ORLANDO, Fla., July 20, 2007 (PRIME NEWSWIRE) -- RedChip Visibility, a division of RedChip Companies, Inc., announced that it has issued a first quarter 2007 research update on Earth Biofuels, Inc. (OTCBB:EBOF)
Clay Mahaffey, CFA, RedChip Research Analyst, wrote in the report:
First quarter revenue was 60 percent below projections due to a lack of biodiesel sales. Gross margins declined significantly in Q406, bringing FY06 margins down 75 percent from the estimate. Q107 sales apparently are mostly LNG, which delivered 4.5 percent margins vs the assumed 30 percent. SG&A expenses soared due to share based compensation, to both employees and non-employees. The financials for most of 2006 and Q107 had to be restated, with the result that FY06 and Q1 EPS declined $0.02 and $0.04 respectively. These adjustments have been made in the reported financials herein.
The Company reported that in January 2007 it had received a proposal from Nexxus One Financial, Ltd. to provide a $150 million bond issue in exchange for securities in the Company. The price decline and alleged default on convertible notes would seem to negate the viability of this financing. We are placing our rating under review and suspending our price pending court action on the Chapter 7 petition filed by the Investor Group.
To receive a complimentary copy of the RedChip Visibility EBOF research update, please visit: http://www.redchip.com/visibility/about.asp?page=requestEBOF_Q12007&from=pressEBOF72007
About RedChip Companies, Inc.
RedChip Companies is an international small-cap research and financial public relations firm with offices in Beijing and Orlando and affiliates in New York and San Diego. RedChip delivers measurable results for its clients through its extensive international market expertise as well as its comprehensive platform of products: RedChip Research(tm), Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences held throughout the United States, and RedChip Radio(tm). To learn more about RedChip's products and services please visit: http://www.redchip.com/visibility/services.asp.
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DISCLOSURES
EBOF paid RedChip Visibility $36,000 for the RedChip Visibility Research Program, which includes this report. RedChip Visibility, a division of RedChip Companies, Inc., and the Aurelius Consulting Group Inc., in a joint marketing agreement, have been contracted by Earth Biofuels, Inc. to increase investor awareness of EBOF to the small-cap equity community. These services may include investor conferences and digital and print distribution of EBOF investor related materials. In the purview of Section 17(b) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that the Aurelius Consulting Group is an investor relations firm hired by the Company and receives a monthly fee of $7,500 and 11,000 shares of Rule 144 stock per quarter for Aurelius services.