CALGARY, May 1 /CNW/ - Kroes Energy Inc. ("Kroes" or the "Corporation")
(TSX Venture: KRS) announced today that it has entered into an agency
agreement with Octagon Capital Corporation ("Octagon") in connection with a
financing to be completed by way of Short Form Offering Document in accordance
with TSX Venture Exchange policies (the "Offering").
The Offering will consist of a minimum of $500,000 and a maximum of
$2,000,000 in units of Kroes ("Units") at a price of $0.80 per Unit. Each Unit
consists of one (1) common share ("Common Share") of the Corporation, one (1)
flow-through common share ("Flow-Through Share") of the Corporation, and one
half of one (1/2) non-transferable Common Share purchase warrant of the
Corporation ("Warrant"). Each whole Warrant entitles the holder thereof to
purchase one additional Common Share of the Corporation at a price of $0.50
for a period of 18 months from the initial closing of the Offering. The
allocation of the price of the securities comprising each Unit is $0.36 for
each Common Share, $0.44 for each Flow-Through Share and nil for each 1/2
Warrant.
The Warrants are subject to an acceleration clause whereby at any point
after 90 days from the closing of this Offering, if the Corporation's Common
Share price exceeds $0.75 for a period of 10 consecutive trading days, the
Corporation may elect to issue a news release causing the Warrants to be
exercised within 30 days of the date of the press release, provided that the
Common Share price remains at $0.75 or more through the notice period, and
failing exercise within the 30 day notice period the Warrants will
automatically expire. At the closing of the Offering (the "Closing"), the
securities comprising the Units will automatically separate.
The proceeds of this financing will be used to fund the Corporation's
share of exploration and development expenses pursuant to a joint venture
agreement the Corporation has entered into with a private Alberta company.
Octagon will receive a cash commission equal to 9% of the gross proceeds
received by the Issuer from sales pursuant to the Offering. The Agent will
also receive non-transferable compensation options to purchase 34,722 Agent's
Units during the period expiring 18 months from the Closing, plus options to
purchase that number of Agent's Units equal to 10% of the number of Units sold
pursuant to the Offering, all at the price of $0.72 per Agent's Unit. Each
Agent's Unit is composed of two (2) Common Shares and one half of one (1/2)
Warrant. In addition, the Corporation has agreed to pay the Agent a corporate
finance fee of $15,000, which will be paid at the Closing.
The filing of the Short Form Offering Document with the TSX Venture
Exchange will occur concurrently with the issuance of this press release.
Kroes Energy is a junior oil and gas producer and explorer participating
in the Lelyaki Oilfield redevelopment project in Ukraine, one of Eastern
Europe's fastest growing economies. Kroes has a strong management team with
extensive international experience. Shares trade on the TSX Venture Exchange
under the symbol KRS.
FORWARD-LOOKING STATEMENTS
This disclosure contains certain forward-looking estimates that involve
substantial known and unknown risks and uncertainties, certain of which are
beyond Kroes' control, including: the impact of general economic conditions in
the areas in which the Company operates, industry conditions, changes in laws
and regulations including the adoption of new environmental laws and
regulations and changes in how they are interpreted and enforced, increased
competition, the lack of availability of qualified personnel or management,
fluctuations in commodity prices, foreign exchange or interest rates, stock
market volatility and obtaining required approvals of regulatory authorities.
In addition, there are risks and uncertainties associated with oil and gas
operations; therefore, Kroes' actual results, performance or achievement could
differ materially from those expressed in, or implied by, these forward-
looking estimates and, accordingly, no assurances can be given that any of the
events anticipated by the forward-looking estimates will transpire or occur,
or if any of them do so, what benefits, including the amounts of proceeds,
that Kroes will derive from that.
To receive company news releases via e-mail, please advise
ana(at)chfir.com and specify "Kroes Press Releases" in the subject line.
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