SECsense Logo

Eshallgo Inc. Financial Report: Capital Raise through Convertible Debentures

$EHGO
Form 6-K
Filed on: 2024-12-23
Source
Eshallgo Inc. Financial Report: Capital Raise through Convertible Debentures

Here are the key insights extracted from the financial report (Form 6-K) filed by Eshallgo Inc.:

  1. Company Overview: Eshallgo Inc. is a foreign private issuer based in Shanghai, China.
  2. Securities Purchase Agreement:
  • Date of Agreement: November 29, 2024.
  • The Company entered into a Securities Purchase Agreement to place Convertible Debentures (the "Debentures") with an accredited investor.
  • Total Principal Amount: Up to $5,000,000.
  • Maturity Date: November 28, 2025.
  • Interest Rate: 5% per annum, increasing to 18% in the event of default.
  1. Transaction Details:
  • The initial closing of the transaction amounted to $1,500,000 in Debentures on November 29, 2024.
  • A second closing occurred on December 19, 2024, for an additional $2,000,000 in Debentures.
  • A total of $100,000 was paid to an affiliate of the Debenture Holder as a cash fee (5% of the second closing amount).
  1. Registration Statement:
  • On December 17, 2024, Eshallgo Inc. filed a registration statement on Form F-1 with the SEC to register the resale of Class A ordinary shares upon conversion of the Debentures.
  1. Legal Disclaimers: The report emphasizes that it does not constitute an offer to sell or a solicitation to purchase any securities.
  2. Signatory: The report is signed by Qiwei Miao, the Chief Executive Officer, on December 23, 2024.

This report indicates Eshallgo Inc.'s efforts to raise capital through convertible debt while outlining the terms and structure of the financing. The increase in interest rate upon default is a critical risk factor for potential investors to consider.