UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
Trio Petroleum Corp., a Delaware corporation (the “Company”) executed a Securities Purchase Agreement, dated August 1, 2024 (the “SPA”) with an institutional investor (the “Investor”), pursuant to which the Company raised gross proceeds of $134,000 and received net proceeds of $110,625, after payment of offering expenses (the “Financing”). The SPA contains certain representations and warranties by the Investor and the Company and customary closing conditions.
In connection with the Financing, the Company issued an unsecured promissory note to the Investor in the principal amount of $152,000, having an original issue discount of $18,000 or approximately 11.8% (the “Investor Note”). Interest accrues on the Investor Note at a rate of 12% per annum and the maturity date of the Investor Note is May 30, 2025 (the “Investor Note Maturity Date”). The Investor Note provides for five payments of principal and accrued interest which are payable: (i) $85,120 on January 30, 2025; (ii) $21,280 on February 28, 2025; (iii) $21,280 on March 30, 2025; (iv) $21,280 on April 30, 2025; and (v) $21,280 on May 30, 2025. Subject to certain restrictions, the Company may prepay the Investor Note, in full and not in part, any time during the 180 day period after the issuance date of the Investor Note at a 3% discount to the outstanding amount of principal and interest due and payable; provided, that in the event of a prepayment, the Company will still be required to pay the full amount of interest that would have been payable through the term of the Investor Note, in the amount of $18,240. The Investor Note contains provisions constituting an Event of Default (as such term is defined in the Investor Note) and, upon an Event of Default, the Investor Note will be accelerated and become due and payable in an amount equal to 150% of all amounts due and payable under the Investor Note with interest at a default rate of 22% per annum. In addition, upon an Event of Default, the Investor has the right to convert all or any outstanding amount of the Investor Note into shares of the Company’s common stock at a conversion price equal to the greater of (i) 75% of the Market Price (as such term is defined in the Investor Note) or (ii) the conversion floor price, which is $0.18. Issuance of shares of common stock to the Investor is subject to certain beneficial ownership limitations and not more than 19.99% of the shares of common stock outstanding on August 1, 2024 may be issued upon conversion of the Investor Note. The conversion price is also subject to certain adjustments or other terms in the event of (i) mergers, consolidations or recapitalization events or (ii) certain distributions made to holders of shares of common stock.
Additionally, two prior investors (the “Prior Investors”), who had a right to participate in the Financing, waived their rights to participate, in consideration for (i) the right to pay amounts owed by the Company to the Investor, if not paid by the Company, when due, in order to avoid an Event of Default (as such term is defined in the Note); (ii) a restriction, for as long as the Company owes amounts on outstanding promissory notes issued to the Prior Investors, on the Company’s making any payments under the Investor Note, other than scheduled payments of principal and interest, including a prohibition against making any prepayments, without the consent of such prior investors; and (iii) the right to convert certain promissory notes held by the Prior Investors, if the Investor exercises its right to convert the Note, upon an Event of Default.
Spartan Capital Securities LLC, as the placement agent, received a cash payment of $9,375, in connection with its services relating to the Financing.
The above descriptions of the Investor Note and the SPA are qualified in their entirety by the text of the Investor Note and the SPA, copies of which are attached as Exhibit 4.1 and 10.1, respectively, to this Current Report on Form 8-K.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained above under Item 1.01, to the extent applicable, is hereby incorporated by reference herein. Based in part upon the representations of the Investor in the SPA, the placement and sale of the Investor Note was made in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act and corresponding provisions of state securities or “blue sky” laws.
None of the securities have been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Commission or an applicable exemption from the registration requirements. Neither this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy shares of common stock or other securities of the Company.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report:
| Exhibit No. | Description | |
| 4.1 | Trio Petroleum Corp. Promissory Note dated August 1, 2024. | |
| 10.1 | Securities Purchase Agreement dated August 1, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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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.
Dated: August 5, 2024
| TRIO PETROLEUM CORP. | ||
| By: | /s/ Robin Ross | |
| Name: | Robin Ross | |
| Title: | Chief Executive Officer | |
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