8-K: Nuvve Secures $100K in Convertible Note and Warrants

Nuvve Holding Corp. issued a $111,111.11 senior convertible note and accompanying warrants to an investor, raising $100,000 for working capital.

Summary

• Nuvve Holding Corp. completed an "Additional Investment Right" issuance on December 17, 2025, under a previously disclosed Securities Purchase Agreement.
• The company issued a senior convertible promissory note with a principal amount of $111,111.11, which included a 10% original issue discount.
• Accompanying warrants to purchase shares of common stock were also issued to the investor.
• The gross proceeds received by the company from this issuance, before expenses, totaled $100,000.
• The note carries an annual interest rate of 8.0%, which will automatically increase to 18.0% per annum if an event of default occurs.
• The note has a maturity date 18 months from its issuance (June 17, 2027), with a company option to extend by up to six additional months under specific conditions, including a 33% principal repayment/conversion and no ongoing event of default.
• The conversion price for the note and the exercise price for the warrants are set at $3.88 per share, subject to full ratchet anti-dilution protection and other standard adjustments.
• Principal and accrued interest on the note are payable in equal monthly installments, commencing on the earlier of February 28, 2026, or the effective date of the required registration statement.
• Installments can be paid in cash or, if certain Equity Conditions are met, in shares of Common Stock based on the Installment Conversion Price.
• The warrants will expire five years after their issuance date, on December 17, 2030.
• The net proceeds from this issuance are designated for working capital and general corporate purposes.

Sentiment

Score: 5

Explanation: The capital raise provides needed working capital but comes with potentially significant future dilution risks due to full ratchet anti-dilution and numerous events of default tied to stock performance and operational compliance. The 10% OID also reduces the effective capital received.

Positives

• Secured $100,000 in gross proceeds, providing additional working capital for general corporate purposes.
• The company has the option to extend the note's maturity by up to six months under specific conditions, offering financial flexibility.
• The financing structure includes anti-dilution protection for the investor, which, while potentially dilutive to existing shareholders, helps attract capital.

Negatives

• The note includes a 10% original issue discount, meaning the company received less cash ($100,000) than the principal amount ($111,111.11).
• A high default interest rate of 18.0% per annum will be triggered upon any event of default, significantly increasing the cost of debt.
• The conversion price and warrant exercise price of $3.88 are subject to full ratchet anti-dilution, which can lead to substantial dilution for existing shareholders if future equity is issued at a lower price.
• Numerous stringent events of default conditions, including failure to maintain Nasdaq listing, failure to timely deliver shares, and failure to meet registration statement deadlines, could trigger immediate redemption obligations at a premium (115%).
• Covenants restrict the company's ability to incur other indebtedness, create liens, make restricted payments, or change its business nature, potentially limiting operational flexibility.
• A 'Price Failure' (VWAP below $2.50 for 20 trading days) or 'Volume Failure' (daily trading volume below $350,000 for 20 trading days) constitutes an Event of Default, linking debt obligations to stock performance.
• The departure of the Chief Executive Officer or Chief Financial Officer (as of the Issuance Date) constitutes an Event of Default.

Risks

• Dilution Risk: The full ratchet anti-dilution protection on the conversion and exercise prices means that if Nuvve issues equity at a lower price in the future, the investor's conversion/exercise price will be reduced, leading to greater dilution for existing shareholders.
• Liquidity Risk: The company faces potential cash redemption obligations at a premium (115% for Event of Default, 105% for Installment Redemption, 115% for Subsequent Placement Optional Redemption) if various events of default or other conditions are triggered, which could severely strain liquidity.
• Operational Covenants Risk: Strict covenants limit the company's financial and operational flexibility, including restrictions on incurring indebtedness, creating liens, making restricted payments, and changing the nature of its business.
• Market Price and Volume Risks: A sustained low stock price (VWAP below $2.50 for 20 trading days) or low trading volume (below $350,000 for 20 trading days) constitutes an Event of Default, which could trigger redemption obligations.
• Registration Statement Risk: Failure to file or achieve effectiveness of the registration statement for the underlying shares within specified deadlines is an Event of Default, impacting the investor's ability to resell shares and the company's ability to pay in stock.
• Management Stability Risk: The departure of the CEO or CFO is an Event of Default, which could create instability and trigger redemption obligations.
• Authorized Share Risk: Insufficient authorized shares to cover conversions/exercises would require a stockholder meeting to approve an increase, and failure to do so could lead to cash redemption obligations.

Future Outlook

Nuvve intends to use the net proceeds from this issuance for working capital and general corporate purposes. The company is obligated to file a registration statement for the underlying shares within 15 days of the issuance date and aims for it to be declared effective by the SEC within 30 days (or 60 days if the SEC reviews it). This registration is crucial for the investor's ability to resell the shares and for the company to potentially pay future note installments in stock.

Management Comments

• Nuvve Holding Corp. intends to use the net proceeds from the AIR Issuance for working capital and general corporate purposes.

Industry Context

This financing event provides Nuvve with additional capital, which is common for growth-stage companies, particularly in the electric vehicle (EV) charging and vehicle-to-grid (V2G) technology sector, where significant R&D and infrastructure investment are often required. The terms, including convertible notes and warrants with anti-dilution provisions, reflect a financing strategy often seen in companies seeking capital while managing immediate cash outflow, but at the cost of potential future dilution.

Comparison to Industry Standards

• The use of convertible notes and warrants with anti-dilution features is a common financing mechanism for early-stage or growth companies, particularly those in capital-intensive sectors like EV infrastructure, where traditional debt might be harder to secure or more expensive.
• The 8.0% interest rate is within a reasonable range for unsecured convertible debt for a company of Nuvve's profile, though the 18.0% default rate is high, reflecting the increased risk upon breach.
• Full ratchet anti-dilution protection is a strong investor-friendly term, more aggressive than weighted-average anti-dilution, and can lead to substantial dilution for existing shareholders if the stock price declines and new equity is issued at lower valuations. This is often seen in distressed or high-risk financings.
• The beneficial ownership limitation of 9.99% is standard to prevent the investor from triggering beneficial ownership reporting requirements under Section 13(d) of the Exchange Act.
• The 'Price Failure' and 'Volume Failure' clauses as events of default are aggressive terms, indicating investor sensitivity to the company's stock performance and liquidity, which is not uncommon in highly structured financings for smaller cap companies.

Management Changes

Corporate Governance

Legal Proceedings

• The filing mentions that if the note is placed in the hands of an attorney for collection or enforcement, or if there are bankruptcy/reorganization proceedings involving a claim under the note, the company shall pay the costs incurred by the Holder, including attorneys' fees. This is a standard clause in debt instruments and does not indicate current legal proceedings.

Related Party Transactions

• The filing does not explicitly mention related party transactions beyond the issuance to 'a certain Investor' as part of a previously disclosed Securities Purchase Agreement. No specific related party disclosures are made.

Stakeholder Impact

• Shareholders: Potential for significant dilution due to the convertible nature of the note and warrants, especially with full ratchet anti-dilution. The stock price and trading volume covenants could also impact share price stability.
• Creditors: The note ranks pari passu with other notes and senior to other indebtedness, which could affect the recovery prospects of other creditors in a default scenario.
• Management: The CEO and CFO are subject to a covenant where their departure constitutes an Event of Default, adding pressure on management stability.

Next Steps

• Company to file a registration statement for the shares underlying the Additional Note and Warrants within 15 days of December 17, 2025.
• Company to use best efforts to cause the registration statement to be declared effective by the SEC within 30 days (or 60 days if SEC reviews).
• Monthly installment payments on the Additional Note will commence on the earlier of February 28, 2026, or the effective date of the registration statement.
• Company must maintain a PCAOB registered auditor.
• Company must reserve sufficient authorized shares for conversion/exercise.

Key Dates

Recommendation

The capital raise provides Nuvve with necessary working capital, which is a positive for continued operations and strategic initiatives. However, the terms of the financing, particularly the full ratchet anti-dilution protection on the convertible note and warrants, introduce significant potential for future dilution for existing shareholders. The numerous and stringent events of default, including those tied to stock price and trading volume, also highlight considerable risk and could lead to forced redemptions at a premium, further straining the company's finances. While the capital is beneficial, the highly investor-friendly terms and associated risks suggest a 'hold' recommendation, advising investors to monitor the company's execution, stock performance, and ability to manage these covenants closely before making further investment decisions.

Keywords

Nuvve Holding Corp, NVVE, convertible note, warrants, capital raise, financing, SEC filing, 8-K, anti-dilution, stock dilution, debt financing, equity financing, working capital, corporate governance, risk management, Nasdaq