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.
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