American Power (OTC:AMPW) Raises $500K from PIPE

American Power (OTC:AMPW) announced today the closing of a non-brokered private placement financing resulting in gross proceeds of $500,000. The net proceeds of the financing will be used for the exploration and development of the Pace Coal Project located in Judith Basin County, Montana, as well as for general corporate purposes. As I write, shares of American Power were up slightly at $1.47 per share on volume of more than 300,000 shares. The company has a market cap of $134 million and a 52-week range between $0.61 and $2.18 per share.

To date, American Power has procured a total of $2.0 million from the same institutional investor, of which $1.4 million were received under the framework of a financing agreement. Under the terms of the Agreement, the Company may, from time to time, request an advance from Black Sands Holdings, Inc. up to $1,000,000, in integral multiples of $100,000 per request for operating expenses, acquisitions, working capital and general corporate activities.

Following receipt of any Advance, the Company shall sell and issue Black Sands units, each unit consisting of one share of common stock and a warrant to purchase one share of common stock at the Unit Price. The “Unit Price” shall mean a price equal to 75% of the volume weighted average of the closing price of the common stock for the ten business days preceding the date of any notice requesting an Advance, as quoted on Nasdaq or such other quotation system as agreed upon by the Company and Black Sands. Each warrant issued as components to Units shall represent the right of Black Sands to purchase one share of common stock at an exercise price equal to 150% of the Unit Price. All warrants to be issued as components to the Units will have a three (3) year term from the date of issuance.

The latter financing agreement allows American Power to request advances for up to $10 million through a 2.5-year stock issuance agreement, which also includes a warrant component that could provide additional funding to the Company over the coming years.

"I am delighted to say that we are well financed to explore and develop the Pace Coal project. Over the last 12 months, we have raised $2 million and still can call up a further $8.6 million under the financing agreement signed in September last year," commented Al Valencia, CEO of American Power. "We continue to work hard towards the prospecting permit application to initiate drilling operations during the first half of this year and this funding is will be used towards achieving that goal," added Mr. Valencia.

American Power is a member of the Montana Mining Association, and holds approximately 29,000 acres in Judith Basin County, Montana.

For further information visit the Company's website at www.americanpowerco.com.

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