China Sun Group High-Tech Co. Ltd., a supplier of raw materials for rechargeable Lithium-ion (Li-ion) batteries in China, today announced it has signed a definitive binding agreement with an institutional investor to provide the company with up to $15 million in equity financing through the periodic sales of common stock over a 12-month term.
Bin Wang, chairman and CEO of China Sun, said the funding will allow the company to fuel its growth and ramp up its business opportunities.
“This facility provides us with sufficient additional funding to increase production capacity for our existing products and to start research and development work for our potential entry into the Power Li-ion battery business,” Wang stated in the press release. “Going forward, China Sun’s strong internal cash flow, existing cash reserves and this facility provide the resources for the next phase of the company’s growth. Furthermore, we believe that our new equity line providers are highly experienced in the new clean energy sector and will give us additional insight as we increase the scale of our business.”
Per the agreement, China Sun will retain the right, without obligation, to obtain the financing through the issuance of its common stock to the investor in a series of periodic draw downs.
According to the press release: The shares may be sold to the investor during this 12-month period at times and in drawdown amounts, subject to the amount of shares requested for drawdown being (A) at least equal to the value of 100 percent of the average daily volume (U.S. market only) of the company’s common stock for the Ten (10) Trading Days prior to the applicable date of the drawdown request; provided, however, that the amount requested for drawdown shall not be less than $200,000, or (B) up to $2 million. The company shall not be entitled to submit a drawdown request sooner than ten Trading Days from the end of previous funding of a drawdown request. The right to drawdown under the facility is subject to various additional conditions.
The purchase price of China Sun’s common stock shall be equal to 85 percent of the lowest closing best bid price of the company’s common stock during a five-trading day period following a drawdown request. If share prices to be issued on any drawdown are less than $0.80, as calculated, then funding under the drawdown request will not occur.
China Sun said it will use the funds received from drawdowns to expand its Lithium Iron Phosphate production lines and advancing research and development of a Power Li-ion battery production business.
For more information visit www.china-sun.cn