Company: CNEY
Filing Date: 2025-10-29
Form Type: F-1/A
Source: 0001477932-25-007791
Chunk: 117

Company: CN ENERGY GROUP. INC.
Filing Date: 2025-10-29
Form: F-1/A
Chunk 117
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 the factory workshop, the auxiliary buildings, and the pipe networks, and their total capital expenditure on the new facility was approximately RMB64 million (approximately $9.8 million).

However, from August 2023 to the date of this prospectus, the construction of our new facility in Manzhouli City, Inner Mongolia, was suspended and sold. Our initial strategy in launching the project was to join the ecosystem in the region formed by a large number of log processing factories that were able to provide our operating entities with enough raw material for their needs. However, the COVID-19 pandemic has drastically altered the wood market and policy landscape, leading to the widespread closure of local factories in that region. As a result, the operating entities have been unable to secure the necessary quantities of raw materials for their production, a situation we anticipate will persist as a long-term challenge for businesses in the area. Given the operating entities’ inability to achieve the original objectives, they have opted to discontinue further investment in the construction.

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The operating entities have currently completed the construction of a new facility in Lishui, dedicated to the R&D, processing, marketing, and sale of activated carbon for water purification. The operating entities lease about 27,152 square feet of office and production space in Lishui for such new facility pursuant to a lease agreement they entered into with Zhejiang Forasen Energy Technology Co., Ltd. on October 8, 2021, with a lease term of five years from October 8, 2021 to October 7, 2026 (unless otherwise terminated by either party) and an annual rent of RMB454,042.8 (approximately $69,741), payable semi-annually. The operating entities are required to notify the landlord at least three months in advance if they would like to renew the lease agreement. The planned investment for the renovation of factory building and construction of product line is RMB30 Million (approximately $4.61 million). The factory has an inspection and quality control laboratory, and a high-efficiency charcoal separation processing production line, which is expected to run 24 hours per day and 300 days per year with a targeted annual output capacity of 36,000 tons of activated carbon. By September 2023, the operating entities had completed the renovation of factory building and installation of most of the equipment. As of the date of this prospectus, the construction has been finalized, and the Lishui facility is now in operation.

Zhejiang CN