GreenHunter Resources Inc. (NYSE MKT: GRH) (NYSE MKT: GRH.PRC) has entered into subscription agreements with certain accredited investors (the purchasers), pursuant to which the company will issue and sell to the purchasers an aggregate of 3,333,334 shares of the company’s common stock (the shares) and warrants to purchase up to an additional 1,166,667 shares of company’s common stock (the warrants, and the shares issuable upon exercise of the warrants, the warrant shares), at a price of $0.60 per unit (before placement fees and offering expenses).
Each unit consists of one share and one warrant. The warrants will entitle its holder to purchase shares of the company’s common stock at an initial exercise price of $0.81 per share, will be immediately exercisable and will expire on the third anniversary of the date of issuance. The issuance and sale of the shares, warrants, and warrant shares (collectively, the securities) are registered pursuant to the company’s registration statement on Form S-3 (No. 333-198051), which was declared effective by the Securities and Exchange Commission (SEC) on Oct. 24, 2014, as supplemented by a prospectus supplement dated Jan. 22, to be filed with the SEC pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the registration statement).
Closing of the offering is expected to take place on Jan. 27.
The company engaged MLV & Co. as its exclusive placement agent in connection with the offering and sale of the securities pursuant to a placement agency agreement, dated Jan. 22. Pursuant to the placement agreement, MLV has no obligation to buy any of the securities from the company and is acting solely as the placement agent. The company agreed to pay MLV 6% of the aggregate gross proceeds received by the company from the sale of the securities, plus certain costs and expenses not to exceed $15,000. The placement agreement contains customary representations, warranties and indemnification provisions.
GreenHunter Resources Inc., through its wholly-owned subsidiaries, GreenHunter Water LLC, GreenHunter Environmental Solutions LLC, and GreenHunter Hydrocarbons LLC, provides its Total Water Management Solutions/Oilfield Fluid Management Solutions in the oil field and its shale plays of the Appalachian Basin.