EcoBlu Products Inc., maker of wood products treated with environmentally friendly protective coatings, received a financial boost from a Singapore-based investment company.
The Vista, Calif.-based supplier entered an investment agreement with Manhattan Resources Limited this week. A $5 million payment was part of the deal.
"This strategic financing has helped us recapitalize our balance sheet while providing us with the growth capital we need," said EcoBlu President and CEO Steve Conboy.
EcoBlu's over-the-counter stock -- ECOB.OB -- was trading for $0.09 per share early Thursday.
On Feb. 15, 2010, the company received payment of $5 million for 81 million of its common shares pursuant to the Investment Agreement. After Manhattan receives shareholder approvals, an additional $5 million in the form of a revolving credit line will be made available for use by the company. The revolving credit line will bear interest at 6% per annum. Concurrently with the creation of the revolving line of credit, Manhattan will receive 50 million five-year warrants to purchase common shares of the company at an exercise price per share of $0.10.
Prior to entering into these agreements, Manhattan acquired approximately $1.2 million of outstanding convertible notes and associated warrants issued by the company in early 2010. Steve Conboy, CEO of ECOB, stated, "We are pleased to announce that the notes totaling approximately $1.2 million will be paid in full with the proceeds from the initial investment. In addition, the Series A through G Warrants issued March 26, 2010, for a total of 26.25 million shares have already been cancelled.
"We are pleased with the opportunity to invest in Ecoblu and share in the belief that their technology will set the standard for the industry," said Soo Ching Ho, CEO of Manhattan Resources Limited. "We are confident of the growth prospects of the company amid the recovery of the U.S. economy."