Echo Energy Completes Private Placement
Echo Energy Canada Inc. has completed a private placement of 6,000,000 common shares, at an issue price of $0.25 per common share, and 1,428,571 flow-through common shares, at an issue price of $0.35 per flow-through common share, for gross proceeds of $2 million. The flow-through common shares constitute flow-through shares (as defined under the Income Tax Act (Canada)) and all proceeds from the sale and issue of such securities will be used for eligible expenditures in connection with the further exploration of Echo Energy's natural gas reserves. Echo intends to use the balance of the proceeds to finance the development of its natural gas reserves.
5,000,000 common shares and 857,143 flow-through common shares were issued to Salvatore Fuda, the chairman of the Corporation, with the balance issued to private investors. The shares to Mr. Fuda were issued pursuant to an order of Mr. Justice Morawetz of the Ontario Superior Court of Justice in connection with the ongoing litigation between, among others, Mr. Fuda and the Corporation. The transaction was approved by a majority of the board of the directors, with Messrs. Salvatore Fuda, Joseph Fuda and Oliver Nepomuceno voting against or abstaining.
All shares issued under the private placement are subject to resale restrictions under applicable securities laws and the policies of the TSX Venture Exchange, which shall expire July 6, 2008.