Data I/O Corporation (NASDAQ: DAIO) entered into a securities purchase agreement with two institutional investors for $9 million in gross proceeds before fees and expenses, according to a company statement.

The Redmond, Washington-based provider of data provisioning solutions will issue 869,840 shares of common stock, convertible debentures totaling approximately $6.8 million in principal amount, and warrants to purchase up to 1,080,000 shares of common stock.

The warrants carry an exercise price of $3.00 per share and remain exercisable for five years from the issuance date. The unsecured convertible debentures bear 4.0% annual interest, payable in cash or Series B preferred stock at the company's discretion, and mature five years from issuance unless repaid or converted earlier.

The debentures will convert into Series B preferred stock, which is non-voting and convertible into common stock at an initial conversion price of $2.50 per share. Automatic conversion of the debentures into Series B preferred stock will occur upon stockholder approval at an upcoming shareholders meeting, as required by Nasdaq rules.

The transaction is expected to close before the end of May 2026, subject to regulatory approvals and customary closing conditions. Data I/O plans to use the net proceeds for working capital, general corporate purposes, and potential strategic acquisitions.

The securities in the private placement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption. The company agreed to file a registration statement with the Securities and Exchange Commission for the resale of the shares and securities issuable upon warrant exercise and preferred stock conversion.