The Company is required to make mandatory prepayments on each of September 30th and December 31st of 2005 equal to 10% of the principal amount of the senior secured notes if the weighted average share price is not more than $5.00 per share at such time. The notes are secured by all of the assets of Cadence. In addition to the interest on the notes, the investors received, in the aggregate, warrants to purchase 765,000 shares of common stock, exercisable at $4 per share, expiring in three years.
Howard Crosby, President of Cadence, stated: "This private placement will allow us to continue the rapid development of our natural gas and oil assets, building our cash flow and reserves to take full advantage of the strong market for energy assets."
Neither the notes nor the warrants have been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or an applicable exemption from those registration requirements.
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