SAN DIEGO, CA - Nuvve Holding Corp. (NASDAQ:NVVE), a company specializing in power distribution and specialty transformers, has entered into a material definitive agreement, as disclosed in a recent 8-K filing with the Securities and Exchange Commission.
On Monday, the company issued convertible promissory notes totaling $500,000 to entities affiliated with two insiders: Gregory Poilasne, the CEO, and David Robson, the CFO.
The notes, bearing a 10.5% annual interest rate, which could increase to 12.5% in the event of default, have a maturity date of October 31, 2024. The company secured $475,000 in cash through the issuance of these notes, with each note including an original issue discount of 5%.
Nuvve has the option to prepay the outstanding principal and accrued interest without penalty at any time before maturity and may elect to fully prepay the notes by September 30, 2024, at the non-discounted principal amount plus accrued interest.
In the event of a default, the holders have the option to demand immediate payment of the principal and interest or convert the outstanding balance into common stock at a conversion price of $0.492 per share. Additionally, should currently existing security interests be released, Nuvve has agreed to grant the note holders a security interest in substantially all of the company's assets.
This financial maneuver comes as part of Nuvve's broader financial strategy, as outlined in the SEC filing. The company's decision to engage in this form of financing with insiders suggests a commitment to managing its capital structure and addressing its financial obligations.
In other recent news, Nuvve Holding Corp. has reported a decrease in its Q2 2024 revenue to $802,000, down from $2.12 million in the same period of the previous year. This decline was attributed to delayed EPA funding approvals for school districts.
However, the company remains hopeful for future growth, with orders expected to pick up in the following quarters. Nuvve also announced a strategic collaboration in the form of a joint venture, Deep Impact 1 LLC, with WISE EV-LLC to enhance its electric vehicle (EV) charging infrastructure.
In an additional partnership with WISE EV, the company plans to introduce over 100 EV charging stations at high-traffic locations nationwide, leveraging Nuvve’s vehicle-to-grid technology.
Despite the decrease in revenue, Nuvve showed improved margins due to better pricing on hardware sales and a higher mix of service and grant revenues, while operating costs decreased, reflecting ongoing efficiency efforts.
InvestingPro Insights
In light of Nuvve Holding Corp.'s recent financial activities, pertinent data from InvestingPro provides additional context for investors. As of the last twelve months up to Q2 2024, Nuvve has a market capitalization of just $3.25 million, reflecting its standing in the market. The company's revenue growth during this period was modest at 4.65%, which is a figure that analysts will likely monitor closely in relation to the company's sales growth projections for the current year. Despite this revenue growth, the company's operating income margin was deeply negative at -487.29%, suggesting significant operational challenges.
InvestingPro Tips highlight a couple of critical concerns for investors: Nuvve operates with a substantial debt burden and is rapidly depleting its cash reserves. These factors, combined with the lack of profitability over the last twelve months and a forecast from analysts that the company will not be profitable this year, could influence investment decisions. The stock's high price volatility and the significant drop in its price over various periods – including a nearly half reduction over the last six months – may also play into investors' risk assessments.
For a more comprehensive set of InvestingPro Tips, investors can explore the 14 additional tips available on InvestingPro. These tips delve into various aspects of Nuvve's financial health and market performance, offering valuable insights for those considering an investment in the company.
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