By Sheri Kasprzak
New York, May 31 - Earth Biofuels, Inc. concluded a $5 million private placement of senior convertible notes.
Evolution Master Fund, Ltd. purchased the 8% notes, which are due in 90 days.
The notes are convertible into common shares at the greater of $1.00 or 75% of the market price on the initial maturity date.
The notes may not be converted after August 2006 and, at that time, the maturity may be extended to November 2006 at the holder's option.
The investor also received warrants for 750,000 shares, exercisable at $3.84 each for five years.
Cowen & Co. was the placement agent.
Proceeds will be used for the acquisition of an ethanol production plant, two biodiesel production facilities and other general corporate purposes.
Earth Biofuels, based in Dallas, develops alternative fuels, including biodiesel.
| Issuer: | Earth Biofuels, Inc.
|
| Issue: | Senior convertible notes
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| Amount: | $5 million
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| Maturity: | 90 days
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Conversion price: | The greater of $1.00 or 75% of the market price on the initial maturity date
|
| Warrants: | For 750,000 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $3.84
|
| Placement agent: | Cowen & Co.
|
| Investor: | Evolution Master Fund, Ltd.
|
| Settlement date: | May 26
|
| Stock symbol: | OTCBB: EBOF
|
| Stock price: | $3.20 at close May 26
|
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