8-K: Awaysis Capital Secures $150,000 Convertible Loan from Co-CEO and CFO Andrew Trumbach

Awaysis Capital, Inc. has entered into a $150,000 convertible promissory note with its Co-CEO and CFO, Andrew Trumbach, to fund working capital and general corporate purposes.

Summary

• Awaysis Capital, Inc. (the "Company") entered into a Convertible Promissory Note with Andrew Trumbach, the Company's Co-CEO and CFO, on May 21, 2025.
• The note formalizes a $150,000 loan provided by Dr. Trumbach to the Company on April 10, 2025.
• The loan carries a fixed interest rate of 12% per annum, calculated on a 365-day year basis.
• The principal, accrued interest, and any fees are due and payable on October 10, 2025 (the "Maturity Date").
• The note is convertible, in whole or in part, into the Company's common stock at the option of Dr. Trumbach at any time prior to the Maturity Date.
• The conversion price is $0.16 per share, and any unpaid interest can also be converted into common stock on the same terms.
• Proceeds from the loan are designated for working capital and general corporate purposes.
• The note includes customary Events of Default, which allow Dr. Trumbach to accelerate the due date of unpaid principal and interest.

Sentiment

Score: 6

Explanation: The company successfully secured necessary working capital, which is a positive for its operations. However, the financing comes from an insider at a relatively high interest rate and carries potential future dilution, making the overall sentiment moderately positive rather than strongly so.

Positives

• The Company secured $150,000 in financing, providing immediate working capital for general corporate purposes.
• The loan helps address the Company's liquidity needs without immediate reliance on external capital markets.

Negatives

• The financing is a related-party transaction, raising potential corporate governance considerations.
• The 12% annual interest rate is relatively high, increasing the Company's debt servicing costs.
• The note is unsecured, meaning it is not backed by any Company assets, which could pose a risk to the lender in case of default.
• The potential conversion of the note into common stock at $0.16 per share could lead to dilution for existing shareholders.

Risks

• **Default Risk:** The Company faces the risk of default if it fails to make payments of principal or interest, or if it experiences bankruptcy, dissolution, or other specified events.
• **Subordination Risk:** The repayment of this note is explicitly subordinated to any "Senior Indebtedness" from unrelated third-party lenders, meaning senior creditors would be paid first in a liquidation event.
• **Dilution Risk:** If the note is converted into common stock by the holder, it will increase the number of outstanding shares and could dilute the ownership percentage of current shareholders.
• **Unsecured Obligation:** The note is unsecured, meaning the lender does not have a lien on the Company's assets, which could impact recovery in a default scenario.

Future Outlook

The Company intends to use the proceeds from the $150,000 loan for working capital and general corporate purposes, indicating a focus on supporting ongoing operations and strategic initiatives.

Management Comments

• Andrew Trumbach, the Company's Co-CEO and CFO, is the lender of the $150,000 convertible promissory note.
• The Form 8-K was signed by Andrew Trumbach as Co-CEO and CFO.
• The Convertible Promissory Note itself was signed on behalf of Awaysis Capital Inc. by Michael Singh, Co-CEO & Chairman, and acknowledged and accepted by Andrew Trumbach as Holder.

Industry Context

This internal financing arrangement is common for smaller public companies or those in early growth stages, where securing capital from traditional lenders or public markets might be more challenging or costly. It allows the company to address immediate liquidity needs and fund operations, often leveraging insider confidence in the company's future.

Comparison to Industry Standards

• Internal financing from an executive, while providing necessary capital, is not a standard market transaction and typically occurs when external financing options are less favorable or unavailable.
• The 12% interest rate is relatively high for a corporate loan, especially from an insider, suggesting either a perceived higher risk by the lender or a premium for immediate, flexible capital without extensive external due diligence.
• The unsecured nature of the note means it lacks collateral, which is less common for external corporate debt but can be accepted in related-party transactions due to the lender's direct involvement and knowledge of the company.

Corporate Governance

Related Party Transactions

• Awaysis Capital, Inc. entered into a $150,000 Convertible Promissory Note with Andrew Trumbach, who serves as the Company's Co-CEO and CFO. This is a direct financial obligation to a key executive.

Stakeholder Impact

• **Shareholders:** Face potential dilution if the convertible note is exercised by Andrew Trumbach, increasing the number of outstanding shares.
• **Company:** Benefits from immediate access to $150,000 in working capital, supporting operations and general corporate purposes. Incurs a debt obligation with a 12% annual interest rate.
• **Andrew Trumbach (Lender/Co-CEO/CFO):** Provides capital to the Company, earns 12% interest on the loan, and holds the option to convert the debt into equity at a fixed price, potentially benefiting from future stock appreciation.

Next Steps

• The Company is obligated to repay the principal and accrued interest of the note by the Maturity Date of October 10, 2025, unless the note is converted into common stock.
• The holder, Andrew Trumbach, has the option to convert the note into common stock at any time prior to the Maturity Date.

Key Dates

Keywords

Awaysis Capital, AWCA, Convertible Promissory Note, Andrew Trumbach, Related Party Loan, Working Capital, Corporate Finance, SEC Filing, 8-K, Debt Financing, Equity Conversion, Unsecured Debt