Nuvve issues new convertible notes and warrants

On Monday, Nuvve Holding Corp., a company specializing in power distribution and specialty transformers, announced the issuance of $1.67 million in senior convertible promissory notes and accompanying warrants. This transaction, part of an agreement with accredited investors, is intended to raise capital for working capital and general corporate purposes. According to InvestingPro data, the company’s financial health score stands at a concerning 1.24 (WEAK), with a current market capitalization of just $1.55 million and significant cash burn rate.

The notes, issued at a 10% original issue discount, are convertible into shares of Nuvve’s common stock, with an 18-month maturity that the company can extend by six months under certain conditions. The accompanying warrants allow investors to purchase shares at a price of $2.02 per share, which is 95% of the average of the five lowest trading prices in the ten days before the investors exercised their right to additional investment. This financing comes as the company faces challenges with its existing debt burden of $7.88 million and a tight current ratio of 1.15.

Investors have the option to convert the notes into common stock at any time, with the conversion price set at $2.02 per share, subject to adjustments and protections against dilution. The notes accrue interest at an 8% annual rate, which could increase to 18% in the event of a default. Monthly installments to repay the principal and interest will begin on April 30, 2025, or upon the effectiveness of a related registration statement, whichever comes first.

The additional warrants are immediately exercisable and will expire five years post-issuance. They can be exercised on a cashless basis under certain conditions, such as during a fundamental company transaction or if the underlying common stock is not covered by an effective registration statement. InvestingPro analysis reveals the stock has experienced significant volatility, with a 50% decline year-to-date and an 80% drop over the past year. Get access to 18 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.

Nuvve, which has agreed to file a registration statement for the common stock underlying the notes and warrants within 15 days of the issuance, expects to use the net proceeds from this offering for working capital and other corporate purposes. With annual revenue of $5.14 million and significant operating losses, the company’s financial position remains challenging. The securities in this transaction were offered under an exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D. For detailed insights and Fair Value analysis, check out the comprehensive Pro Research Report available on InvestingPro.

This report, based on a press release statement, does not constitute an offer to sell or a solicitation of an offer to buy the securities described.

In other recent news, Nuvve Holding Corp. has announced several developments of interest to investors. The company has secured a significant contract with the State of New Mexico, valued at approximately $400 million, to support zero-emission vehicle initiatives and renewable energy goals. This contract will facilitate the electrification of public agency fleets in New Mexico. Additionally, Nuvve has launched a new subsidiary, NUVVE Japan, as part of its international expansion strategy to boost its vehicle-to-grid (V2G) technology growth. This move is aimed at tapping into Japan’s growing market for electric vehicle infrastructure.

In financial developments, Nuvve shareholders have approved the issuance of additional shares of common stock, which will enhance the company’s financial flexibility. The approval includes increasing the total number of authorized shares from 100,000,000 to 200,000,000. Furthermore, Nuvve has amended its securities agreement to allow buyers to exercise investment rights by February 2025, potentially bringing in an additional $1.5 million in capital.

Nuvve has also partnered with Roth Capital Partners (WA:CPAP) to explore strategic growth opportunities and market expansion, focusing on acquisitions and partnerships. This collaboration is expected to support Nuvve’s goal of leading in grid modernization and expanding its V2G ecosystem. These recent developments reflect Nuvve’s ongoing efforts to strengthen its market position and financial standing.

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