Stocks & Investing
Stocks and Investing
Stocks and Investing
Wed, October 20, 2010
Tue, October 19, 2010 
POST FALLS, Idaho--([ BUSINESS WIRE ])--JayHawk Energy, Inc. (OTCBB:JYHW) (aJayHawka or the aCompanya) has entered into definitive agreements with institutional investors for the sale of an aggregate of $500,000 in 10% secured convertible debentures. The secured convertible debentures have a term of two years, are convertible into the Companya™s common stock at an initial conversion price of $0.18, and are initially convertible into an aggregate of 2,777,778 shares of common stock. The secured convertible debentures are secured by a lien on the Companya™s assets, including its properties in North Dakota but not including certain assets of the Company in Kansas. In addition, the Company shall issue to the institutional investors an aggregate of 1,805,556 warrants to purchase common stock with an initial exercise price of $0.45 and a term of exercise of 42 months. Additional disclosure on the terms of this transaction is available in the companya™s Form 8-K that was today filed with the Securities and Exchange Commission.
The convertible debenture financing will provide the Company with operating capital and flexibility for future development opportunities. Additionally, the Company is assessing acquisition opportunities to complement its existing properties. In Kansas, the Company is evaluating potential opportunities to add oil production to its current shallow gas portfolio. In North Dakota, JayHawk continues to assess its Madison production and development options. The Company has also begun the preparatory work on battery consolidation in order to reduce its ongoing operating expenses. The Company is also analyzing new opportunities for it to expand its drilling portfolio.
This current financing is a follow-on financing through the same group of investors with which the Company previously raised capital beginning December 2009. Cynergy Advisors, LLC acted as advisor to JayHawk relative to this financing. Cynergy provides investment banking services to public and private energy-focused and energy-related businesses.
About JayHawk Energy, Inc.
JayHawk Energy, Inc. is a managed risk, oil and gas exploration/exploitation, development and production company with activities focused on two major projects in the Cherokee Basin, Kansas and the Williston Basin, North Dakota. For more information please visit [ www.jayhawkenergy.com ].
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SECa™s guidelines strictly prohibit us from including in filings with the U.S. SEC. Examples of such disclosures would be statements regarding aprobable,a apossible,a or arecoverablea reserves among others.
Management believes JayHawka™s plan of operations will bring additional value to the shareholders of the Company. However, there is no guarantee that any of JayHawka™s projects will increase the value of its shares of common stock, or that JayHawk will acquire any additional rights to explore and/or operate any other such projects, or that in the event that it does acquire such rights, that these actions will be successful or increase the value of JayHawka™s common stock.
This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. There are many factors that could cause our expectations and beliefs about our plans to acquire additional exploration or production properties, our plans to drill or our drilling results to fail to materialize, including, but not necessarily limited to: competition for new acquisitions, availability of capital, unfavorable geologic conditions, the complexity of coal bed methane exploration and production, and prevailing prices for natural gas and general regional economic conditions. JayHawk Energy, Inc. assumes no obligation to update the information contained in this press release.
