HNO International, Inc. 8-K

What Happened

• HNO International, Inc. announced it entered into two separate financing transactions in April 2026 with Jefferson Street Capital, LLC (April 7) and Lambda Ventures, LLC (April 9). In each transaction the company issued a Convertible Promissory Note with a principal amount of $96,250 (which includes an $8,750 original issue discount) and a Common Stock Purchase Warrant to buy up to 385,000 shares, in exchange for gross proceeds of $87,500 per transaction (net proceeds ≈ $82,250 each after legal and placement fees).

Key Details

• Notes: Each note matures 12 months from issuance (April 7 or April 9, 2027) and carries a one-time 8% interest charge ($7,700) earned at issuance.
• Conversion: Each note is convertible at the investor’s option into common stock at a conversion price equal to 60% of the lowest traded price during the 20 trading days prior to conversion; conversions are subject to a 4.99% beneficial ownership cap and a $1,750 deduction per conversion notice for investor fees.
• Warrants: Each investor received a warrant for 385,000 shares, exercisable immediately, expiring five years later (Apr 2031), with a $0.25 exercise price and a cashless exercise feature in certain circumstances; warrant exercises are also subject to a 4.99% cap.
• Share reserve & registration: The company placed irrevocable transfer agent instructions reserving 13,000,000 shares for each transaction’s conversions/exercises. Securities were issued under Section 4(a)(2) and Rule 506(b) to accredited investors.
• Default provisions & restrictions: The Jefferson Street note includes accelerated repayment equal to 150% of outstanding principal and accrued interest on default (plus collection costs); both notes impose default interest up to 18% (or max legal rate) and list multiple default events. The JSC agreement also restricts Variable Rate Transactions, limits share issuances for 30 days, and grants 18 months of participation rights in future offerings.

Why It Matters

• Short-term funding: The transactions provide HNOI with immediate cash (net ≈ $164,500 combined) to fund operations, but the obligations mature in one year, creating near-term repayment or conversion pressure.
• Potential dilution: If converted and warrants exercised, these instruments could issue substantial new shares. The conversion mechanics (60% of a recent low price) could result in conversion at a steep discount to market, increasing dilution risk, though each investor is limited to acquiring no more than 4.99% beneficial ownership in any single conversion/exercise.
• Investor protections and covenants: The agreements include investor protections (reserve shares, default remedies, participation rights) that could restrict HNOI’s financing flexibility while the notes remain outstanding.

(For full terms, conversion mechanics, and the complete agreements see the exhibits filed with the 8‑K.)