Company: CNEY
Filing Date: 2025-10-29
Form Type: F-1/A
Source: 0001477932-25-007791
Chunk: 87

Company: CN ENERGY GROUP. INC.
Filing Date: 2025-10-29
Form: F-1/A
Chunk 87
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230,000 for seeking financing through the issuance and sale of a Convertible Promissory Note to Streeterville Capital, LLC, including associated transaction costs, and approximately $170,000 for technology development services, among other expenditures.

Research and Development Expenses

Research and development expenses include costs directly attributable to the conduct of research and development projects, including raw materials, equipment parts, salaries, and other employee benefits. Research and development expenses decreased by $43,819, or 4.2%, to $1.0 million for the fiscal year ended September 30, 2023, from $1.0 million in fiscal year 2022. The Company maintained a similar level of research and development expenses in fiscal years 2023 and 2022.

Interest expenses

Interest expenses increased by $0.5 million, or 353.2%, to $0.7 million in fiscal year 2023 from $0.2 million for the same period of last year. The increase was mainly attributable to an increase in outstanding loan principal of $1.1 million, issuance of convertible notes of $3.23 million in December 2022 with an interest rate of 7% per annum and an increase in average interest rates on loans from 4.9% in fiscal 2022 to 5.0% in 2023.

Government Subsidy Income

The operating entities receive various government subsidies from time to time, such as the “VAT refund” and “Special Fund Subsidy.” Their government subsidies were all granted by local governments in recognition of their achievements. We cannot predict the likelihood or amount of any future subsidies.

Our subsidiary Khingan Forasen and its branch office, Tahe Biopower Plant, are entitled to obtain a 70% VAT refund as they meet the requirements of national comprehensive utilization of resources program. For more details, please see “Regulations-PRC Regulations Relating to Taxation-Tax Incentives.” For the fiscal years ended September 30, 2023 and 2022, a VAT refund in the amount of $0.3 million and $0.3 million was recorded in government subsidy income, respectively.

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In January 2014, April 2014, and December 2019, the operating entities received government subsidies of approximately $840,000, $140,000, and $140,000 for equipment of energy projects, respectively. These subsidies were one-time grants, and we recognize the income over the useful