CN Energy Group Inc., a Chinese manufacturer of wood-based activated carbon, seeks a $25 million initial public offering in New York.
The Hangzhou-based company has applied to sell 5 million of its ordinary shares in the price range of $4 to $5 apiece. Network 1 Financial Securities, as the sole underwriter, may acquire an additional 750,000 ordinary shares in CN Energy.
In its preliminary prospectus, filed Thursday with the SEC, CN Energy said it supplies wood-based activated carbon for uses in pharmaceutical manufacturing, industrial manufacturing, water purification, environmental protection, and food and beverage production through its subsidiary, Khingan Forasen.
CN Energy said it gets raw materials in the Greater Khingan Range, as well as Inner Mongolia, and operates manufacturing facilities in Tahe County, Heilongjiang Province.
The company also produces biomass electricity generated in the process of producing activated carbon. It supplies the electricity to State Grid Heilongjiang Electric Power Co.
Another of CN Energy’s big clients is Hangzhou Lianmu Technology Co., Ltd., for which it provides “activated carbon mixing ratio adjustments, activated carbon component indicator analyses, absorptive capacity tests, and other technical support,” according to the filing.
For the six months through March 2020, CN Energy reported $4.8 million in revenues, up 21% year-over-year. Net income in the same period was $684,137 compared with $522,827 in the half-year through March 2019, the company reported. It sold 3,816 tons of activated carbon and 1,159,917 kWh of biomass electricity during the six months through March 2020.
For the year ended September 2019, the company scored revenues of $8.1 million on income of $1.6 million, the prospectus said.
CN Energy said it intends to use 80% of the proceeds from its IPO in New York for the construction of its manufacturing facility in Manzhouli City, which has begun. In addition, CN Energy hopes to boost its R&D and to fund working capital and other general purposes.
The company has reserved the ticker symbol “CNEY” for trading on the Nasdaq Capital Market.
The prospectus included a report of an independent public accounting firm, Friedman LLP, which stated that it is registered with the U.S. Public Company Accounting Oversight Board and that it conducted its audits in accordance with the PCAOB standards.