Trio Petroleum Corp Debt Disclosure

NOTE 9 – NOTES PAYABLE

 

Notes payable as of October 31, 2025 and 2024 consisted of the following:

 SCHEDULE OF NOTES PAYABLE

		As of				As of
		October 31, 2025				October 31, 2024
Convertible notes, net of discounts		$	467,179			$	-
Promissory notes, net of discounts			-				742,852
Payable – related party			-				115,666
Note payable – related party			-				135,000
Total notes payable		$	467,179			$	993,518

 

Payable – related party

 

See Note 6 - McCool Ranch Oil Field Asset Purchase – Related Party for further information.

 

March 2024 Debt Financing

 

On March 27, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) with an institutional investor (the “March 2024 Investor”), which was funded on April 5, 2024. Pursuant to the SPA, the Company raised gross proceeds of $184,500 and received net proceeds of $164,500, after payment of offering expenses (the “March 2024 Debt Financing”).

 

 

In connection with the March 2024 Debt Financing, the Company issued an unsecured promissory note to the March 2024 Investor in the principal amount of $211,500, reflecting an original issue discount of $27,000 (approximately 13%). The note accrued interest at 12% per annum and matured on January 30, 2025. The note provided for five scheduled payments of principal and accrued interest, which were due on September 30, 2024 ($118,440), October 30, 2024 ($29,610), November 30, 2024 ($29,610), December 30, 2024 ($29,610), and January 30, 2025 ($29,610).

 

The Company made cash payments of $118,440 on September 30, 2024, $29,610 on October 30, 2024, and $88,830 on November 30, 2024, which satisfied the full principal balance of the note.

 

For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $21,316 and $51,064, respectively, within interest expense in the consolidated statements of operations. Over the life of the note, the Company recognized a total of $72,380 in non-cash interest expense related to discounts. As of October 31, 2025, there was no remaining balance outstanding under the note.

 

Note Payable – Related Party

 

On March 26, 2024, the Company borrowed $125,000 from its former Chief Executive Officer, Michael L. Peterson, in connection with which the Company delivered to Mr. Peterson an Unsecured Subordinated Promissory Note in the principal amount of $125,000. The Note is payable on or before September 26, 2024 (the “Peterson Note Maturity Date”), upon which date the principal balance and interest accruable at a rate of 10% per annum is due and payable to Mr. Peterson by the Company. The Company may prepay the Peterson Note at any time prior to the Peterson Note Maturity Date, in whole or in part, without premium or penalty. The Company is also required to prepay the Peterson Note, in full, prior to the Peterson Note Maturity Date from the proceeds of any equity or debt financing received by the Company of at least $1,000,000. As additional consideration for the Peterson Loan, the Company accelerated the vesting of 50,000 shares of restricted stock awarded to Mr. Peterson under the Plan. The Peterson Note also provides for acceleration of payment of the outstanding principal balance and all accrued and unpaid interest in the case of an Event of Default (as such term is defined in the Peterson Note), where there is either a payment default or a bankruptcy event.

 

On September 26, 2024 and October 28, 2024, the Company entered into the first and second amendments, respectively, to the Peterson Note; each amendment extended the maturity dates to October 28, 2024 and November 30, 2024, respectively, and added a $5,000 extension fee (per amendment) to the principal of the note. On November 25, 2024, the Company paid off the Peterson Note in the amount of $143,516, with $135,000 in satisfaction of the principal amount owed and $8,516 towards accrued interest.

 

April 2024 Convertible Debt Financings

 

The April 2024 Convertible Debt Financings, which provided net proceeds of $664,000 and included the issuance of 75,000 commitment shares and $800,000 of senior secured convertible notes, were fully repaid and converted into common stock during fiscal 2024. As of October 31, 2025, no amounts remained outstanding and no expense was recognized in fiscal 2025.

 

 

June 2024 Convertible Debt Financings

 

On June 27, 2024, the Company entered into a Securities Purchase Agreement (the “June 2024 SPA”) with the April 2024 Investors (the “June 2024 Investors”). Pursuant to the June 2024 SPA, the Company received aggregate gross proceeds of $720,000 (net of a 10% original issue discount) and net proceeds of $676,200 after offering expenses (the “June 2024 Financing”). In connection with the financing, the Company issued to each investor a Senior Secured 10% Original Issue Discount Convertible Promissory Note in the principal amount of $400,000 (the “June 2024 Notes”) and warrants to purchase an aggregate of 74,461 shares of common stock at an initial exercise price of $7.905 per share (the “June 2024 Warrants”). The warrants were recorded as equity instruments with an aggregate relative fair value of $257,701.

 

The June 2024 Notes were initially convertible into shares of common stock at a conversion price of $7.905 per share, subject to adjustment, with a floor price of $2.40. The notes did not bear interest unless an Event of Default occurred, in which case interest accrued at 10% per annum. The notes matured on June 27, 2025 and required monthly installment payments commencing 90 days after issuance, payable in cash or, under certain conditions, in shares of common stock.

 

During fiscal 2024 and early fiscal 2025, the Company satisfied the obligations under the June 2024 Notes through a combination of cash payments and conversions into common stock. On September 26, October 1, and October 30, 2024, the Company converted principal payments totaling $227,776 into 85,837 shares, resulting in recognized losses of $14,203, $12,830, and $9,534, respectively. On October 11, 2024, the Company issued 2,317 shares pursuant to a make-whole provision. On December 2, 2024, December 20, 2024, and January 7, 2025, the Company made final principal payments totaling $572,224, of which $290,844 was converted into 340,419 shares, resulting in a recognized loss of $8,725. The remaining payments were made in cash, with additional losses of $2,668 and $69,310 recognized under make-whole provisions.

 

As of October 31, 2025, the balance of the June 2024 Notes was $0. For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $249,805 and $131,696, respectively, within interest expense in the consolidated statements of operations. Over the life of the notes, the Company recognized $381,501 in non-cash interest expense related to discounts.

 

August 1, 2024 Financing

 

On August 1, 2024, the Company entered into a Securities Purchase Agreement (the “August 1st SPA”) with an investor, pursuant to which the Company raised gross proceeds of $134,000 and received net proceeds of $110,625. In connection with the financing, the Company issued an unsecured promissory note in the principal amount of $152,000, reflecting an original issue discount of $18,000 (approximately 11.8%). The note accrued interest at 12% per annum and matured on May 30, 2025.

 

During fiscal 2025, the Company made aggregate principal payments of $148,960 in cash. In addition, during the third quarter of fiscal 2025, the Company issued 23,644 shares of common stock to the investor in satisfaction of a principal payment obligation. The shares were issued at a conversion price of $0.90 per share, representing a total value of $28,846. The fair value of the shares on the issuance date exceeded the principal amount settled, resulting in a recognized loss of $7,566, which was recorded in the consolidated statement of operations.

 

As of October 31, 2025, the balance of the note was $0. For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $41,652 and $17,963, respectively, within interest expense in the consolidated statements of operations.

 

August 6, 2024 Financing

 

On August 6, 2024, the Company entered into a Securities Purchase Agreement (the “August 6th SPA”) with an investor, pursuant to which the Company raised gross proceeds of $225,000 and received net proceeds of $199,250. In connection with the financing, the Company issued an unsecured promissory note in the principal amount of $255,225, reflecting an original issue discount of $30,225 (approximately 11.8%). The note accrued interest at 12% per annum and matured on May 30, 2025.

 

In conjunction with the April 2024 Debt Financing, the Company also made two payments of $25,000 each to prior investors from the net proceeds of this financing.

 

On January 28, 2025, the Company entered into a Note Exchange Agreement with the investor to exchange the outstanding balance of $285,852 for shares of the Company’s common stock. The exchange was completed on February 10, 2025, through the issuance of 230,992 shares of common stock at $1.24 per share. The Company recorded the exchange as a debt extinguishment and recognized a loss of $141,534.

 

As of October 31, 2025, the balance of the August 6, 2024 Financing was $0. For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $26,826 and $25,077, respectively, within interest expense in the consolidated statements of operations.

 

 

April 2025 Financing

 

On April 11, 2025, the Company issued an Unsecured Original Issue Discount Convertible Promissory Note (the “Note”) to an institutional investor in the principal amount of $321,176, reflecting an original issue discount of $48,176, for net funding of $273,000. After reimbursing the investor $10,000 for legal fees, the Company received net proceeds of $263,000.

 

On April 17, 2025, the Company issued an Amended and Restated Unsecured Original Issue Discount Convertible Promissory Note (the “Amended and Restated Note”) in the aggregate principal amount of $712,941, inclusive of the original note, with an aggregate original issue discount of $106,941. The aggregate funding amount was $606,000, from which the Company received additional net proceeds of $333,000 and paid a commission of $33,330 to Spartan Capital Securities, LLC.

 

Between June 11 and June 23, 2025, the Company issued an aggregate of 877,340 shares of common stock to the investor in satisfaction of principal obligations under the note. The issuances occurred at conversion prices ranging from $0.81 to $0.83 per share, for a total value of $1,240,054. The fair value of the shares issued exceeded the principal amounts settled, resulting in a total recognized loss of $528,054, which was recorded in the consolidated statement of operations.

 

As of October 31, 2025, the balance of the April 2025 Financing was immaterial. The Company derecognized the remaining carrying value of $861 related to the Jutland note at maturity on October 10, 2025, and recorded a gain on extinguishment of debt. For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $150,271 and $0, respectively, within interest expense in the consolidated statements of operations.

 

August 2025 Financing

 

On August 15, 2025, the Company closed a private placement pursuant to which it issued three unsecured convertible promissory notes (the “Notes”) to institutional investors in an aggregate principal amount of $1,200,000. The Notes included an original issue discount of $180,000 (15%), resulting in aggregate funding of $1,020,000. After payment of $71,400 in placement agent fees and $20,000 in legal fee reimbursements, the Company received net proceeds of $928,600.

 

The Notes mature on February 15, 2026 and may be prepaid at any time without penalty. The Notes are convertible, at the option of the investors, into shares of the Company’s common stock at a conversion price equal to the lesser of (i) $1.32 or (ii) 90% of the lowest daily VWAP of the Company’s common stock during the five trading days prior to conversion, subject to a floor price of $0.72 (adjustable under certain circumstances, but not below $0.22). The Notes also contain provisions allowing the Company to require conversion under specified trading and registration conditions, subject to beneficial ownership limitations of 4.99% (or 9.99% if elected by the investor). The maximum number of shares issuable upon conversion of the Notes is 1,679,127, representing 19.99% of the Company’s outstanding common stock as of the closing date.

 

Between September 12 and October 23, 2025, investors converted $575,000 of principal into 606,809 shares of common stock at conversion prices between $0.93 and $1.02 per share. The fair value of the shares issued exceeded the principal amounts settled, resulting in a total recognized loss on conversion of $95,931, which was recorded in the consolidated statement of operations. Following these conversions, the Notes had a remaining principal balance of $625,000 and a net carrying value of $467,179 as of October 31, 2025.

 

For the years ended October 31, 2025 and 2024, the Company recognized non-cash interest expense related to debt discounts of $113,575 and $0, respectively, within interest expense in the consolidated statements of operations.