Hallador Energy Company announced a that it has entered into a convertible note purchase agreement with returning investors, Lubar Opportunities Fund I, a fund managed by Lubar & Co., Inc. for $8,000,000, and Hallador Alternative Assets Fund LLC, a fund managed by Hallador Investment Advisors Inc. for $1,000,000 for private placement of a unsecured convertible promissory notes for gross proceeds of $9,000,000 on July 29, 2022. On same day company received $5,000,000 in its first tranche from Lubar Opportunities Fund I, a fund managed by Lubar & Co., Inc., and $4,000,000 will receive in second tranche, including $3,000,000 from Lubar Opportunities Fund I, a fund managed by Lubar & Co., Inc., and Hallador Alternative Assets Fund LLC, a fund managed by Hallador Investment Advisors Inc. for $1,000,000 on August 8, 2022. The notes will mature on December 29, 2028, and will accrue interest at 8% per annum, which interest will be payable on the date of the maturity.

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 at a per share conversion price of $6.254. Each conversion share will consist of one share of common stock. The conversion price and number of shares of its 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 its 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 notes are issued pursuant to exemption from registration under Section 4(a)(2) and/or Rule 506(b) of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.