New York, Aug. 4 - Delek Resources, Inc. disclosed details of its previously announced $2 million financing with Cornell Capital Partners, LP, saying it sold secured convertible debentures.
The debentures pay interest at 10%, mature after 36 months and are convertible at 95% of the lowest volume weighted average price of the company's stock during the 30 trading days immediately preceding conversion, with a floor of $0.216.
Delek can redeem the debentures at any time. If its stock is trading above the conversion price on the redemption date, Delek will pay a 20% premium. For each $100,000 redeemed, the company will issue warrants for 25,000 shares at an exercise price of 120% of the bid price.
Of the total $2 million, $1 million will be funded on closing and $1 million two days before a registration statement is filed with the Securities and Exchange Commission.
Proceeds will be used for drilling at the Williston Basin as part of a joint venture project.
Delek, based in Houston, is an oil and natural gas exploration company.
| Issuer: | Delek Resources, Inc.
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| Issue: | Secured convertible debentures
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| Amount: | $2 million
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| Maturity: | Three years
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| Coupon: | 10%
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| Conversion price: | 95% of the lowest volume weighted average price of the company's stock during the 30 trading days immediately preceding conversion, floor of $0.216
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| Call: | At any time, 20% premium payable if stock is trading above conversion price
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| Agent: | Non-brokered
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| Investor: | Cornell Capital Partners, LP
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| Pricing date: | Aug. 1
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| Stock symbol: | OTC Bulletin Board: DLKR
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| Stock price: | $0.24 at close Aug. 1
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