The terms of the initial $5 million two-year convertible debenture provide for a conversion price of the lesser of $2.00 per share of PetroSun common stock or 80% of the three lowest volume weighted average prices during the prior twenty trading days prior to holders election to convert. This debenture provides for an interest rate of 7 3/4%.
The second transaction consists of a four-year 4 3/4% convertible debenture and warrants of $11 million that provide a conversion price of the lesser of $3.00 per share of PetroSun common stock or 80% of the three lowest volume weighted average prices during the twenty trading days prior to the holders election to convert.
"PetroSun has been successful to date in securing exploration and development projects, oilfield services, alternative energy technologies and personnel," said Rayfield Wright, President of PetroSun. "Golden Gate's investment is a strong vote of confidence in PetroSun's ability to expand our core business and supports our strategic drive to become a global leader in the development of both traditional and renewable energy resources. This financing transaction will allow us to implement an aggressive campaign to successfully utilize our assets in the marketplace."
PetroSun's current operations are concentrated in the Ark-La-Tex region with plans to expand into New Mexico, Arizona, Utah and Australia in 2006. PetroSun provides a comprehensive array of products and services to the oil industry. Algae BioFuels, a wholly owned subsidiary of PetroSun, is an emerging producer of biodiesel derived from the cultivation of algae. The Company's cutting edge technologies, combined with a proven ability to apply them effectively and safely within a disciplined ROI framework, creates long term value for PetroSun shareholders and partners. PetroSun is headquartered in Phoenix, Arizona.
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