Aug 30 2010
China Sun Group High-Tech Co., Ltd. (OTC Bulletin Board: CSGH) ("China Sun Group" or the "Company"), a vertically integrated supplier of raw materials for rechargeable Lithium-ion (Li-ion) batteries in China, today announced that it has entered into a definitive binding agreement with an institutional investor to provide the Company with up to $15,000,000 in equity financing, via periodic sales of common stock over a 12 month term.
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.