HNO International (HNOI) sells $150K 8% convertible note with share reserve
Rhea-AI Filing Summary
HNO International, Inc. entered into a Securities Purchase Agreement with CFI Capital LLC and issued a $150,000 convertible redeemable promissory note carrying a $12,000 original issue discount for a purchase price of $138,000. After a $5,000 legal fee deduction, the Company expects net proceeds of about $133,000.
The note matures on March 12, 2027 and bears 8% annual interest. Starting six months after issuance, principal and interest may be converted into common stock at 60% of the lowest trading price over the prior 20 trading days, with deeper discounts if a DTC chill occurs or upon an event of default. Conversions are limited by a 4.99% beneficial ownership cap, which can increase to 9.9% with 61 days’ notice.
The Company agreed to irrevocably reserve 7,861,635 common shares for potential conversions and to maintain a reservation equal to five times the amount needed for full conversion. The note also includes a most-favored-nation provision, allowing the holder to adopt more favorable terms granted in future financings.
Positive
- None.
Negative
- None.
Insights
Small convertible note adds cash but introduces discounted equity overhang.
HNO International issued a $150,000 convertible redeemable note with 8% interest, receiving roughly $133,000 in net cash. For a smaller issuer, this is a modest but meaningful capital infusion structured as debt that can later turn into equity.
The conversion formula uses 60% of the lowest trading price over 20 days, with deeper discounts if there is a DTC chill or an event of default. That, combined with a requirement to reserve 7,861,635 shares and maintain a five-times buffer, points to potential dilution if the lender converts aggressively.
The most-favored-nation clause means any future financing on better terms could improve this holder’s position as well. Actual impact on the share count and trading will depend on future stock prices, conversion timing after the six-month mark, and whether default-related discounts are ever triggered.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Item 1.01 Entry into a Material Definitive Agreement
On March 12, 2026, HNO International, Inc. (the "Company"), entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with CFI Capital LLC (the "Buyer"), pursuant to which the Company issued to the Buyer a Convertible Redeemable Promissory Note (the "Note") in the aggregate principal amount of $150,000, with a $12,000 original issue discount, resulting in a purchase price of $138,000. The Buyer may deduct $5,000 for legal fees from the proceeds at funding, resulting in net proceeds to the Company of approximately $133,000.
The Note has a maturity date of March 12, 2027 and bears interest at the rate of 8% per annum from the Issue Date. Beginning on the six-month anniversary of the Issue Date, the outstanding principal and accrued interest on the Note may be converted into shares of the Company's common stock at a conversion price equal to 60% of the lowest trading price of the Company's common stock for the 20 trading days prior to conversion (subject to certain adjustments, including a conversion price equal to 50% of such price if a DTC "Chill" is in effect and 45% upon an Event of Default). Conversions are limited by a 4.99% beneficial ownership cap (increasable to 9.9% upon 61 days' prior notice). The Company has agreed to irrevocably reserve 7,861,635 shares of common stock for conversions under the Note and to maintain a share reservation equal to five times the amount necessary for full conversion.
The Note contains a most-favored-nation provision that permits the Holder to elect more favorable terms if the Company issues securities with better conversion discounts, lookback periods, interest rates, original issue discounts, or prepayment rates to other investors.
The foregoing description of the Securities Purchase Agreement and the Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Securities Purchase Agreement and the Note, copies of which are filed as Exhibit 4.1 and Exhibit 99.1, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 3.02.
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Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Document | |
| 4.1 | Convertible Redeemable Note, dated March 12, 2026, by and between HNO International, Inc. and CFI Capital LLC | |
| 99.1 | Securities Purchase Agreement, dated March 12, 2026, by and between HNO International, Inc. and CFI Capital LLC | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HNO International, Inc. (Registrant)
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| Date: March 17, 2026 | By:
/s/ Donald Owens Chief Executive Officer
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FAQ
What financing did HNO International (HNOI) announce in this 8-K?
What are the key terms of HNO International’s new convertible note?
How is the conversion price for HNO International’s note determined?
Are there ownership limits on conversions under HNO International’s note?
How many shares has HNO International reserved for potential note conversions?
What is the most-favored-nation clause in HNO International’s note?
Filing Exhibits & Attachments
5 documents