Bohai Pharmaceuticals misses payments on $8.47 million of convertibles

Company skips its April 5, Oct. 5 payments on notes sold in placement

By Devika Patel

Knoxville, Tenn., Oct. 18 - Bohai Pharmaceuticals Group, Inc. missed payments on its $8.47 million of convertible notes, according to an 8-K filed Friday with the Securities and Exchange Commission. The notes were issued with warrants in a $12 million private placement on Jan. 5, 2010. Euro Pacific Capital, Inc. was the agent.

The company failed to make payments on the note, which were due on April 5 for $846,450 and Oct. 5 for $761,805.

On Oct. 9, to fulfill a portion of the late payments, the company transferred $100,000 to a U.S. escrow account designated by Euro Pacific and expects to repay about $300,000 by the end of October and the remaining balance of about $446,450 by the end of November. As soon as practical, the company expects to repay the interest of the April payment and the full amount of the October payment.

Based in Yantai, China, Bohai produces, manufactures and distributes herbal pharmaceuticals based on traditional Chinese medicine.

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