By Sheri Kasprzak
New York, May 9 - Linux Gold Corp. settled a private placement of $2 million in discounted secured convertible notes for proceeds of $1,825,000.
The zero-coupon notes, priced at 91, a 5% discount, are due Nov. 8, 2007 and are convertible into common stock at C$0.40 each.
The initial $1.5 million was funded at closing and the rest will be funded once a registration statement is filed with the Securities and Exchange Commission.
The investors will also receive warrants for 5 million shares, exercisable for five years at C$0.50 each and warrants for 2.5 million shares, exercisable at C$0.52 each through May 8, 2016 or a year after the registration statement is declared effective.
Casimir Capital LP was the placement agent.
The proceeds will be used for exploration on the company's Granite Mountain claims as well as for working capital.
Vancouver, B.C.-based Linux is a gold exploration company.
| Issuer: | Linux Gold Corp.
|
| Issue: | Secured convertible notes
|
| Amount: | $2 million
|
| Proceeds: | $1,825,000
|
| Maturity: | Nov. 8, 2007
|
| Coupon: | 0%
|
| Price: | 91
|
| Conversion price: | C$0.40
|
| Warrants: | For 7.5 million shares
|
| Warrant expiration: | Five years for 5 million shares; May 8, 2016 for 2.5 million shares
|
| Warrant strike price: | C$0.50 for 5 million shares; C$0.52 for 2.5 million shares
|
| Placement agent: | Casimir Capital LP
|
| Settlement date: | May 9
|
| Stock symbol: | OTCBB: LNXGF
|
| Stock price: | $0.43 at close May 8
|
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