November 30, 2006 The Company issued three one-year senior secured convertible notes totaling $1.65 million. The notes, together with interest that accrues at the rate of 13% per annum, are convertible into shares of the Company’s Common Stock at a conversion price of $0.695 per share, which is a 23.6% premium above fair market value of the Common Stock on the trading date preceding the closing date of November 24, 2006. Upon maturity, any unconverted outstanding principal and interest is due and payable in cash. The lenders received warrants to purchase 2,374,101 shares of the Company’s Common Stock at $0.57 per share, which was slightly above the fair market value of the common stock on the trading date preceding the closing date. Palladium Capital Advisors LLC acted as the sole placement agent and was paid 8% of the note’s principal in cash and in warrants.
Lori Jones, CEO, said, “We are pleased that the progress we have made in expanding our oil and gas division has allowed us to obtain this latest round of financing at above market rates. These funds will be used to further expand and diversify our investments in oil and natural gas properties. We are especially pleased with the progress of our investment in Washita County, Oklahoma, and believe that it was instrumental in enabling us to attract high-quality investors for this transaction.”
For more information, click here