NOTES PAYABLE	6 Months Ended
NOTES PAYABLE	Jun. 30, 2012
NOTES PAYABLE [Abstract]
NOTES PAYABLE	NOTE 3 - NOTES PAYABLE In February and June 2012, respectively, we borrowed an additional $1,300,000 and $400,000 under our $25 million lending facility with Maximilian Investors LLC of New York. We received net cash proceeds of $1,649,000 after payment of a 3% broker fee in accordance with the terms of the lending facility. During the six months ended June 30, 2012, we granted warrants to purchase 750,000 shares of common stock to a broker associated with our $25 million lending facility. The warrants have an exercise price of $0.50 per share and a term of five years. The warrants were valued at $37,500 using the Black-Scholes option pricing model with the following assumptions: stock price on the measurement date of $0.05; option term of five years; expected volatility of 497%; and a discount rate of 1.13%. The value of the options is included in deferred financing costs and will be amortized over the life of the loan. During the six months ended June 30, 2012, holders of current notes payable in the amount of $620,000 agreed to take 6,480,000 shares of common stock to pay off the loans. The common stock was valued at $1,878,100 based on the market value on the date of issuance. As a result of this transaction, we recognized a loss on conversion of debt to equity in the amount of $1,258,100.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Rock Energy Resources, Inc. 10-Q/A