Storm Cat will use the net proceeds from the financing to further fund its exploration and drilling programs on its Powder River Basin properties where two drilling rigs are currently active, the Elk Valley project in British Columbia, onshore Cook Inlet Alaska, and its shallow gas project in Saskatchewan, Canada. With the proceeds of today's private placement, combined with Storm Cat's previously announced CDN $10.5 million Canadian private placement that closed on September 28, 2005, management believes that it has now has the necessary capital to enact its business plan of using its expertise in drilling and completing unconventional natural gas prospects across its leasehold.
The Corporation also entered into a registration rights agreement with the investors requiring the Corporation to file with the SEC a Registration Statement covering the common shares issued, including any common shares issued upon exercise of the warrants, by December 31, 2005. If the Registration Statement is not filed by December 31, 2005 or is not declared effective by the SEC by April 20, 2006, then the Corporation will be liable to make pro rata payments to each investor in an amount equal to 1.0% of the aggregate amount invested by such investor for each 30-day period or pro rata for any portion thereof following such deadlines.
None of the securities distributed under the financing may be traded on the TSX Venture Exchange or otherwise sold in Canada or to or for the benefit of a resident of Canada before February 26, 2006 unless permitted under Canadian securities legislation and the rules of the TSX Venture Exchange.
The securities offered in the private placement have not been registered under the United States Securities Act of 1933 or any U.S. state securities laws, and unless so registered may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction subject to, the registration requirements of the Securities Act of 1933 and applicable state securities laws.
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