Apollo Resources pays amounts due under defaulted convertibles

By Sheri Kasprzak

New York, May 10 - Apollo Resources International, Inc. said it has repaid all amounts due on defaulted convertible notes issued to eight investors in July 2005.

On April 17, the company paid $259,733 due to three remaining noteholders for principal and interest payments, the company said in an 8-K filed Thursday with the Securities and Exchange Commission.

"Of the eight original holders of the convertible notes, five have been paid in full," said the 8-K. "The company and the remaining three noteholders have entered into active settlement negotiations. Of the total remaining aggregate principal balance of $259,733 due to the three remaining noteholders, principal and interest payments were last made on April 17, 2007.

"As such, the non-payment of principal and interest previously due and payable constitutes a default under each of the respective remaining convertible notes; however, as a result of such April 17, 2007 payment, all principal and interest has been brought current pursuant to the terms of the convertible notes."

The notes were issued July 6, 2005 in principal of $3 million. The 8% notes are convertible into common shares at $0.25 each and are self-liquidating with the principal and interest payments due beginning the six months after closing of each note until the notes are paid off.

The investors include Cranshire Capital LP; Crescent International, Ltd.; Iroquois Master Fund Ltd.; Omicront Master Trust; Rockmore Investment Master Fund; Portside Growth and Opportunity Fund; RHP Master Fund, Ltd.; Smithfield Fiduciary LLC; SRG Capital LLC; and Sunrise Equity Partners, LP.

Apollo Resources, based in Dallas, is an oil and natural gas exploration company.

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