SCHEDULE 13D: I-ON Digital Corp. CEO Carlos Montoya Discloses Over 59% Beneficial Ownership

Carlos X. Montoya, CEO and Chairman of I-ON Digital Corp., along with his controlled entities, has disclosed beneficial ownership of 59.30% of the company's common stock, primarily through convertible preferred shares.

Summary

• Carlos X. Montoya, CEO and Chairman of I-ON Digital Corp., along with I-ON Digital Acquisition Corp. (IAC) and Orebits Acquisition Group LLC (OAG), collectively beneficially own 59,319,000 shares of I-ON Digital Corp. common stock.
• This aggregate ownership represents 59.30% of the company's common stock, calculated assuming full conversion of all outstanding Series A and Series C Convertible Preferred Stock.
• Mr. Montoya directly holds 3,755 shares of Series A Convertible Preferred Stock, convertible into 37,550,000 common shares, over which he has sole voting and dispositive power.
• He also controls IAC, which owns 982 shares of Series A Convertible Preferred Stock, convertible into 9,820,000 common shares.
• Furthermore, he controls OAG, which owns 597,483 shares of Series C Convertible Preferred Stock, convertible into 11,949,660 common shares.
• The percentage of ownership is based on 31,106,234 shares of Common Stock outstanding as reported in the Issuer's Annual Report on Form 10-K filed on April 10, 2025.
• The shares are held for investment purposes, with potential for future acquisitions or sales based on market conditions and company performance.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to strong insider ownership, which can signal confidence and alignment of interests. However, the high concentration of control could also be viewed with caution by some investors due to potential governance implications.

Positives

• Significant insider ownership (59.30%) by the CEO and Chairman, Carlos X. Montoya, and his controlled entities, which can align management and shareholder interests.
• The acquisition of Orebits Corp. by I-ON Digital Corp. from Orebits Acquisition Group LLC (controlled by Mr. Montoya) indicates strategic consolidation or expansion within the group.

Negatives

• The high concentration of ownership (59.30%) by a single individual and his controlled entities could raise corporate governance concerns regarding minority shareholder influence and potential for conflicts of interest.

Risks

• Potential for conflicts of interest given Mr. Montoya's control over both the Issuer and the entities involved in the Orebits Corp. acquisition.
• The significant concentration of voting power in one individual could limit the influence of other shareholders on corporate decisions.

Future Outlook

The reporting persons hold the common stock for investment purposes and may acquire or sell additional shares in the future based on factors such as stock price levels, general market and economic conditions, ongoing evaluation of the Issuer's business, financial condition, operations, prospects, alternative investment opportunities, and liquidity needs.

Management Comments

• "Mr. Montoya is the CEO and Chairman of the Board of the Issuer."
• "Mr. Montoya is the sole shareholder in both IAC and OAG."
• "The Reporting Persons hold the Common Stock of the Issuer for investment purposes."

Industry Context

This filing primarily concerns a change in beneficial ownership and control structure, rather than operational or financial performance. It highlights a significant consolidation of control by the CEO and Chairman, which is a common occurrence in smaller or founder-led public companies, but the specific implications depend on the company's industry and strategic direction, which are not detailed here.

Legal Proceedings

• None of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years.
• None of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction that resulted in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws during the last five years.

Related Party Transactions

• On October 30, 2023, I-ON Digital Corp. acquired all outstanding shares of common stock of Orebits Corp. from Orebits Acquisition Group LLC (OAG) in exchange for shares of the Company's Series C Convertible Preferred Stock. Carlos X. Montoya is the sole member of OAG and the CEO and Chairman of the Board of I-ON Digital Corp., indicating a related party transaction.

Stakeholder Impact

• Shareholders: The significant concentration of ownership by Mr. Montoya and his controlled entities means that minority shareholders will have limited influence over corporate decisions. This could be seen as positive by some who value strong, consistent leadership, or negative by others who prefer broader shareholder democracy.
• Management/Employees: Strong insider control may lead to stable long-term strategic direction, potentially benefiting employees through consistent company vision.

Next Steps

• Reporting Persons may, from time to time, acquire additional shares of Common Stock.
• Reporting Persons may retain and/or sell all or a portion of the shares of Common Stock held.
• Reporting Persons may distribute the Common Stock held to other entities.
• Any future acquisitions will be subject to the Issuer's policies, including its insider trading policy.

Key Dates

Recommendation

Keywords

I-ON Digital Corp., Carlos X. Montoya, Schedule 13D, Beneficial Ownership, Convertible Preferred Stock, Insider Ownership, Corporate Control, SEC Filing, Orebits Acquisition Group LLC, I-ON Digital Acquisition Corp., Common Stock