By Sheri Kasprzak
Atlanta, June 30 - Ruby Mining Co. said it has completed a private placement of convertible notes for $2.5 million.
The notes, sold to The NIR Group, mature on June 27, 2008 and are convertible into common shares at the lesser of $0.15 or the average lowest intraday trading prices during the 20 trading days before conversion, discounted by 50%.
The notes bear interest at 8% annually. The interest rate drops to 0% for any month the company's stock trades 125% above the initial market price - or $0.1625 - for each trading day in that month.
Ruby may prepay the notes as long as the company's stock is trading at or below $0.13 per share. The company may prepay the notes at 125% of the outstanding principal and interest within 30 days of issuance, at 155% of the principal and interest between 31 and 60 days of issuance and 150% of principal and interest after 60 days.
The investors received warrants for 9,615,385 shares, exercisable at $0.25 each for five years.
The proceeds will be received in three tranches. The company received $850,000 at closing and will receive $800,000 once a registration statement is filed, and the remaining $850,000 will be received once that registration statement is declared effective.
Laidlaw & Co. was the placement agent.
The proceeds will be used to pay current accounts payable and for continuing operations, acquisitions of capital equipment and working capital.
Ruby Mining, based in Dallas, Ga., recovers cargo from 16th, 17th and 18th century shipwrecks.
| Issuer: | Ruby Mining Co.
|
| Issue: | Convertible notes
|
| Amount: | $2.5 million
|
| Maturity: | June 27, 2008
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Conversion price: | The lesser of $0.15 or the average lowest intraday trading prices during the 20 trading days before conversion, discounted by 50%
|
| Call: | May be prepaid at 125% within 30 days of issuance; 155% between 31 and 60 days of issuance and at 150% after 60 days of issuance as long as company's stock does not trade above $0.13
|
| Warrants: | For 9,615,385 shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.25
|
| Placement agent: | Laidlaw & Co.
|
| Investor: | The NIR Group
|
| Settlement date: | June 27
|
| Stock price: | $0.12 at close June 29
|
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