This is a toxic convertible financing that will likely crush the stock price as the holder converts at deep discounts and sells into the market. Expect persistent downward pressure. Avoid long positions and consider that the 49.3M share reservation signals the company anticipates heavy conversion. Monitor for conversion notices and share price declines.
Price Chart
Executive Summary
HNO International issued a $210,000 convertible redeemable note to CFI Capital LLC at a $21,000 original issue discount, netting $189,000. The note carries a 6% interest rate, matures in one year, and is convertible into common stock at a deeply discounted price (60% of the lowest trading price over the prior 20 days, with further discounts to 50% or 45% in certain events). The company reserved 49,295,775 shares for conversion, indicating massive potential dilution. This is a distressed financing at predatory terms, highly bearish for existing shareholders.
Key Financial Metrics
Key Facts
- Issued a $210,000 convertible note to CFI Capital LLC with a $21,000 OID, netting $189,000.
- Conversion price is 60% of the lowest VWAP over the prior 20 trading days (50% if DTC chill, 45% on default).
- Company reserved 49,295,775 shares for conversion — a massive potential dilution relative to current float.
- Note matures September 4, 2027, with 6% annual interest.
- Contains a most-favored-nation clause allowing the holder to demand better terms if issued to others.
- Beneficial ownership cap of 4.99% (increasable to 9.9% on 60 days' notice).
Financial Impact
Potential dilution of up to 49.3M shares from a $189K net raise — extremely dilutive at current market prices.
Risk Factors
- Massive dilution from discounted convertible note conversions.
- Predatory terms (60% of lowest VWAP) incentivize holder to drive price down before converting.
- Most-favored-nation clause could trigger even worse terms if company seeks additional financing.
- Company appears to be in financial distress, raising only $189K via this structure.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001342916-26-000054 |
| Document: 0001342916-26-000054-index-headers.html | 0001342916-26-000054 |
| Document: 0001342916-26-000054-index.html | 0001342916-26-000054 |
| Document: 0001342916-26-000054.txt | 0001342916-26-000054 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 5, 2026 22d ago | EFFECT | $0.0365 | awaiting T+60 | — | $0.0250 (+31.51%) |
Sep 11, 2026 6w ago | 8-K | $0.0196 | awaiting T+60 | — | $0.0250 (−27.55%) |
Jul 27, 2026 13w ago | EFFECT | $0.1100 $0.0428 | ▲ +61.05% | ▲ +65.53% | $0.0250 (+77.27%) |
May 8, 2026 24w ago | 8-K | $0.1090 $0.0977 | ▲ +10.34% | ▲ +15.18% | $0.0250 (+77.06%) |
May 1, 2026 25w ago | 8-K | $0.0900 $0.1140 | ▼ −26.67% | ▼ −24.81% | $0.0250 (+72.22%) |
Apr 17, 2026 27w ago | 8-K | $0.0900 $0.1152 | ▼ −27.99% | ▼ −21.85% | $0.0250 (+72.22%) |
Apr 16, 2026 27w ago | 8-K | $0.0900 $0.1183 | ▼ −31.44% | ▼ −24.40% | $0.0250 (+72.22%) |
US Market Status
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