By Sheri Kasprzak
New York, June 8 - Earth Biofuels, Inc. wrapped a $10 million private placement of senior convertible notes.
The 8% notes, purchased by a group of institutional investors, are due September 2006.
The notes are not convertible until maturity, at which time the maturity may be extended to December 2006.
The notes are convertible at the greater of $1.00 each or 75% of the market price on the initial maturity date.
The investors received warrants for 1.5 million shares, exercisable at $2.93 each for five years.
Cowen & Co. was the placement agent.
Proceeds will be used for the construction of or acquisition of biodiesel and ethanol facilities. The remainder will be used for general corporate purposes.
On May 31, the company settled a similar offering for $5 million, selling 8% notes to Evolution Master Fund, Ltd.
Earth Biofuels, based in Dallas, develops alternative fuels, including biodiesel.
| Issuer: | Earth Biofuels, Inc.
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| Issue: | Senior convertible notes
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| Amount: | $10 million
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| Maturity: | September 2006
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| Coupon: | 8%
|
| Price: | Par
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| Yield: | 8%
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| Conversion price: | The greater of $1.00 or 75% of the market price on the initial maturity date
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| Warrants: | For 1.5 million shares
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| Warrant expiration: | Five years
|
| Warrant strike price: | $2.93
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| Placement agent: | Cowen & Co.
|
| Settlement date: | June 8
|
| Stock symbol: | OTCBB: EBOF
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| Stock price: | $2.49 at close June 8
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