Company: TPET
Filing Date: 2025-01-17
Form Type: 10-K
Source: 0001493152-25-002760
Chunk: 2373

Company: Trio Petroleum Corp.
Filing Date: 2025-01-17
Form: 10-K
Item: Item 10
Chunk 2373
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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 $128,750, $128,750
and $128,750, respectively. Conversion shares were issued numbering 18,393, 18,393 and 18,393, respectively, at fair values per share
of $6.80, $6.20 and $5.80, respectively, for total amounts of $125,072, $114,036 and $105,575, with cash payments of $36,698, $35,837
and $49,935 made to the investor for the difference between the monthly conversion price and the floor price listed in the most recent
amendment to the agreement. Additionally, losses in the amounts of $36,770, $24,873 and $30,510, respectively, were recognized for the
difference between the value of the shares issued and the principal payment amounts.

On
December 29, 2023, the Company entered into an amendment to the Second Tranche Note of the October 2023 SPA, which reduced the conversion
price of note and exercise price of warrant from $24.00 to $10.00; the Company accounted for the amendment as a warrant modification,
whereby the effect of the modification is measured as the difference in its relative fair value immediately before the modification and
after