 25% of proceeds from any future Equity Line of Credit or Reg A offering to repay the note.
📋 Key Facts
- Issued a $275,000 promissory note with a $25,000 original issue discount (OID).
- Note bears 10% interest per annum and matures on August 26, 2026.
- Issued 25,000 unregistered shares as additional consideration to the Buyer.
- Net proceeds from the sale are approximately $200,000 after fees.
- Conversion price is set at a 10% discount (90%) of the lowest closing price during the 10 trading days prior to conversion upon default or missed payments.
- Includes a 'most favored nation' provision for the holder.
- Amortization payments begin February 26, 2026.
Helio Corporation entered into Stockholder Pledge Agreements with a former director/officer and the current COO to secure $900,000 in outstanding promissory notes. The filing highlights a dispute regarding an alleged default on interest payments mentioned in the agreements.
🚩 Red Flags
- Related-party transactions: Current COO (Paul Turin) and former officer are pledging shares to secure company debt.
- Dispute over default: The Company is publicly contesting the accuracy of 'event of default' recitals in legal agreements, indicating potential litigation or friction with creditors.
- Collateral maintenance risk: Requirement for additional shares if stock value declines or dilution occurs could lead to forced selling or further dilution.
📋 Key Facts
- Entered into Pledge Agreements on July 2, 2025, with Joseph Pitman (former director/officer) and Paul Turin (current COO).
- The agreements secure $900,000 in aggregate principal amount of outstanding promissory notes.
- Collateral involves 1,000,000 shares pledged by each Pledgor to maintain a 400% collateral coverage ratio based on a $4.00/share valuation.
- The agreements contain recitals claiming the Company failed to make interest payments, which the Company explicitly disputes.
- Company claims it made the June 30, 2025, interest payment on July 3, 2025, within the required 15-day window.
Helio Corporation announced the immediate resignation of Joseph Pitman from his roles as Chief Technology Officer and Board Director on July 25, 2025. Concurrently, the company appointed Stuart D. Bale, a highly experienced solar and space scientist with NASA background, to the Board.
🚩 Red Flags
- Immediate resignation of the Chief Technology Officer (CTO) without a stated reason can sometimes signal internal friction or technical hurdles, though the company explicitly denies disagreement.
- Loss of key technical leadership in a specialized sector (space/solar).
📋 Key Facts
- Joseph Pitman resigned as CTO and Board Director effective July 25, 2025.
- Pitman provided no reason for his resignation; company states no known disagreements regarding operations or policies.
- Stuart D. Bale appointed to the Board on July 30, 2025.
- Bale is a former NASA Principal Investigator with experience in Parker Solar Probe and CLPS programs.
- Mr. Bale is not receiving compensation for his director service at this time.