UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 23, 2005
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COLLEGE OAK INVESTMENTS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 333-116890 30-0226902
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
20022 Creek Farm
San Antonio, Texas 78259
(Address of Principal Executive Offices, including Zip Code)
(210) 418-5177
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On November 25, 2005, College Oak Investments, Inc. ("we" or the
"Company") entered into a joint venture with Rex Energy Operating Corp., a
privately held company (collectively, "Rex"), for the purpose of acquiring a
working interest in certain leasehold interests located in the Illinois Basin,
Indiana. Our joint venture will be conducted through a limited liability company
formed under the laws of the State of Delaware and named New Albany-Indiana, LLC
(the "LLC"). Pursuant to a Limited Liability Company Agreement (the "LLC
Agreement"), we have a 50% economic/voting interest in the LLC and Rex has a 50%
economic/voting interest in the LLC. Rex Energy Wabash, LLC, an affiliate of
Rex, is the Managing Member of the LLC and will manage the day to day operations
of the LLC.
On November 15, 2005, the LLC entered into a Purchase and Sale Agreement
(the "Aurora Agreement") with Aurora Energy Ltd., a Nevada corporation
("Aurora"), pursuant to which the LLC has agreed to purchase from Aurora an
undivided 48.75% working interest (40.7% net revenue interest) in (i) certain
oil, gas and mineral leases covering acreage in several counties in Indiana (the
"Leases") and (ii) all of Aurora's rights under a certain Farmout and
Participation Agreement with a third party ("Farmout Agreement"). In addition,
at the closing of the transaction (the "Closing"), the LLC would be granted an
option from Aurora (the "Option"), exercisable by the LLC for a period of
eighteen (18) months thereafter, to acquire a fifty percent (50%) working
interest in any and all acreage leased or acquired by Aurora or its affiliates
within certain other counties located in Indiana, at a fixed price per acre.
The purchase price for the acquisition of the working interests in the
Leases and the Farmout Agreement, together with the grant of the Option is
$10,500,000, subject to certain adjustments. Of such amount, $500,000 has
already been deposited by Rex with Aurora as an advance (of which, we have
agreed to reimburse Rex $250,000). An additional deposit of $3,000,000 is due
from the LLC by December 1, 2005. Upon the Closing, which is scheduled to occur
by February 1, 2006, the deposits will be applied by Aurora to reduce the
purchase price. If the Closing does not occur as a result of the LLC's failure
to satisfy certain closing conditions, including the LLC's inability to obtain
sufficient financing to complete the acquisition, then Aurora shall be entitled
to terminate the Aurora Agreement and retain the deposits and all accrued
interest thereon. Under our LLC Agreement, as 50% Members, both the Company and
Rex have responsibility to contribute equal amounts of capital to the LLC in
order for the LLC to meet its obligations under the Aurora Agreement. In
addition, Rex and the Company have agreed to fund the LLC equally with respect
to the costs and expenses of the LLC drilling ten (10) wells (the "Pilot
Program") on the properties acquired from Aurora. It is anticipated that the
LLC's costs of the Pilot Program will approximate $4,500,000. As more fully set
forth below, we have raised sufficient capital in a private offering to enable
us to fund 50% of the deposit required to be made by the LLC to Aurora by
December 1, 2005. However, there can be no assurances that the LLC will receive
all required capital contributions from Rex or the Company in order to make all
necessary payments to Aurora as provided under the Aurora Agreement.
Item 3.02. Unregistered Sales of Equity Securities.
On November 23, 2005, College Oak Investments, Inc. ("we" or the
"Company") sold $375,000 of its units (the "Units") as part of its previously
announced private placement to accredited investors (the "Offering"). Such sale
was in addition to the $2,000,000 of Units sold by the Company on November 15,
2005 and reported in our Report on Form 8-K filed with the Commission on
November 16, 2005. Having raised sufficient funds to meet our short-term needs,
we terminated the Offering on November 23, 2005.
Each Unit consists of (i) a $50,000 principal amount 10% convertible
promissory note (the "Note"), and (ii) such number of shares (the "Shares") of
the Company's common stock (the "Common Stock"), equal to the product of (i)(1)
the aggregate principal amount of each Note purchased, multiplied by (2) twenty
(20%), and (ii) two (2). Each Note matures on the date eighteen (18) months from
the date of issuance and bears interest at the rate of 10% per annum. The holder
of a Note may elect to receive interest on its Note in cash or in shares of
Common Stock valued at $0.50 per share. At any time prior to maturity, the
holder may convert the principal and accrued but unpaid interest on its Note
into such number of shares of Common Stock (the "Conversion Shares") equal to
the outstanding principal amount plus accrued but unpaid interest on the Note
divided by $0.50.
The Company received total gross proceeds in the Offering of $2,375,000.
Purchasers of the Units in the Offering received in the aggregate 950,000 Shares
and, upon conversion of the Notes, will receive up to an additional 5,462,500
Conversion Shares (assuming that the holders elect to receive shares of Common
Stock in lieu of cash interest through maturity).
In connection with the Offering, the Company paid a placement agent (the
"Agent") (i) a $237,500 commission (ten percent (10%) of the Offering gross
proceeds), (ii) a $23,750 non-accountable expense allowance (one percent (1%) of
the Offering gross proceeds) and (iii) a five year warrant (the "Agent Warrant")
to purchase 475,000 shares of Common Stock (the "Warrant Shares"), at an
exercise of $0.50 per share.
With respect to (i) the Shares, (ii) the Conversion Shares (including
those which may be issued as interest payments) and (iii) the Warrant Shares
(collectively, the "Registrable Securities"), we have granted the holders
thereof, "piggy-back" registration rights on our next registration statement
(other than on Form S-4 or S-8) filed with Securities Exchange Commission. If no
such filing is made, then at any time after November 15, 2006, the holders of
Registrable Securities shall have the right to demand that we file no later than
forty-five (45) days following such demand, a registration statement on Form S-3
covering the resale of their Registrable Securities.
All Offering securities were issued pursuant to Regulation D and Rule 4(2)
of the Securities Act of 1933, as amended.
As set forth above, $1,750,000 of the net proceeds from the Offering will
be used to fund our initial capital contribution to the LLC, for the purposes of
(i) enabling the LLC to make its required deposit to Aurora by December 1, 2005
and (ii) reimbursing Rex 50% of the $500,000 it previously advanced to Aurora.
The remainder of the proceeds will be used for general corporate and working
capital purposes.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
COLLEGE OAK INVESTMENTS, INC.
DATE: November 28, 2005 By: /s/ Carey G. Birmingham
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Name: Carey G. Birmingham
Title: President