By Sheri Kasprzak
Atlanta, April 6 - FBO Air Inc. released detail on its previously announced private placement for up to $4.5 million.
The company sold units each consisting of $25,000 in principal of a secured promissory note, 10 shares of series A convertible preferred stock and warrants for 50,000 common shares at $75,000 each.
At closing, the company had sold 42.65295 units of $1,066,325 in principal from the secured notes, 414 preferred shares and warrants for 2,132,651 shares for proceeds of $3,198,971. The company expects to sell a total of 60 units after a second closing occurs by May 15.
The notes bear interest at 10% annually and mature March 31, 2008.
The preferreds are convertible into common shares at $0.30 each. The preferreds will automatically convert into common shares if the company sells its equity securities for at least $5 million or if its stock trades 2.5 times above the conversion price for 20 consecutive trading days before the date of mandatory conversion.
The warrants are exercisable at $0.60 each through March 30, 2010.
Laidlaw & Co. Ltd. was the non-exclusive placement agent in the deal.
Based in Scottsdale, Ariz., FBO acquires and operates fixed-base operations, the primary providers of services to private and general aviation aircraft operators. The proceeds from the deal will be used for two acquisitions and for working capital.
| Issuer: | FBO Air Inc.
|
| Issue: | Units of $25,000 in principal of secured promissory note; 10 shares of series A convertible preferred stock; warrants for 50,000 common shares
|
| Amount: | $4.5 million (maximum)
|
| Units: | Up to 60
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| Price: | $75,000
|
| Investors: | Laidlaw & Co. Ltd.
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| Settlement date: | March 31 (initial closing)
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| Stock price: | $1.75 at close March 31
|
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| Notes
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| Issue: | $25,000 in principal for each unit
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| Maturity: | March 31, 2008
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| Coupon: | 10%
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| Price: | Par
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| Yield: | 10%
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|
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| Preferreds
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| Conversion price: | $0.30
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| Call: | Preferreds will automatically convert if the company sells its equity securities for at least $5 million or if its stock trades 2.5 times above the conversion price for 20 consecutive trading days before the date of mandatory conversion
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| Warrants
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| Warrants: | For 50,000 common shares for each unit
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| Warrant expiration: | March 30, 2010
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| Warrant strike price: | $0.60
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