EnerJex plans add-on to 10% series A cumulative redeemable preferreds

By Stephanie N. Rotondo

Phoenix, May 7 – EnerJex Resources Inc. will offer additional 10% series A cumulative redeemable perpetual preferred stock, according to a prospectus filed with the Securities and Exchange Commission on Thursday.

The preferreds will be offered on a firm commitment basis via Northland Securities Inc. and Euro Pacific Capital Inc.

Dividends are payable monthly. Should the company fail to pay the dividends in full for six consecutive or non-consecutive periods, the dividend will increase to 12% and another 1% for each further missed payment, up to 15%.

The penalty rate will also go into effect if the preferreds are delisted.

The securities currently trade on the New York Stock Exchange under the ticker symbol “ENRJPR.”

The preferreds become redeemable on or after June 16, 2017 at par plus accrued dividends. The company can also redeem the issue upon a change of control. If that occurs prior to the redemption date, the shares will be redeemed at a premium on a sliding scale basis.

Proceeds will be used to pay down a portion of the company’s credit facility, to fund an escrow account for the purpose of paying dividends on the preferreds through Nov. 1 and for general working capital purposes.

EnerJex is a San Antonio-based oil and gas company.

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