Prospect Global Resources Inc. (NASDAQ: PGRX) announced today that on
May 2, 2013 it had received a $5 million subordinated loan which meets a
required funding milestone required under its senior debt and plans to
commence a $12 million rights offering this week in which all
shareholders of record as of May 16, 2013 will receive their pro rata
share of rights to subscribe for units consisting of a share of common
stock and one-half a warrant to purchase a share of common stock. A unit
is priced at $0.22 (27% below the last reported trading price on May 7,
2013) and each warrant is exercisable for one year following the closing
of the rights offering at $.35 per share. The warrants are immediately
detachable from the shares of common stock purchased in the rights
offering. Holders who purchase their entire pro rata share of the units
may exercise an over-subscription right to subscribe for unsubscribed
units to the extent available. The lenders of the subordinated loan have
agreed to convert their subordinated notes into the securities offered
in the rights offering subject to shareholder approval of such
conversion at our annual meeting of shareholders, expected to occur in
July 2013.
Two existing PGRX stockholders, Very Hungry LLC and Scott Reiman 1991
Trust, loaned the Company $5 million on May 2, 2013 in exchange for
subordinated notes in the aggregate principal amount of $5.5 million and
adjustments to all of their warrants to purchase common stock to an
exercise price of $0.25 and a termination date of August 1, 2016.
The rights offering will be conducted via an existing effective shelf
registration statement. Each shareholder will receive 0.751% of a
subscription right for each share held. The subscription rights are not
transferable and will be evidenced by subscription rights certificates.
Prospect will mail rights offering materials, including a prospectus
supplement and a subscription rights certificate, to the record holders
on or about May 10, 2013.
In addition to the rights offering, Prospect intends to conduct an
underwritten public offering in the next few weeks. The proceeds from
the rights offering and the public offering are expected to be used to
continue to fund Prospect's definitive feasibility study, make mandatory
repayments of outstanding indebtedness, pay the expenses associated with
the rights offering and the public offering and for general working
capital purposes.
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor shall there be any
sale of securities mentioned in this press release in any state in which
such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state. The rights
offering and the public offering will each be made by means of a
prospectus and a related prospectus supplement. Please contact Gregory
Dangler, CFO, at Prospect Global Resources Inc., 1401 17th
Street, Suite 1550, Denver CO 80202 for a copy of the prospectus
supplement and the prospectus once it has been filed with the Securities
and Exchange Commission.
About Prospect Global Resources Inc. [PGRX]:
Regarding Forward-Looking Statements
With the exception of historical matters, the matters discussed in
this press release include forward-looking statements that involve risks
and uncertainties that could cause actual results to differ materially
from projections or estimates contained herein. Such forward-looking
statements include statements regarding current and future
classification of our potash resources and development of our potash
mining facility. Factors that could cause actual results to
differ materially from projections or estimates include, among others,
potash prices, economic and market conditions, and the additional risks
described in Prospect Global's filings with the SEC, including Prospect
Global's Annual Report on Form 10-K for the year ended March 31, 2012.
Most of these factors are beyond Prospect Global's ability to predict or
control. The forward looking statements are made as of the date hereof
and, except as required under applicable securities legislation,
Prospect Global does not assume any obligation to update any
forward-looking statements. Readers are cautioned not to put undue
reliance on forward-looking statements.
About Prospect Global Resources Inc.
Prospect Global Resources, Inc. is a Denver-based company engaged in
the exploration and development of a large, high-quality potash deposit
located in the Holbrook Basin of eastern Arizona. The company's stock is
traded on the NASDAQ Capital Market under the ticker symbol PGRX.
Additional details about Prospect Global Resources Inc. can be viewed
at the Company’s website, www.prospectgri.com.
