Mr. Richard Yurko and Kasten Resources Inc.

December 21, 2016 08:00 ET

Acquisition of Point Loma's Convertible Debenture from Madalena Energy Inc. by Mr. Richard Yurko and Kasten Resources Inc.

CALGARY, ALBERTA--(Marketwired - Dec. 21, 2016) - Mr. Richard Yurko ("Mr. Yurko") and Kasten Resources Inc. ("Kasten", and together with Mr. Yurko, the "Purchasers") announce they each intend to file an early warning report, advising of their purchase of a $3,000,000 senior subordinate secured convertible debenture (the "Convertible Debenture") of Point Loma Resources Ltd. (TSX VENTURE:PLX) ("Point Loma"), from Madalena Energy Inc., for an aggregate purchase price of $700,000 (the "Acquisition"). The Convertible Debenture was acquired in a private purchase and sale under the accredited investor prospectus exemption.

Pursuant to the terms of the Acquisition: (i) the principal amount of the Convertible Debenture was reduced to $2,500,000; (ii) the Convertible Debenture was re-issued as two debentures in the principal amount of $1,250,000 (the "Principal Amount") to each of the Purchasers (the "New Convertible Debentures"); and (iii) the New Convertible Debentures will rank pari passu to Point Loma's 7% junior subordinate secured convertible debentures issued on June 28, 2016 (the "Junior Convertible Debentures").

The New Convertible Debentures have a maturity date of June 28, 2021 and bear interest at a rate of 3% per annum on the Principal Amount. An origination fee equal to 3% of the Principal Amount ("Origination Fee") is also payable by Point Loma upon maturity of the New Convertible Debentures. The Principal Amount, along with interest accrued thereon, and the Origination Fee may be converted into common shares of Point Loma at a price of $0.50 per share.

Prior to the issuance of the New Convertible Debentures, Mr. Yurko owned 1,008,350 Point Loma common shares, representing approximately 4.64% of the issued and outstanding common shares of Point Loma. If Mr. Yurko elected to convert the full amount of the New Convertible Debenture into common shares of Point Loma at maturity, Mr. Yurko would hold an aggregate of 3,981,535 Point Loma common shares, representing approximately 16.10% of the issued and outstanding common shares of the Point Loma on a fully diluted basis, based on the number of common shares of Point Loma outstanding as at the date of this news release.

Kasten is wholly-owned by Mr. Al Kroontje ("Mr. Kroontje"). Mr. Kroontje owns 450,000 Point Loma common shares and a Junior Convertible Debenture in the principal amount of $325,000. If Mr. Kroontje elected to convert the full amount of the Junior Convertible Debenture into common shares of Point Loma at maturity, Mr. Kroontje would hold an aggregate of 1,437,106 common shares of Point Loma, representing approximately 6.32% of the issued and outstanding common shares of Point Loma on a fully diluted basis, based on the number of common shares of Point Loma outstanding as at the date of this news release.

If Kasten and Mr. Kroontje elected to convert the full amount of the New Convertible Debenture and the Junior Convertible Debenture into common shares of Point Loma at maturity, Kasten and Mr. Kroontje would control an aggregate of 4,410,291 common shares of Point Loma, representing approximately 17.15% of the issued and outstanding common shares of Point Loma on a fully diluted basis, based on the number of common shares of Point Loma as at the date of this news release.

The New Convertible Debentures were acquired by the Purchasers for investment purposes. Each of the Purchasers may, from time to time, acquire additional securities of Point Loma, dispose of some or all of the securities it holds, or might hold, or continue to hold its current position.

A copy of the early warning report filed by each of the Purchasers will be available on Point Loma's profile on the System for Electronic Document Analysis and Retrieval website at www.sedar.com.

A copy of the early warning report may be obtained by contacting:

Terry Meek

President and CEO of Point Loma

(403) 705-5051 ext. 101

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Terry Meek
    President and CEO of Point Loma
    (403) 705-5051 ext. 101