By Sheri Kasprzak
New York, Aug. 2 - Canary Resources Inc. said it has completed a $7.25 million private placement of class A convertible preferred stock.
The company sold 18,125,000 preferreds at $0.40 each to institutional investors, including a major European institution.
The preferreds do not pay dividends and are convertible into common shares on a one-for-one basis.
The investors also received warrants for 9,062,500 shares, exercisable at $1.00 each for four years. The warrants must be exercised if the company's stock trades above $2.00.
Proceeds will be used for drilling and development in the Eastern Forest City basin in Kansas and Missouri. The remainder will be used for working capital.
The company has 30,892,700 outstanding common shares. Following the conversion of the class A convertible preferred shares, the company will have 49,017,700 shares outstanding.
Based in Toronto, Canary is a coal bed methane exploration company.
| Issuer: | Canary Resources Inc.
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| Issue: | Class A convertible preferred stock
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| Amount: | $7.25 million
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| Shares: | 18,125,000
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| Price: | $0.40
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| Conversion ratio: | One common share per preferred share
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| Warrants: | For 9,062,500 shares
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| Warrant expiration: | Four years
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| Warrant strike price: | $1.00
|
| Settlement date: | Aug. 2
|
| Stock price: | $0.20 at close Aug. 2
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