9% debentures due in 2013 and convert to stock at C$0.10 per share
By Devika Patel
Knoxville, Tenn., Oct. 19 - CMQ Resources Inc. said it will conduct a private placement of secured convertible debentures to raise about C$1.5 million. The deal was negotiated with Matco Investments Ltd.
The debentures will be sold on a commercially reasonable basis and have a 9% coupon, mature on Oct. 15, 2013 and convert to common stock at an initial conversion price of C$0.10 per share, which is a 42.86% premium to the Oct. 18 closing share price of C$0.07.
Matco currently holds 49.99% of CMQ's outstanding common shares and would hold 63% of the outstanding shares if the debenture's full principal were to be converted.
On Dec. 19, 2010, CMQ negotiated a funding and forbearance agreement with Matco. In that agreement, Matco agreed that it would forbear from enforcing its debtor rights against the company until Oct. 19.
In connection with the offering, CMQ and Matco have entered into an agreement to extend the forbearance to May 30, 2012, conditional on settlement occurring prior to or on Nov. 30.
Proceeds will be used for working capital.
CMQ is a gold exploration company based in Calgary, Alta.
| Issuer: | CMQ Resources Inc.
|
| Issue: | Secured convertible debentures
|
| Amount: | C$1.5 million (approximate)
|
| Maturity: | Oct. 15, 2013
|
| Coupon: | 9%
|
| Conversion price: | C$0.10
|
| Conversion premium: | 42.86%
|
| Warrants: | No
|
| Investor: | Matco Investments Ltd.
|
| Pricing date: | Oct. 19
|
| Settlement date: | Nov. 30
|
| Stock symbol: | TSX Venture: NV
|
| Stock price: | C$0.07 at close Oct. 19
|
| Market capitalization: | C$3.09 million
|
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