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Lender: EarthFirst owes $8.5M

Laurus Master Funds sues in federal court to collect on defaulted loans.

By SCOTT BARANCIK
Published November 27, 2007

EarthFirst Technologies is in trouble with a key lender.

Tampa-based EarthFirst, an environmentally focused processor of scrap tires and other waste products, obtained several loans from Laurus Master Funds in early 2005. By March, however, EarthFirst had defaulted, and last week, Laurus sued in federal court, claiming it is owed more than $8.5-million.

The loans were secured by virtually all of EarthFirst's assets, including a 25-acre property in Haines City.

"Laurus has gone out of its way" to work with EarthFirst, Laurus senior managing director Lloyd W. Davis wrote in a June e-mail to the borrower. "In return, the company has done nothing to address its problems or cure its defaults."

EarthFirst's stock, which trades on the over-the-counter bulletin board, closed Monday at 3 cents per share. President John Stanton could not be reached for comment Monday afternoon.

Like many penny-stock companies, EarthFirst has struggled to find a profitable niche. Founded in 1997 as Toups Technology Licensing, it boasted a vehicle that could clear culverts of debris, a nonfossil combustible gas and a low-heat process for turning scrap tires into marketable steel, carbon and oil. It has formed an arm to help turn palm, soy and other oils into biodiesel fuel and, in 2004, acquired a bankrupt electrical contracting company.

Success has been elusive. EarthFirst, which had 253 full-time employees as of Dec. 31, lost $19.9-million last year on revenues of $45.4-million, almost of all of which came from its electrical contracting work in the construction field.

A 2006 plan to be acquired by Cast-Crete, a Tampa manufacturer of parking-space bumpers, has not materialized. The company's solid-waste disposal unit has yet to see any revenues, despite that an estimated 2-billion or more scrap tires are currently rotting in landfills.

Back in 2005, Laurus, which is based in the Cayman Islands, was more optimistic. Two of the three loans it made to EarthFirst were convertible to company stock, and the loan package included warrants to purchase more shares.

Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.

[Last modified November 26, 2007, 23:20:06]