U.S. Geothermal Inc. signs new agreement on optional equity funding
Raft River plant - binary power plant, Idaho, (source: Ormat)
Alexander Richter
25 Jan 2016
U.S. Geothermal Inc. signs purchase agreement, that provides the company the option to raise up to $10 million in equity capital.
In an announcement today, U.S. Geothermal Inc. reports that it has signed a new purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”), a Chicago-based institutional investor. It may provide up to $10 million of equity capital over the agreement’s 30-month term.
Following the year-end, management determined it would be prudent to enter into a new LPC facility. The Company’s first Purchase Agreement with LPC, was entered into on May 21, 2012 and expired in 2015. Under the new Purchase Agreement, at the company’s sole discretion, the Company has the right to sell and LPC has the obligation to purchase up to $10 million of equity capital over a 30 month period subject to the conditions in the Purchase Agreement. The agreement provides for an initial sale of $650,000 of shares of common stock upon closing. Net proceeds from LPC’s investments will be used to cover a portion of the cost of the recent acquisition of the Goldman Sachs ownership interest of the Raft River project, development of our geothermal projects and for general corporate purposes.
“The LPC facility will enable us to raise capital, at market prices, on an as needed basis, which further enhances our liquidity,” stated Dennis Gilles, Chief Executive Officer of U.S. Geothermal Inc.
During the 30 month term of the Purchase Agreement, the Company, at its sole discretion, has the right to sell to LPC up to $10 million of its common stock, in amounts as described in the Purchase Agreement and subject to certain conditions. Under the Purchase Agreement, there are no upper limits to the price LPC may pay to purchase the Company’s common stock. LPC has no right to require any sales by U.S. Geothermal, but is obligated under the agreement to purchase the Company’s common stock, as U.S. Geothermal directs in its sole discretion as provided in the agreement. The purchase price of the Company shares related to any future investments will be based on the prevailing market prices of the Company’s shares immediately preceding the notice of sale to LPC. LPC has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s shares of common stock. In consideration for entering into the Purchase Agreement, the Company has issued shares of common stock to LPC as a commitment fee. The Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any cost or penalty.
Source: Company release via Stockhouse
