8-K: Nuvve Secures $250K via Convertible Note and Warrants

Nuvve Holding Corp. issued a $277,777 senior convertible promissory note and accompanying warrants to an investor, generating $250,000 in gross proceeds for working capital.

Summary

• Nuvve Holding Corp. issued a $277,777 principal amount senior convertible promissory note (Additional Note) and accompanying warrants (Additional Warrant) to an investor on November 17, 2025.
• This issuance was part of an 'Additional Investment Right' under a previously disclosed securities purchase agreement from October 31, 2024.
• The company received gross proceeds of $250,000 from this issuance, reflecting a 10% original issue discount (OID) on the Additional Note.
• The Additional Note matures 18 months from the issuance date (May 17, 2027) and accrues interest at 8.0% per annum, which increases to 18.0% per annum upon an event of default.
• The company has an option to extend the note's term by up to six months if certain conditions are met, including 33% principal repayment/conversion and no ongoing event of default.
• The Additional Note is convertible into common stock at the investor's option at a conversion price of $0.1384 per share, subject to full ratchet antidilution protection.
• The Additional Warrant is exercisable for up to 100% of the shares the Additional Note is convertible into, at an exercise price of $0.1384 per share, and expires five years after the issuance date (November 17, 2030).
• Both the conversion price and exercise price represent 95% of the average of the five lowest trading prices in the ten trading days prior to the investor's exercise of the Additional Investment Right.
• Conversions and exercises are subject to a 9.99% beneficial ownership limitation for the investor and its affiliates.
• The company intends to use the net proceeds for working capital and general corporate purposes.

Sentiment

Score: 3

Explanation: The issuance provides necessary capital but on highly dilutive and potentially costly terms, including a significant OID, low conversion/exercise prices with full ratchet antidilution, and a high default interest rate. This suggests financial strain and unfavorable bargaining power for the company, outweighing the benefit of securing funds.

Positives

• Secured $250,000 in gross proceeds, providing capital for working capital and general corporate purposes.
• The company has the option to extend the note's term by up to six months under specific conditions, offering some financial flexibility.

Negatives

• The Additional Note carries a 10% original issue discount, meaning the company received less cash than the principal amount it is obligated to repay or convert.
• The conversion and exercise prices ($0.1384 per share) are set at 95% of the average of the five lowest trading prices in the ten trading days prior to the investor's exercise, indicating a low valuation relative to recent trading activity.
• The note includes full ratchet antidilution protection, which can be highly dilutive to existing shareholders if future equity is issued at a lower price.
• A high default interest rate of 18.0% per annum will automatically apply if an event of default occurs, significantly increasing the cost of debt.
• The issuance of convertible notes and warrants inherently creates potential for significant dilution for existing shareholders upon conversion or exercise.

Risks

• **Dilution Risk:** Significant potential for dilution to existing shareholders upon conversion of the Additional Note and exercise of the Additional Warrant, exacerbated by the full ratchet antidilution protection and low conversion/exercise prices.
• **Low Valuation:** The conversion and exercise prices are based on a low trading price, suggesting a potentially distressed valuation of the company's common stock.
• **Default Risk:** The Additional Note contains customary events of default, which, if triggered, could lead to mandatory cash redemption at a premium or conversion at a potentially even lower 'Alternate Conversion Price,' further impacting the company's financial stability.
• **Market Price Volatility:** The conversion and exercise terms are highly sensitive to the company's stock price, with mechanisms (like the Alternate Conversion Price) that can further reduce the effective conversion price if the stock price declines.
• **Regulatory Compliance:** Failure to timely file or make effective the required registration statement for the underlying shares constitutes an event of default under the note.
• **Authorized Share Failure:** If the company does not have a sufficient number of authorized and unreserved shares of common stock, it may be required to pay cash for redemption or take costly actions to increase authorized shares, potentially leading to further defaults.
• **Financial Strain:** The terms of this financing (e.g., OID, low conversion price, high default interest) imply underlying financial challenges and a weak bargaining position for the company.

Future Outlook

The company intends to use the net proceeds from this issuance for working capital and general corporate purposes. It is obligated to file a registration statement for the resale of the underlying common stock within 15 days following the November 17, 2025 issuance and use reasonable best efforts to have it declared effective by the SEC within 30 days (or 60 days if reviewed by the SEC).

Industry Context

This financing event is a company-specific capital raise, typical for smaller or growth-stage companies seeking to fund operations. The terms, particularly the low conversion/exercise price and full ratchet antidilution, suggest a challenging capital-raising environment for the company, potentially reflecting its specific financial position rather than broad industry trends.

Stakeholder Impact

• **Shareholders:** Existing shareholders face significant potential for dilution due to the convertible nature of the note and warrants, especially given the low conversion/exercise prices and the full ratchet antidilution protection. This transaction is likely to negatively impact per-share value.
• **Creditors (Note Holders):** The note holders benefit from senior ranking, a high default interest rate, and strong antidilution protection, enhancing their position and providing significant downside protection.

Next Steps

• The company must file a registration statement to register the shares underlying the Additional Note and Additional Warrant within 15 days of the November 17, 2025 issuance.
• The company must use reasonable best efforts to cause this registration statement to be declared effective by the SEC within 30 days (or 60 days if reviewed by the SEC).
• The company will commence monthly installment payments of principal and accrued interest on the Additional Note, starting on the earlier of January 31, 2026, or the effective date of the registration statement.

Key Dates

Recommendation

The terms of this financing are highly unfavorable for existing shareholders. The 10% original issue discount, very low conversion/exercise prices ($0.1384, which is 95% of recent low trading prices), and full ratchet antidilution protection indicate severe dilution risk. The high default interest rate (18%) further highlights the company's precarious financial position. While the capital raise provides short-term liquidity, the long-term implications for shareholder value are significantly negative due to the dilutive structure and the company's apparent weak bargaining power in securing this financing. This suggests a deteriorating financial outlook and significant downside risk for current equity holders.

Keywords

Convertible Note, Warrants, Equity Financing, Dilution, SEC Filing, Nuvve Holding Corp, NVVE, Capital Raise, Debt, Antidilution, Nasdaq, OID