SOURCE: Skystar Bio-Pharmaceutical Company

March 07, 2007 13:58 ET

Skystar Bio-Pharmaceutical Raises $4.075 Million in Private Placement

Funds From Private Placement to Be Used for Growth Capital

XI'AN, CHINA -- (MARKET WIRE) -- March 7, 2007 -- Skystar Bio-Pharmaceutical Company (OTCBB: SKBI) ("Skystar"), a leading bio-pharmaceutical company in China, today announced that it raised gross proceeds of $4.075 million in a private transaction with several institutional and accredited investors. Skystar sold $4.075 million in aggregate principal amount of 8% convertible debentures and warrants to purchase 4,075,000 shares of the common stock of Skystar, with an initial exercise price of $1.20 per share. Pacific Ridge Capital, LLC acted as the placement agent for this transaction.

The Debentures bear interest at 8% per year and are convertible into shares of Skystar's common stock at an original conversion price of $1.00 per share. Starting with the third month after the closing (February 28, 2007), Skystar shall pay on a monthly basis, 4.77% of the principal of the Debenture ("Principal Repayment Amount"), and all accrued interest. At Skystar's option, payment shall be in cash or, subject to satisfaction of certain conditions, in shares of common stock. Net proceeds to Skystar after expenses of the transaction were approximately $3.74 million and will be used for growth capital including expansion of Skystar's current product line.

Skystar Bio-Pharmaceutical Company's Chairman and CEO, Mr. Weibing Lu, commented, "With the completion of this private placement, Skystar is ready to execute its strategy of sharply expanding its sales and marketing efforts. With the Company largely free of long-term debt, we are able to use the proceeds from this latest transaction almost entirely for financing future growth on an already strong financial foundation."

The private placement was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").

The Debentures, Warrants and the shares of Skystar's common stock underlying the Debentures and Warrants have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of the securities in any jurisdiction in which such offering would be unlawful.

If you would like to be added to Skystar's investor email list, please contact Zack Noory with Nexus Investor Relations at

About Skystar Bio-Pharmaceutical

Skystar Bio-Pharmaceutical Company is a China-based producer and distributor of vaccines, microorganisms and 100% organic herbal additives to cure and prevent disease in poultry, livestock, birds and pets. The company's product line consists of more than 70 state-of-the-art products with over 50 additional products in the developmental stage. One of the prominent products currently in the development stage is a feed additive and vaccine for Avian Influenza. Skystar has formed strategic sales distribution networks in 27 provinces and regions throughout China. Skystar recently completed construction of new state-of-the-art Bio-Pharmaceutical facilities covering an area of almost eight acres. The new facilities meet or exceed all Good Manufacturing Practice (GMP) Certification Standards and have received GMP Certification from the Chinese government. For additional information, please visit

Forward-looking statement: Except for the historical information, the matters discussed in this news release may contain forward-looking statements, including, but not limited to, factors relating to future sales. These forward-looking statements may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to, uncertainties in product demand, the impact of competitive products and pricing, changing economic conditions around the world, release and sales of new products and other risk factors detailed in the company's most recent annual report and other filings with the Securities and Exchange Commission.

Contact Information

    Scott Cramer
    Director - Investor Relations
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    Zack Noory
    Managing Partner
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