Nation Energy may head to private placement market to fund exploration

By Sheri Kasprzak

New York, March 6 - Nation Energy Inc. said it intends to conduct a private placement this year in an effort to continue its exploration activities.

The company said in its latest form 10-QSB filed with the Securities and Exchange Commission that its exploration operations will be contingent upon its raising additional funds via a private placement or shareholder related party loans.

"Our ability to continue exploration and, if warranted, development of our properties will be dependent upon our ability to raise significant additional financing," said the report. "If we are unable to obtain such financing, a portion or all of our interest in our properties may be lost to our exploration partners or debtors.

"We have limited financial resources and limited cash flow from operations and we are dependent for funds on the shareholder related party loans described above and our ability to sell our common shares, primarily on a private placement basis."

The company has authorized the issuance of 50 million common shares.

However, that authorization comes with consequences for existing shareholders.

"In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interest in our company will be diluted and investors may suffer dilution in their net book value per share, depending on the private which such securities are sold," the report said. "If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control."

According to the company's latest earnings report, Nation Energy had a net income of $27,139 for the quarter ended Dec. 31, 2005, compared with a net income of $31,604 for the same quarter of 2004.

However, since inception, the company has incurred losses of $6,186,342.

"The company's ability to continue as a going concern is contingent upon being able to secure financing and attain profitable operations," the earnings report said.

Based in Vancouver, B.C., Nation is an oil and natural gas exploration company.

On Feb. 21, its last trade, Nation's stock closed at $0.32 (OTCBB: NEGYE).

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