Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Item 2.03 is incorporated by reference into this
Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On July 29, 2022, the Company entered into a Convertible Note Purchase Agreement
with Lubar Opportunities Fund I ("LOFI"), of which Mr. David Lubar, a
Company director, manages in his capacity as President and CEO of Lubar & Co
and Hallador Alternative Assets Fund, LLC ("HAAF"), of which Mr. David C.
Hardie, a Company director, manages in his capacity as Managing Member of
Hallador Management, LLC whereby the Company issued a convertible promissory
note to LOFI in the amount of $5.0 million (the "Note") on July 29, 2022, will
issue a convertible promissory note to LOFI in the amount of $3.0 million on
August 8, 2022, and a convertible promissory note to HAAF in the amount of $1.0
million on August 8, 2022. The Convertible Note Purchase Agreement
contains customary representations and warranties and representation rights and
provisions under which the Company will file with the Securities and Exchange
Commission a registration statement covering the resale of shares of the
Company's Common Stock that may be issued upon conversion of any of the
foregoing promissory notes. Further, the Company and the purchasers of the Notes
will agree to indemnify one another in the event certain liabilities arise in
connection with sale of Company Common Stock pursuant to the registration
statement. The foregoing description of the Convertible Note Purchase Agreement
is qualified in its entirety by reference to the full extent of such document, a
copy of which is attached to this Report as Exhibit 10.1 and is incorporated
herein by reference.
The funds received from the Note will be used to provide additional working
capital to the Company. The Note will mature on December 29, 2028 and will
accrue interest at 8% per annum.
Pursuant to the terms of the Note, the holder of the Note may convert the entire
principal balance and all accrued and unpaid interest then outstanding during
the period beginning August 18, 2022 and ending on August 17, 2024 into shares
of the Company Common Stock (the "Conversion Shares") at a per share conversion
price of $6.254. Each Conversion Share will consist of one share of our Common
Stock. The conversion price and number of shares of the Company's Common Stock
issuable upon conversion of the July 29, 2022 Note are subject to adjustment
from time to time for any subdivision or consolidation of the Company's Common
Stock and other standard dilutive events.
At any time on or after August 18, 2025, the Company may, at its option and upon
30 days written notice provided to the holder, elect to redeem the Note
(in whole and not in part) and the holder shall be obligated to surrender the
Note, at a redemption price equal to 100% of the outstanding principal balance,
together with any accrued but unpaid interest thereon to the redemption date.
After receipt of such redemption notice from the Company, the holder may, at its
option, elect to convert the principal balance and accrued interest into
Conversion Shares by giving written notice of such election to the Company no
later than five days prior to the date fixed for redemption. The foregoing
description of the Note is qualified in its entirety by reference to the full
text of such document, a copy of which is attached to this Report as
Exhibit 10.2, and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 2.03 above, which
disclosure is incorporated herein by reference.
The issuance of the July 29, 2022 Note was and, upon conversion of the July 29,
2022 Note, the issuances of any conversion shares issued thereunder will be,
exempt from registration under Section 4(a)(2) and/or Rule 506(b) of Regulation
D as promulgated by the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), as transactions by an
issuer not involving any public offering.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Document
10.1 Hallador Energy Company Convertible Note Purchase Agreement dated July
29, 2022
10.2 Hallador Energy Company Unsecured Convertible Promissory Note dated July
29, 2022 - Lubar Opportunities Fund I, LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses