ECO2 plans $5 million private placement of convertibles due 2009, settles $550,000 tranche

By Devika Patel

Knoxville, Tenn., Aug. 28 - ECO2 Plastics, Inc. announced plans to issue between $3.5 million and $5 million of convertible notes via a private placement.

The notes will mature on March 31, 2009.

ECO2 also said it completed a $550,000 tranche on Aug. 22. The company expects the balance of the deal will settle on Sept. 15.

Proceeds will be used to purchase new equipment for the company's proprietary CO2 cleansing equipment and other critical spare parts and equipment, reduce trade payables and fund continuing operations.

The company said it undertook the financing primarily due to higher-than-expected equipment and installation costs and working capital requirements related to the expansion of production capacity in its Riverbank, Calif., processing plant.

This financing will also help fund additional current and future projects and also support the ECO2's ability to meet its ongoing cash and working capital needs.

ECO2, based in San Francisco, has developed a system that cleans post-consumer plastics, without the use of water, at cost savings versus traditional methods within a closed-loop system.

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