Business context and reporting period
Important identity mismatch: The request names Drilling Tools International Corp., but the supplied Form 10-K is for ROC Energy Acquisition Corp. This summary reflects the filing provided, not Drilling Tools International.
ROC Energy was a newly formed blank-check company seeking a business combination, with a stated focus on U.S. non-operated upstream oil and gas. The filing covers September 2, 2021 (inception) through December 31, 2021; the company had not begun operating business activities. Its IPO closed in December 2021.
Financial results and position
| Metric | Reported amount |
|---|---|
| Operating revenue | None; the company had not generated operating revenue. |
| General and administrative expenses | $252,254 |
| Interest income | $16,874 |
| Net loss | $235,380; basic and diluted loss per share was $0.03. |
| Cash used in operating activities | $13,000 |
| Cash and investments in trust at year-end | $209,086,874, including $209,081,449 in U.S. Treasury securities. |
| Cash outside trust | $1,361,137. |
| Total liabilities | $249,996; no working-capital loans were outstanding at year-end. |
| Debt | No funded debt reported at year-end; the filing describes possible future sponsor or insider loans. |
Margins are not meaningful because ROC Energy had no operating revenue. The filing provides no prior comparable operating period, so year-over-year changes cannot be assessed. Public shares were classified as temporary equity at a $209.07 million redemption value.
Outlook, risks and unusual items
- The company had until December 6, 2022 to complete a business combination, with up to two three-month extensions to June 6, 2023, subject to sponsor deposits into the trust.
- Management and the auditor stated that the deadline, potential mandatory liquidation, and liquidity needs raised substantial doubt about the company’s ability to continue as a going concern. Failure to complete a transaction would require liquidation and redemption of public shares, subject to creditor claims and other limitations.
- Management reported $1.36 million outside the trust for search and operating costs and cautioned that funds might not be sufficient through liquidation. The filing offers no operating-company revenue, earnings, or cash-flow guidance.
- Key risks include failure to find or complete a suitable transaction on time, redemption reducing available funds, competition for targets, conflicts of interest and competing fiduciary duties, and creditor claims against trust assets. The sponsor’s indemnity may not be collectible; the filing says its assets were believed to consist only of company securities.
- The filing cites potential effects from COVID-19, financial-market volatility, inflation, interest rates, oil prices, supply-chain disruption, and the Ukraine conflict. It reports no pending or contemplated litigation known to management.
- Transaction-related costs and incentives include a $13,000 monthly administrative-services fee to a sponsor affiliate and a deferred business-combination marketing fee equal to 3.5% of IPO gross proceeds, with a possible additional 1.0% fee if the advisor introduced the target.
Most important facts to verify
- Confirm the filing issuer: the supplied document is ROC Energy Acquisition Corp.’s 10-K, not Drilling Tools International Corp.’s.
- Verify the trust balance, the amount available outside the trust, and any subsequent movements or sponsor extension deposits.
- Check whether a business combination was completed by the stated deadline or an extension, and how any redemptions affected available cash.
- Review creditor claims, the terms and collectibility of the sponsor indemnity, and any additional financing or transaction fees.
- Reconcile key offering figures across the filing: the IPO included 20.7 million public units at $10 each, while the trust was reported at approximately $209.1 million.