Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 1558

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 7
Chunk 1558
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- 
  
    Total
    Notes payable 
    $877,852  
    $1,217,597 

Convertible
note, net of discounts (October 2023 SPA)

On
October 4, 2023, the Company entered into a securities purchase agreement (the “October 2023 SPA”) with an investor; the
October 2023 SPA provides for loans in an aggregate principal amount of up to $3.5 million under two tranches, with first and second
tranche fund amounts of $2.0 million and $1.5 million, respectively.

In
consideration for the investor’s funding of the first tranche, the Company issued i) a senior secured convertible promissory note
in the aggregate principal amount of $2,000,000 (the “Note”) and ii) a warrant to purchase up to 43,336 shares of Common
Stock at an initial exercise price of $24.00 per share of Common Stock, subject to certain adjustments (the “Common Warrant”).
The Note was initially convertible into shares of Common Stock at conversion price of $24.00, subject to certain adjustments (the “Conversion
Price”), provided that the Conversion Price shall not be reduced below $7.00 (the “Floor Price”). The Note did not
bear any interest and matured on April 4, 2025.

Upon
the initial funding on October 4, 2023, the Company recorded gross proceeds of approximately $2.0 million, a 7% original issue discount
of $140,000 and debt issuance costs of $350,320, for net proceeds of approximately $1.5 million. The Company also issued a warrant to
purchase up to 43,336 shares of common stock with an aggregate relative fair value of $332,630; the factors used to determine fair value
were a share price of $11.00, an exercise price of $24.00, an expected term of 5 years, annualized volatility of 137.10%, a dividend
rate of zero percent and a discount rate of 4.72%.

On
December 18, 2023, December 29, 2023 and January 12, 2024, the Company made principal payments towards the first tranche in the amounts
of $125,000, $125,000, and $125,000, respectively, which it converted into shares at 103% for conversion amounts of $128