By Devika Patel
Knoxville, Tenn., April 4 - True North Energy Corp. and its subsidiary ICF Energy Corp. settled a $425,000 second tranche of a private placement of secured term notes and warrants on March 31, according to an 8-K filed Friday with the Securities and Exchange Commission. The deal priced on Sept. 18 for $3.75 million, which the companies received in the first tranche. The notes settled on Sept. 19.
The Sept. 19 and March 31 advances are now represented by March 31 amended and restated new notes, the company said in the filing, with a principal amount of $3,931,882.84. All other terms of the notes remain unchanged.
Valens U.S. SPV I, LLC and Valens Offshore SPV II, Corp. bought the notes, with Valens U.S. acting as agent.
In Friday's filing, the company said that as of March 31, the outstanding principal amount of the notes was $3,506,883. On March 31, according to the filing, the investors made a $425,000 additional advance.
Of the new notes, $1,964,195.80 was issued to Valens Offshore and $1,967,687.04 to Valens U.S.
The new notes mature on Sept. 18, 2010 and bear interest at 13% per year. Interest will be payable monthly.
Amortizing principal payments are also due monthly beginning on Oct. 1. For each month, the payment will be the greater of $100,000 and a certain percent of the net revenue relating to all oil and gas properties of ICF. That percent will be 60% before Sept. 18, 2008 and 80% thereafter.
In the first tranche, the investors received warrants for 1,953,126 common shares of True North and 1,000 common shares of ICF.
The True North warrants are exercisable at $0.48 for five years.
If True North closes a contemplated acquisition of Wyoming oil and gas assets from Angel LLC; CN Energy LLC; Swanson Energy Co., LLC; Fuel Exploration, LLC; MHBR Energy LLC; and Rocky Mountain Rig LLC, the exercise price of the True North warrants will be lowered to the price per share of the stock issued to the sellers in that deal.
The ICF warrants will only become exercisable if that property acquisition is not completed by Jan. 18, 2008. They have an exercise price of $0.01.
In connection with the placement, the investors received an aggregate 5% overriding royalty interest in the oil and gas properties of ICF. That will reduce to an aggregate 3% overriding royalty interest when the notes are paid in full.
True North used $2.26 million of the proceeds for an acquisition of oil and gas assets from Prime Natural Resources, Inc. True North also issued 1,928,375 shares to Prime on Sept. 19 as the stock component of that deal.
Another $252,384 of the proceeds was used to pay off secured promissory notes with a total principal amount of $250,000.
True North is a Houston-based oil and gas company.
| Issuer: | True North Energy Corp. and subsidiary ICF Energy Corp.
|
| Issue: | Secured term notes, warrants
|
| Amount: | $3,931,882.84
|
| Maturity: | Sept. 18, 2010
|
| Coupon: | 13%
|
| Price: | Par
|
| Yield: | 13%
|
| Warrants: | For 1,953,126 True North shares
|
| Warrant expiration: | Five years
|
| Warrant strike price: | $0.48
|
| Agent: | Valens U.S. SPV I, LLC
|
| Investors: | Valens U.S. SPV I, LLC (for $1,967,687.04), Valens Offshore SPV II, Corp. (for $1,964,195.80)
|
| Pricing date: | Sept. 18
|
| Settlement date: | Sept. 19 (for $3.75 million), March 31 (for $425,000)
|
| Stock symbol: | OTCBB: TNEN
|
| Stock price: | $0.47 at close Sept. 18
|
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