Convertible notes and warrants reshape capital at HNO International (HNOI)
Rhea-AI Filing Summary
HNO International, Inc. entered two financing agreements with Jefferson Street Capital and Lambda Ventures, each involving a $96,250 Convertible Promissory Note and a warrant for up to 385,000 common shares in return for gross proceeds of $87,500 per investor.
Each note includes an 8% one-time interest charge, a one-year maturity, and a conversion price set at 60% of the lowest traded price over the prior 20 trading days, subject to a 4.99% beneficial ownership cap. The company also issued warrants at a $0.25 exercise price and reserved 13,000,000 shares of common stock with its transfer agent for each transaction.
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Insights
HNO International adds short-term, discount-convertible debt with attached warrants and share reserves.
HNO International issued two $96,250 Convertible Promissory Notes with one-year maturities and an 8% one-time interest charge, alongside warrants for 385,000 shares to each buyer. Conversion at 60% of the lowest traded price makes these variable-price instruments.
Both notes and warrants carry a 4.99% beneficial ownership limitation, while default terms include up to 150% repayment and 18% default interest. The company reserved 13,000,000 shares per transaction, and one agreement restricts additional variable rate financings and certain new issuances for defined periods.
Actual impact will depend on future share prices, conversion activity, and whether any default triggers occur. Subsequent company filings can provide updates on conversions, warrant exercises, and outstanding principal as the 2027 maturities approach.
8-K Event Classification
Key Figures
Key Terms
Convertible Promissory Note financial
original issue discount financial
beneficial ownership limitation financial
Variable Rate Transaction financial
cashless basis financial
Rule 506(b) of Regulation D regulatory
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
On April 7, 2026 and April 9, 2026, respectively, HNO International, Inc. (the "Company") entered into separate financing transactions pursuant to which the Company issued Convertible Promissory Notes and Common Stock Purchase Warrants to two accredited investors. The material terms of each transaction are described below.
Jefferson Street Capital, LLC Transaction
On April 7, 2026, the Company entered into a Securities Purchase Agreement (the "JSC Purchase Agreement") with Jefferson Street Capital, LLC, a New Jersey limited liability company (the "JSC Buyer"), pursuant to which the Company issued to the JSC Buyer a Convertible Promissory Note in the principal amount of $96,250 (the "JSC Note") and a Common Stock Purchase Warrant to purchase up to 385,000 shares of the Company's common stock (the "JSC Warrant"), in exchange for gross proceeds of $87,500. The JSC Buyer withheld $3,000 from the proceeds at funding to cover the JSC Buyer's legal fees in connection with the transactions contemplated by the JSC Purchase Agreement, and withheld an additional $2,250 from the proceeds at funding to cover fees payable to Craft Capital Management LLC (CRD#: 171350), a registered broker-dealer acting as placement agent in connection with the transactions contemplated by the JSC Purchase Agreement, resulting in net proceeds to the Company of approximately $82,250.
Convertible Promissory Note
The JSC Note has a principal amount of $96,250, which includes an original issue discount of $8,750. The JSC Note bears a one-time interest charge of 8% on the principal amount (equal to $7,700), which is guaranteed and earned in full as of the issue date. The JSC Note matures on April 7, 2027, twelve (12) months from the issue date.
The JSC Note is convertible, at the option of the JSC Buyer, at any time on or following the issue date, into shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), at a conversion price equal to 60% of the lowest traded price of the Common Stock on the principal trading market during the twenty (20) trading days prior to the applicable conversion date, subject to adjustment as set forth in the JSC Note. The JSC Buyer is entitled to deduct $1,750 from the conversion amount in each notice of conversion to cover the JSC Buyer's conversion-related fees. The JSC Buyer's right to convert the JSC Note is subject to a 4.99% beneficial ownership limitation.
Upon an event of default, the JSC Note shall become immediately due and payable at an amount equal to 150% of outstanding principal and accrued interest through the date of repayment, plus costs of collection, all without demand or notice. Default interest shall accrue at the lesser of 18% per annum or the maximum rate permitted by law. The JSC Buyer retains the right to convert all or any portion of the JSC Note, including any default amount, into shares of Common Stock at any time, including after the maturity date. Events of default include, among others, failure to pay principal or interest when due, failure to timely deliver shares of Common Stock upon conversion, breach of representations, warranties, or covenants under the JSC Purchase Agreement, the Company's failure to maintain the required share reserve, cross-default with other Company indebtedness after expiration of applicable cure periods, consummation of a Variable Rate Transaction, failure to maintain a minimum market capitalization of $3,000,000 on any Trading Day, and failure to comply with the reporting requirements of the Securities Exchange Act of 1934, as amended.
Common Stock Purchase Warrant
In connection with the JSC Purchase Agreement, the Company issued to the JSC Buyer a Common Stock Purchase Warrant to purchase up to 385,000 shares of Common Stock at an exercise price of $0.25 per share. The JSC Warrant is exercisable at any time commencing on April 7, 2026 and expires on April 7, 2031, five (5) years from the issuance date. The JSC Warrant may be exercised on a cashless basis when the market price of one share of Common Stock exceeds the exercise price and no effective registration statement covers the JSC Buyer's resale of all Warrant Shares at prevailing market prices. The JSC Buyer's right to exercise the JSC Warrant is subject to a 4.99% beneficial ownership limitation.
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Share Reservation
In connection with the foregoing, the Company entered into an Irrevocable Transfer Agent Instruction Letter and Memorandum of Understanding with Pacific Stock Transfer Company, the Company's transfer agent (collectively, the "Transfer Agent Instructions"), pursuant to which the Company has irrevocably reserved 13,000,000 shares of Common Stock for issuance upon conversion of the JSC Note and exercise of the JSC Warrant. The JSC Note requires a minimum reserve of the greater of 11,000,000 shares or four times the number of shares issuable upon full conversion at the then-applicable conversion price. The JSC Buyer has the right to increase the share reservation at any time without the Company's consent.
The securities described herein were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. The JSC Buyer represented that it is an "accredited investor" as defined in Rule 501(a) of Regulation D.
The JSC Purchase Agreement prohibits the Company from entering into any Variable Rate Transaction while the JSC Note remains outstanding, restricts the Company from issuing any shares of Common Stock or Common Stock Equivalents for 30 calendar days following the date of the JSC Purchase Agreement, and grants the JSC Buyer participation rights in any future Company offering of debt or equity securities for 18 months from the date of closing or until the JSC Note is repaid in full, whichever is earlier.
The foregoing description of the JSC Note, the JSC Purchase Agreement and the JSC Warrant does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 4.1, 99.1, and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Lambda Ventures, LLC Transaction
On April 9, 2026, the Company entered into a Securities Purchase Agreement (the "LV Purchase Agreement") with Lambda Ventures, LLC, a Nevada limited liability company (the "LV Buyer"), pursuant to which the Company issued to the LV Buyer a Convertible Promissory Note in the principal amount of $96,250 (the "LV Note") and a Common Stock Purchase Warrant to purchase up to 385,000 shares of the Company's common stock (the "LV Warrant"), in exchange for gross proceeds of $87,500. The Buyer withheld $3,000 from the proceeds at funding to cover the LV Buyer's legal fees in connection with the transactions contemplated by the LV Purchase Agreement, and withheld an additional $2,250 from the proceeds at funding to cover fees payable to Craft Capital Management LLC (CRD#: 171350), a registered broker-dealer acting as placement agent in connection with the transactions contemplated by the LV Purchase Agreement, resulting in net proceeds to the Company of approximately $82,250.
Convertible Promissory Note
The LV Note has a principal amount of $96,250, which includes an original issue discount of $8,750. The LV Note bears a one-time interest charge of 8% on the principal amount (equal to $7,700), which is guaranteed and earned in full as of the issue date. The LV Note matures on April 9, 2027, twelve (12) months from the issue date.
The LV Note is convertible, at the option of the LV Buyer, at any time on or following the issue date, into shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), at a conversion price equal to 60% of the lowest traded price of the Common Stock on the principal trading market during the twenty (20) trading days prior to the applicable conversion date, subject to adjustment as set forth in the LV Note. The LV Buyer is entitled to deduct $1,750 from the conversion amount in each notice of conversion to cover the LV Buyer's conversion-related fees. The LV Buyer's right to convert the LV Note is subject to a 4.99% beneficial ownership limitation.
Upon an event of default, all outstanding principal and accrued interest under the LV Note shall become immediately due and payable, and default interest shall accrue at the lesser of 18% per annum or the maximum rate permitted by law. Events of default include, among others, failure to pay principal or interest when due, failure to timely deliver shares of Common Stock upon conversion, breach of representations, warranties, or covenants under the LV Purchase Agreement, and the Company's failure to maintain the required share reserve.
Common Stock Purchase Warrant
In connection with the LV Purchase Agreement, the Company issued to the LV Buyer a Common Stock Purchase Warrant to purchase up to 385,000 shares of Common Stock at an exercise price of $0.25 per share. The LV Warrant is exercisable at any time commencing on April 9, 2026 and expires on April 9, 2031, five (5) years from the issuance date. The LV Warrant may be exercised on a cashless basis under certain conditions described therein. The LV Buyer's right to exercise the LV Warrant is subject to a 4.99% beneficial ownership limitation.
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Share Reservation
In connection with the foregoing, the Company entered into an Irrevocable Transfer Agent Instruction Letter with Pacific Stock Transfer Company, the Company's transfer agent, pursuant to which the Company has irrevocably reserved 13,000,000 shares of Common Stock for issuance upon conversion of the LV Note and exercise of the LV Warrant.
The securities described herein were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder. The LV Buyer represented that it is an "accredited investor" as defined in Rule 501(a) of Regulation D.
The foregoing description of the LV Note, the LV Purchase Agreement and the LV Warrant does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 4.2, 99.3, and 99.4, 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.
Item 9.01 Financial Statements and Exhibits
| Exhibit No. | Document | |
| 4.1 | Promissory Note, dated April 7, 2026, by and between HNO International, Inc. and Jefferson Street Capital, LLC | |
| 99.1 | Securities Purchase Agreement, dated April 7, 2026, by and between HNO International, Inc. and Jefferson Street Capital, LLC | |
| 99.2 | Common Stock Purchase Warrant, dated April 7, 2026, by and between HNO International, Inc. and Jefferson Street Capital, LLC | |
| 4.2 | Promissory Note, dated April 9, 2026, by and between HNO International, Inc. and Lambda Ventures, LLC | |
| 99.3 | Securities Purchase Agreement, dated April 9, 2026, by and between HNO International, Inc. and Lambda Ventures, LLC | |
| 99.4 | Common Stock Purchase Warrant, dated April 9, 2026, by and between HNO International, Inc. and Lambda Ventures, LLC | |
| 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.
HNO International, Inc. (Registrant)
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| Date: April 17, 2026 | By:
/s/ Donald Owens Chief Executive Officer
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