HNO International Reveals a Second Toxic Convertible Note with Lambda Ventures, Doubling the Dilution Threat
HNOI has more than doubled off its 52-week low of $0.034 on light trading volume (0.1× avg).
Summary
HNO International's amended 8-K discloses a second, previously hidden convertible note deal with Lambda Ventures, doubling the toxic financing to $135,000 principal and 770,000 warrants. The deeply discounted conversion terms and massive share reserves intensify dilution risk for a company already fighting for survival.
Key Events · Financing and Capital Events · HNOI
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Second Toxic Note Deal Disclosed
The amendment reveals a previously omitted convertible note and warrant transaction with Lambda Ventures, LLC, identical to the Monroe Street Capital deal: $67,500 principal, $62,500 gross proceeds, $57,625 net, and 385,000 warrants at $0.25 exercise price.
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Total Financing Doubles
Combined with the Monroe Street deal, total toxic financing now stands at $135,000 principal, $125,000 gross proceeds, $115,250 net, and 770,000 warrants — doubling the dilution risk.
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Deeply Discounted Conversion Terms
Both notes convert at 60% of the lowest traded price over the prior 20 trading days, a 40% discount to market. At the current $0.076 stock price, the conversion price could be as low as $0.0456, implying massive potential share issuance.
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Massive Share Reserve Requirements
Each note requires a 20-million-share reserve, totaling 40 million shares — nearly 40% of the 101.8 million shares outstanding as of April 2026. The reserves can be increased unilaterally by the holders.
Analysis · HNOI · Energy & Transportation
This amendment uncovers a second convertible note and warrant deal with Lambda Ventures that had been previously omitted—mirroring the Monroe Street Capital transaction disclosed in May. Together, the two arrangements double the toxic financing to $135,000 in principal, $125,000 in gross proceeds, and 770,000 warrants at $0.25. The notes convert at a 40% discount to the lowest market price, and each requires a 20-million-share reserve—a massive overhang for a company with a $7.8 million market cap and a stock trading at $0.076. With the company already in severe financial distress and facing going-concern doubts, this hidden financing deepens the dilution risk and underscores the desperate capital-raising environment.
At the time of this filing, HNOI was trading at $0.08 on OTC in the Energy & Transportation sector, with a market capitalization of approximately $7.8M. The 52-week trading range was $0.03 to $0.68. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.