Three-year agreement with Lincoln Park finances working capital needs
By Devika Patel
Knoxville, Tenn., May 23 - Legend Oil and Gas, Ltd. arranged a $10.2 million stock purchase agreement with Lincoln Park Capital Fund, LLC on May 18, according to an 8-K filed Wednesday with the Securities and Exchange Commission.
The company will sell the common shares to Lincoln Park over three years. The purchase price of the shares will be based on the prevailing market prices immediately preceding the sales, without any fixed discount. Specifically, the price will be equal to the lesser of the average three closing trading prices of the stock during the 12 trading days preceding the purchase notice or the lowest intra-day trading price of the stock on the date of the purchase notice.
Upon signing the agreements, Lincoln Park initially purchased 192,308 common shares at $0.26 per share for $50,000. After the company files the registration statement, Lincoln Park will purchase another $50,000 of shares at a price based off of market prices with no discount. After the SEC has declared the registration statement effective, Lincoln Park will purchase an additional $100,000 of stock. From then on, the company may sell up to an additional $10 million of shares to Lincoln Park over three years.
For each purchase, the company may sell up to 250,000 shares to Lincoln Park as often as once every three business days, or up to $1 million of stock per notice.
Lincoln Park received 723,592 shares as an initial commitment fee and will receive up to 1,072,183 shares on a pro rata basis as it purchases additional shares.
Proceeds will be used for working capital needs, including bank debt repayment.
"This agreement should help the company to refocus on production efforts, and helps to give us the flexibility to evaluate acquisition opportunities in our core areas while at the same time assisting us in reducing our bank debt," Legend president Marshall Diamond-Goldberg said in a press release. "The agreement contains no fixed discount rate to the company's shares and gives Legend significant control as to the timing and price at which it sells shares under the agreement. This financing supports the company in executing its business objectives while growing shareholder value."
The oil and gas exploration, development and production company is based in Seattle.
| Issuer: | Legend Oil and Gas, Ltd.
|
| Issue: | Stock purchase agreement
|
| Amount: | $10.2 million
|
| Tenor: | Three years
|
| Price: | The lesser of the average three closing trading prices of the stock during the 12 trading days preceding to the purchase notice or the lowest intra-day trading price of the stock on the date of the purchase notice
|
| Warrants: | No
|
| Investor: | Lincoln Park Capital Fund, LLC
|
| Fees: | 1,795,775 shares
|
| Pricing date: | May 18
|
| Stock symbol: | OTCBB: LOGL
|
| Stock price: | $0.26 at close May 17
|
| Market capitalization: | $13.58 million
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