Torchlight Energy Resources (TRCH) Announces $3M Registered Direct Offering of Common Stock, Warrants

Torchlight Energy Resources, Inc. (NASDAQ: TRCH), an energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States, today announced the company has entered into a securities purchase agreement with an institutional investor for the sale of 7,894,737 shares of common stock at a price of $0.38 per share for total gross proceeds of $3,000,000. As part of the offering, the company issued the investor, warrants to purchase up to 3,157,895 shares of common stock. The warrants will be exercisable for the period of 12 months from the date of issuance, at an exercise price of $0.55 per share. The offering will generate net cash proceeds of approximately $2.8 million after deducting estimated expenses in connection with the offering. The company intends to use the net cash proceeds for drilling obligations, debt interest payments and general corporate purposes.

Commenting on the offering, John Brda CEO of Torchlight Energy said, "Our goal has been to position Torchlight to weather this current storm of COVID-19 and volatile oil prices. We believe that the proceeds from this financing will allow us to meet our near-term drilling and financial obligations, as we continue to delineate the value of our Orogrande Project."

Pursuant to the form of warrant, in the event the weighted average price of the company's common stock as reported by Nasdaq is greater than the exercise price, the warrants must be exercised for cash or on a traditional cashless basis, and if the weighted average is less than the exercise price, the warrants may be exercised at the option of the holder on a cashless basis, in whole or in part, for a number of shares, equal to the same number of shares that would have been issued to the holder, if such holder had elected to exercise by paying the aggregate exercise price in cash, without having to pay such aggregate exercise price.

This registered direct offering is expected to close on or about June 16, 2020, subject to the satisfaction of customary closing conditions. Roth Capital Partners acted as financial advisor in the transaction.

A shelf registration statement on Form S-3 (File No. 333-220181) relating to the securities to be issued in the proposed offering was filed with the Securities and Exchange Commission (SEC) and is effective.

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