Offer sells 12% unsecured subordinated notes with 22 million warrants
By Devika Patel
Knoxville, Tenn., May 10 – Lilis Energy Inc. completed a $1.3 million tranche of a private placement of 12% unsecured subordinated convertible notes on May 4, according to an 8-K filed Tuesday with the Securities and Exchange Commission. The deal raised $3.75 million on Dec. 29 and $500,000 on March 18.
The first-tranche notes are due June 30, 2016, and the remaining notes are due on April 1, 2017. The notes convert to common stock at $0.50 per share. The notes may be prepaid at 103 in the first 120 days and at 105 after 120 days.
Investors also received warrants for about 22 million common shares. Each three-year warrant is exercisable at $0.25, a 38.89% premium to $0.18, the Dec. 28 closing share price. The conversion price is a 177.78% premium to that price.
Investors included chief executive officer and director Abraham Mirman, who invested $500,000, director Ronald D. Ormand, who invested $1 million, and shareholder Pierre Caland, who invested $300,000 through Wallington Investment Holdings, Ltd.
Proceeds will be used for the $1 million refundable deposit the company paid to Brushy Resources, Inc., a $1 million payment to Brushy’s senior lender, Independent Bank, as part of the company’s planned merger with Brushy, up to $1.3 million of interest payments and for working capital and accounts payable.
The oil and gas company is based in Denver.
| Issuer: | Lilis Energy Inc.
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| Issue: | Unsecured subordinated convertible notes
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| Amount: | $5.55 million
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| Maturity: | June 30, 2016 (for $3.75 million), April 1, 2017 (for $1.8 million)
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| Coupon: | 12%
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| Conversion price: | $0.50
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| Call: | At 103 in the first 120 days, at 105 after 120 days
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| Warrants: | For about 22 million shares
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| Warrant expiration: | Three years
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| Warrant strike price: | $0.25
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| Investors: | Abraham Mirman (for $500,000), Ronald D. Ormand (for $1 million) and Wallington Investment Holdings, Ltd. (for $300,000)
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| Pricing date: | Dec. 29 (for $3.75 million), March 18 (for $500,000), May 6 (for $1.3 million)
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| Stock symbol: | Nasdaq: LLEX
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| Stock price: | $0.18 at close Dec. 28
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| Market capitalization: | $4.59 million
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