HALLADOR ENERGY CO: Entering into a Material Definitive Agreement, Creating a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Financial Statements and Exhibits (Form 8-K)

Section 1.01 Entering into a Material Definitive Agreement.

The information set forth in Section 2.03 is incorporated by reference into this Section 1.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under a

Off-balance sheet arrangement of a registrant.

On August 5, 2022, Hallador Energy Company (the “Company”) has signed an amendment to its credit agreement with PNC, the administrative agent of its lenders. The main purpose of this amendment was to change the authorized leverage ratio and the debt service coverage ratio by September 30, 2022. The maximum leverage ratio allowed for the period ending September 30, 2022 was raised to 4.50X, the debt service coverage ratio for the period ending September 30, 2022
has been waived, the maximum capital expenditures allowed for the year ending
December 31, 2022 was raised to $40 millionand authorized the issuance of unsecured debt securities $20 million has been authorized by October 31, 2022.

A copy of the Credit Agreement is attached as Exhibit 10.1 to this Form 10-Q.

On August 8, 2022the Company has issued convertible unsecured senior notes (the “Notes”) to two related parties, Lubar Opportunities Fund I, including Mr. David LUBARDirector of the Company, manages in his capacity as Chairman and Chief Executive Officer of Lubar & Cie. ($3.0 million of the principal purchased), and Hallador Alternative Assets Fund, LLCincluding Mr. David C. HardieDirector of the Company, manages in his capacity as Manager of Hallador Management, LLC ($1.0 million of the principal purchased), in the total principal amount of $4.0 million. Funds received from the Notes will be used to provide additional working capital to the Company.

The notes bear interest at the rate of 8% per annum with a maturity date of
December 29, 2028. Pursuant to the terms of the Notes, for the period August 18, 2022 through August 17, 2024holders have the option to convert the Notes into common shares of the Company at a conversion price of
$6.254. Each Conversion Share will consist of one Common Share. The conversion price and the number of ordinary shares of the Company issuable upon conversion of the May 2, 2022 The Notes are subject to adjustment from time to time for any subdivisions or consolidations of the Company’s shares and other standard dilutive events. Beginning August 8, 2025, the Company may, at its option and upon 30 days written notice to Noteholders, elect to redeem the Notes (in whole and not in part) and Noteholders will be required to return the Notes, at a redemption price equal to 100% of the unpaid principal balance, plus 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 5 days before the date set for redemption.

The previous description of August 8, 2022 The notes are qualified in their entirety by reference to the full text of these documents, copies of which are attached to this report as Exhibits 10.2 and 10.3, which are incorporated herein by reference.

Item 3.02 Unrecorded Sales of Equity securities.

Reference is made to the disclosure set forth in 2.03 above, which disclosure is incorporated herein by reference. The issuance of August 8, 2022 Notes was and, when converting the August 8, 2022 Notes, issues 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
Security and Exchange Commission (“SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), as transactions by an issuer not involving a public offering

Item 9.01. Financial statements and supporting documents.

(d)  Exhibits.

  Exhibit No. Document
    10.1        Eighth Amendment to the Third Amended and Restated Credit Agreement dated
              August 5, 2022
    10.2        Hallador Energy Company Unsecured Convertible Promissory Note dated
              August 8, 2022 - Lubar Opportunities Fund I, LLC
    10.3        Hallador Energy Company Unsecured Convertible Promissory Note dated
              August 8, 2022 - Hallador Alternative Assets Fund
  104         Cover Page Interactive Data File (embedded within the Inline XBRL document)


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