Sky Petroleum Inc. (OTCPK:SKPI) announced that it has entered into a note purchase agreement to issue a 2015 series A convertible note for gross proceeds of $0.5 million on May 5, 2015. The note is convertible into shares of common stock at a conversion price of $0.08 per share. The notes will mature on May 5, 2017.

The company expected to receive $1,500,000 in the transaction. The note carries a fixed interest rate of 3% per annum payable on the maturity date in cash or at the option of the company, in-kind in shares of common stock of the company. The notes were issued pursuant to exemption provided under Regulation D to an accredited investor outside the United States.

The default interest rate will be 6% per annum.