Dragon International converts $1.66 million in convertible notes

By Sheri Kasprzak

New York, Feb. 17 - Dragon International Group Corp. said it has converted $1,663,070 in convertible notes and reduced the strike price on warrants held by the investors who converted the securities.

The company issued 18,478,565 shares under the conversion at $0.09 each.

The exercise price of the warrants originally issued with the notes was reduced to $0.15 from $0.30 and will expire in three years.

For the conversion, the investors received additional warrants for 5,642,300 shares, exercisable under the same terms as the original warrants.

Two holders elected not to convert their holdings, and the strike price for the 150,000 warrants held by them will remain $0.30.

The notes were first issued as part of a unit offering on May 9, 2005. The company sold $1,927,400 in convertible notes and warrants to 36 investors.

The 8% notes mature in two years and had originally been convertible at $0.55 each. The conversion price was lowered in January to encourage conversion.

Based in Ningbo, China, Dragon is a holding company for a paper products concern.

On Friday, the company's stock gained a penny to close at $0.16 (OTCBB: DRGG).

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