Eshallgo Inc Secures $5 Million through Convertible Debenture Offering

SHANGHAI, Dec. 2, 2024 /PRNewswire/ -- Eshallgo Inc ("Eshallgo" or the "Company") (NasdaqCM: EHGO), one of the leading office solution providers in China, today announced that it has entered into a securities purchase agreement (the "Securities Purchase Agreement") with an accredited investor to issue convertible debentures (the "Debentures") in an aggregate principal amount of up to $5,000,000. The Debentures bear an annual interest rate of 5%, increasing to 18% in the event of default, and will mature on November 28, 2025.

The initial closing of $1,500,000 occurred on November 29, 2024. The second closing of $2,000,000 will occur upon the filing of an initial registration statement with the U.S. Securities and Exchange Commission (the "SEC") registering the resale of the Class A ordinary shares upon conversion of the Debentures. The third closing of $1,500,000 will occur upon the effectiveness of the registration statement.

During the first 50 calendar days after issuance, the Debentures may be converted into Class A ordinary shares at a fixed price of $4.756 per share. After 50 days, the investor may in its discretion elect to convert the Debentures at the lower of $4.756 or 93% of the lowest daily VWAP during the five consecutive trading days preceding the conversion date, subject to a Floor Price of $0.78954. If the daily VWAP of the Company's shares falls below the Floor Price for five consecutive trading days within a seven-day period, or if a registration default occurs (each, an "Amortization Event"), the Company will be subject to monthly payments of up to $1,000,000 of the principal amount plus a 10% premium and accrued interest beginning on the 10th trading day after the Amortization Event.

The Company has also agreed to pay a 1% commitment fee upon the effectiveness of the registration statement, payable in cash or Class A ordinary shares equal to the commitment fee divided by the closing bid price of the Class A ordinary shares as of the date of the Securities Purchase Agreement, and a one-time due diligence and structuring fee of $25,000, which was paid at the initial closing.

The Debentures were issued as a private placement under an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D thereunder. The Company also entered into a registration rights agreement, agreeing to file an initial registration statement with the SEC within 21 days to register for resale the Class A ordinary shares underlying the Debentures.

The full terms of the Securities Purchase Agreement, the Debentures, and the Registration Rights Agreement are described in the Company's report on Form 6-K filed with the SEC.

About Eshallgo Inc

Eshallgo Inc is one of the leading office solution providers in China with a global vision. We specialize in two distinct market sectors: office supply sale and leasing, and after-sale maintenance & repair. We have created an extensive geographical presence, which expands throughout 20 provinces in China. Our mission is to become an office integrator and service provider, offer competitive overall office solutions and services, expand our service market beyond office equipment, and continue to create maximum value for customers. For more information, visit the Company's website at http://ir.eshallgo.com/.

Forward-Looking Statements

All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the SEC.

For more information, please contact:

Investor Relations:

Sherry Zheng

Weitian Group LLC

Phone: 718-213-7386

Email: [email protected]

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SOURCE Eshallgo Inc