CN Energy Group Secures Up to $10M Equity Line
Ticker: CNEY · Form: 6-K · Filed: Oct 17, 2024 · CIK: 1780785
Sentiment: neutral
Topics: financing, equity-line, capital-raise
TL;DR
CN Energy just inked a $10M equity line with Streeterville Capital for future share sales.
AI Summary
On October 10, 2024, CN Energy Group, Inc. entered into a securities purchase agreement with Streeterville Capital, LLC. This agreement allows the company to issue and sell up to $10 million of its ordinary shares to Streeterville Capital over a 36-month period. The company intends to use the net proceeds for general corporate purposes and working capital.
Why It Matters
This provides CN Energy Group with a flexible source of capital, potentially enabling future growth and operational flexibility without immediate dilution.
Risk Assessment
Risk Level: medium — The company is entering into an equity financing agreement, which can be dilutive to existing shareholders and may indicate a need for capital.
Key Numbers
- $10.0M — Equity Line (Maximum potential capital to be raised from Streeterville Capital over 36 months.)
Key Players & Entities
- CN Energy Group, Inc. (company) — The reporting company
- Streeterville Capital, LLC (company) — Party to the securities purchase agreement
- $10 million (dollar_amount) — Maximum amount of ordinary shares to be sold
- October 10, 2024 (date) — Date of the securities purchase agreement
- 36-month period (date) — Duration over which shares can be sold
FAQ
What is the maximum amount CN Energy Group can raise under the agreement?
CN Energy Group can issue and sell up to $10 million of its ordinary shares to Streeterville Capital.
Who is the counterparty to the securities purchase agreement?
The counterparty is Streeterville Capital, LLC.
When was the securities purchase agreement entered into?
The agreement was entered into on October 10, 2024.
What is the duration of the agreement?
The agreement allows for the sale of shares over a 36-month period.
What does CN Energy Group intend to use the proceeds for?
The company intends to use the net proceeds for general corporate purposes and working capital.
Filing Stats: 722 words · 3 min read · ~2 pages · Grade level 11.1 · Accepted 2024-10-16 17:32:14
Key Financial Figures
- $3,149,750.00 — ber 10,2024, in the principal amount of $3,149,750.00 (the "Note"), convertible into Class A
- $2,925,000 — inary Shares"), for a purchase price of $2,925,000. The Note bears interest at a rate of
- $204,750.00 — includes an original issue discount of $204,750.00 along with $20,000.00 for the Investor'
- $20,000.00 — ssue discount of $204,750.00 along with $20,000.00 for the Investor's legal fees, accounti
- $0.10412 — ent. The Note contains a floor price of $0.10412 for the possible future conversions int
- $3,149,750 — File No. 333-264579), to register up to $3,149,750 Class A Ordinary Shares issuable upon t
Filing Documents
- cney_6k.htm (6-K) — 16KB
- cney_ex51.htm (EX-5.1) — 53KB
- cney_ex101.htm (EX-10.1) — 125KB
- cney_ex102.htm (EX-10.2) — 60KB
- cney_ex51img4.jpg (GRAPHIC) — 8KB
- cney_ex51img5.jpg (GRAPHIC) — 5KB
- cney_ex51img6.jpg (GRAPHIC) — 3KB
- 0001477932-24-006493.txt ( ) — 277KB
From the Filing
cney_6k.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the Month of October 2024 Commission file number: 001-39978 CN ENERGY GROUP. INC. Building 2-B, Room 206, No. 268 Shiniu Road Liandu District, Lishui City, Zhejiang Province The People's Republic of China (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F Form 40-F Entry into Securities Purchase Agreement with Streeterville Capital, LLC On October 10, 2024, CN Energy Group. Inc., a British Virgin Islands company (the "Company"), entered into a securities purchase agreement (the "Purchase Agreement") with Streeterville Capital, LLC, a Utah limited liability company (the "Investor"), pursuant to which the Company issued to the Investor an unsecured promissory note, on October 10,2024, in the principal amount of $3,149,750.00 (the "Note"), convertible into Class A ordinary shares, no par value, of the Company (the "Class A Ordinary Shares"), for a purchase price of $2,925,000. The Note bears interest at a rate of 7% per annum. All outstanding principal and accrued interest on the Note will become due and payable twelve months after the purchase price of the Note is delivered by the Investor to the Company. The Note includes an original issue discount of $204,750.00 along with $20,000.00 for the Investor's legal fees, accounting costs, due diligence, monitoring, and other transaction costs incurred in connection with the purchase and sale of the Note. The Company may prepay all or a portion of the Note at any time by paying 105% of the outstanding principal balance elected for pre-payment. The Note contains a floor price of $0.10412 for the possible future conversions into Class A Ordinary Shares. Under the Purchase Agreement, while the Note is outstanding, the Company agrees to keep adequate public information available and maintain its Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the Note), the Investor shall have the right to increase the balance of the Note by 10% for Major Trigger Event (as defined in the Note) and 5% for Minor Trigger Event (as defined in the Note). In addition, the Note provides that upon the occurrence of an Event of Default (as defined in the Note), the interest rate shall accrue on the outstanding balance at the rate equal to the lesser of 15% per annum or the maximum rate permitted under applicable law. On October 16, 2024, the transaction contemplated by the Purchase Agreement was closed as all the closing conditions as set forth therein have been satisfied. On October 11, 2024, the Company filed a prospectus supplement (the "Prospectus Supplement") under the registration statement on Form F-3 (File No. 333-264579), to register up to $3,149,750 Class A Ordinary Shares issuable upon the conversion of the Note. The Prospectus Supplement included certain updated disclosures regarding the Company, in particular, in the sections captioned "Prospectus Supplement Summary—Recent Developments". In addition, the Company is furnishing in this current report, as Exhibit 5.1 hereto, an opinion of Carey Olsen Singapore LLP. Capitalized terms that are not defined herein may have meanings assigned to them in the Purchase Agreement and the Note. The foregoing descriptions of the Purchase Agreement and the Note are summaries of the material terms of such agreements, do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement and the Note, which are attached hereto as Exhibits 10.1 and 10.2. This current report on form 6-K is incorporated by reference into the Company's registration statements on Form F-3 (File No. 333-264579). 2 EXHIBITS Exhibit No. Description 5.1 Opinion of Carey Olsen Singapore LLP, British Virgin Islands counsel to the Company 10.1 Securities Purchase Agreement dated October 10, 2024, by and between the Company and the Investor 10.2 Convertible Promissory Note dated October 10, 2024, by and between the Company and the Investor 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CN Energy Group. Inc. Date: October 16, 2024 By: /s/ Wenhua Liu Name: Wenhua Liu Title: Interim Chief Executive Officer 4