ROCKLIN, Calif., Dec. 11, 2003 (PRIMEZONE) -- Peabodys Coffee, Inc. (OTCBB:PBDY), a retailer and marketer of the USDA certified organic brand Black Rhino Coffee(tm), announced today that it has entered into a financing agreement with a California-based investment fund. Pursuant to the agreement, the company has issued convertible debt and warrants in a private placement in exchange for an initial investment of $250,000, with provision for an additional $2.5 million if certain terms and condition are met. Peabodys intends to use the proceeds from the financing for general working capital purposes and to prepay certain outstanding liabilities owed to its existing secured debenture holders (the "Debenture Holders").
In addition, on December 4, 2003, Peabodys entered into a Redemption Agreement with the Debenture Holders. Pursuant to the Redemption Agreement, Peabodys has made an initial payment against the outstanding Secured Convertible Debentures issued to the Debenture Holders and has agreed to further payments each month thereafter, until the debentures are redeemed in full. During such time as Peabodys has met its prepayment obligations, the Debenture Holders agreed to refrain from converting their debentures into shares of Peabodys common stock.
The securities sold in this private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. As part of the transaction, the Company has agreed to file a resale registration statement with the Securities and Exchange Commission within 120 days for purposes of registering the resale of the shares of common stock underlying the convertible debt and warrants issued in the financing.
This notice is issued pursuant to Rule 135c under the Securities Act of 1933 and does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. These securities have been sold and this announcement appears as a matter of record only. Any offering of the securities under the resale registration statement will only be by means of a prospectus.
This news release may include comments that do not refer strictly to historical results or actions and may be deemed to be forward-looking within the meaning of the safe harbor provisions of the U.S. federal securities laws. These include, among others things, statements about investment amounts received by the company, the company's intention to file a registration statement, and the use of the proceeds. Forward-looking statements are subject to risks and uncertainties that may cause the company's results to differ materially from expectations. These risks include the ability to satisfy those terms and conditions on which further investment is conditioned and to satisfy the remaining prepayment obligations to the Debenture Holders, and other such risks as the company may identify and discuss from time to time, including those risks disclosed in the company's periodic reports filed with the Securities and Exchange Commission. Accordingly, there is no certainty that the company's plans will be achieved.