Under this agreement, the Company will have the right, but not the obligation, to obtain the financing through the issuance of its common stock to the investor in a series of periodic draw downs. 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% 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 $2,000,000.
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 for the Company’s common stock identified when calculating the number of shares issued to the investor in return for funding a drawdown request shall be equal to 85% of the lowest closing Best Bid price of the Company’s common stock during a five trading day period following a drawdown request. If the stock price for the shares to be issued on any drawdown does not equal or exceed $0.80, as calculated, then funding under the drawdown request will not occur.
The sale of shares is subject to certain other conditions, including the effectiveness of a registration statement for resale of any shares purchased by the investor under this equity line.
The Company will use the funds received from drawdowns under this facility for expanding their Lithium Iron Phosphate production lines and advancing research and development of a Power Li-ion battery production business.
"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," said Mr. Bin Wang, Chairman and CEO of China Sun Group. "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."
The shares referred to in this press release may not be sold nor may offers to buy be accepted prior to the time a registration statement relating to the resale of the shares has been filed and becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
China Sun Group High-Tech Co. ("China Sun Group") produces anode materials used in lithium ion batteries. Through its wholly-owned operating subsidiary, Dalian Xinyang High-Tech Development Co. Ltd ("DLX"), the Company primarily produces cobaltosic oxide and lithium cobalt oxide.
According to the China Battery Industry Association, DLX has the second largest cobalt series production capacity in the People’s Republic of China. Through its research and development division, DLX owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries.
Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, the Company has now diversified into the manufacture of LIP and plans to forward integrate into the manufacture of power Li-ion batteries.
