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Trio Petroleum Corp. (NYSE American:TPET), an oil and gas exploration and production company with a market capitalization of $8.49 million, has entered into a material definitive agreement with an institutional investor for a convertible note financing arrangement. According to InvestingPro data, while the company currently holds more cash than debt on its balance sheet, it has been rapidly burning through its cash reserves. On April 11, 2025, the company issued an Unsecured Convertible Promissory Note with a principal amount of $321,176, which includes an original issue discount of 15%. The initial funding amount was $273,000, resulting in net proceeds of $247,985 after commissions and legal fee reimbursements.
On April 17, 2025, Trio Petroleum amended and restated the note, increasing the funding amount to $606,000 and the principal amount to $712,941. The note carries a maturity date of October 10, 2025, and allows the company to prepay it at any time, with no penalty if prepaid on or before July 10, 2025. The company maintains a conservative debt profile with a debt-to-equity ratio of just 0.03 and a current ratio of 1.37, indicating adequate liquidity to meet short-term obligations.
The investor has the option to convert the note into Trio Petroleum’s common stock. The conversion price is set at 75% of the lowest closing bid price of the common stock on the NYSE American for the 10 trading days preceding the conversion notice, subject to a minimum floor price of $0.48. The maximum number of shares that could be issued upon conversion is 1,485,293 shares of common stock.
In the event of default, and if the default remains uncured for at least 10 days, the balance of the note may become immediately due and payable, and default interest may accrue at a rate of 20% per annum. Additionally, the company has granted "piggyback" registration rights to the investor, allowing for the inclusion of the conversion shares in a future registration statement.
This financing transaction was conducted as a private placement, exempt from registration under Section 4(a)(2) of the Securities Act of 1933. The securities issued have not been registered under the Securities Act or any state securities laws and are subject to restrictions on transfer.
The information provided in this article is based on a press release statement from Trio Petroleum Corp. and is intended to present the key facts of the agreement without offering opinions or recommendations. For a comprehensive analysis of Trio Petroleum’s financial health, including 12 additional ProTips and extensive financial metrics, visit InvestingPro.
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