ROK Resources Inc. has closed on its previously announced acquisition (the "Acquisition") of certain operated producing oil and gas assets (the "Asset") in Southern Saskatchewan (along with associated land leases, a facility, and related assets) pursuant to the Company's March 17, 2021 press release. The Acquisition has an effective date of April 1, 2021.
ROK has completed the remainder of the financing pursuant to a previously announced private placement for an additional $410,000 (the "Subsequent Placement") for an aggregate amount of $2,200,000 (the "Private Placement"), whereby a total of 11,000,000 units (each a "Unit") of the Company were issued at a price of $0.20 per Unit. Each Unit consists of one Class B common share in the capital of the Company (each a "Common Share") and one half of one Common Share purchase warrant (each full warrant, a "Warrant"). Each Warrant will be exercisable for one Common Share at an exercise price of $0.35 per Warrant for a period of 2 years. The Common Shares to be issued pursuant to this Private Placement will be subject to a four-month trading restriction, expiring on October 2, 2021. After the previously announced acquisitions and the final closing of the Private Placement, the Company will have 74,471,576 total Common Shares issued and outstanding. Proceeds from the Private Placement were used to satisfy the purchase price for the previously announced acquisitions as well as general corporate purposes. No commissions were paid to brokers or finders for the Subsequent Placement.
Further, the Company is pleased to announce that it has completed its first closing of $2,600,000 consisting of senior secured notes of the Company ("Notes"), with each Note consisting of a principal amount of $1,000 and with interest payable thereon at a rate of 14% per annum and with a term of three years from the date of issuance thereof (the "Note Financing" and, along with the Private Placement, the "Offering"), but with the ability of the Company to fully repay the Notes at no penalty after two years from the date of issuance, or the Noteholders can demand repayment after two years from the date of issuance. Payments of interest only will be made during the first year of the term of the Notes and blended payments of interest and principal will be made during the second and third year of the term of the Notes. The Notes are secured by all of the assets of the Company and are senior to all other indebtedness of the Company.
In addition, 500 Common Share purchase warrants (each a "Note Warrant") were issued to participants in the Note Financing for each $1,000 principal amount of Notes purchased, with each Note Warrant being exercisable for one Common Share at an exercise price of $0.35 per Note Warrant for a period of 2 years. The Note Financing is non-brokered. The Notes and Note Warrants were offered pursuant to the accredited investor and family, friends and business associates exemptions of National Instrument 45-106 - Prospectus Exemptions.
A second closing of the Note Financing is expected to occur no later than July 2021 to complete the remainder of the financing.