New Era Helium revises equity purchase agreement

New Era Helium Inc. (NASDAQ:NEHC), a Nevada-based company engaged in crude petroleum and natural gas with a market capitalization of $31.6 million, has amended its Equity Purchase Facility Agreement (EPFA) with an institutional investor. According to InvestingPro data, the company currently operates with concerning liquidity metrics, as indicated by a current ratio of 0.36. On Thursday, the company announced the revision of the agreement initially reported on December 10, 2024, which now stands as the Amended and Restated Equity Purchase Facility Agreement (A&R EPFA).

The original EPFA allowed New Era Helium, during a commitment period, to sell up to $75 million of its common stock to the investor. In addition to this, the company issued promissory notes totaling $10 million to the investor. This financing arrangement comes at a critical time, as InvestingPro analysis shows the company’s stock has experienced significant volatility, with a dramatic decline of nearly 75% over the past six months. The A&R EPFA, effective as of Thursday, introduces new terms regarding the sale and purchase of common stock and the handling of proceeds from these transactions.

Under the A&R EPFA, the purchase price per share is set at 95% of the market price. The agreement also stipulates that any proceeds from the sale of common stock (Advance Proceeds) must be used in accordance with Section 7.15 of the A&R EPFA. This is particularly relevant when the company submits an Advance Notice during a period leading up to a monthly payment on the promissory notes. In such cases, the Advance Proceeds are to be applied first towards accrued interest, then any payment premiums, and finally towards the outstanding principal of the promissory notes.

The A&R EPFA sets the floor price for the company’s common stock at $0.7176 per share, which is subject to adjustment every six months starting from July 15, 2025. However, any adjustments will only reduce the floor price, and the company retains the right to lower the floor price further at any time, as per the agreement’s terms and Nasdaq’s rules.

This strategic move by New Era Helium aims to provide the company with financial flexibility and potential capital for its operations. The details of the A&R EPFA are outlined in Exhibit 10.1 of the company’s Form 8-K filed with the SEC, and the information is based on this press release statement.

In other recent news, Roth CH Acquisition V Co. announced the approval of a significant business combination with New Era Helium Corp. Shareholders voted overwhelmingly in favor of the merger, with approximately 99% of shares represented at the meeting supporting the proposal. This merger is expected to close soon, pending the approval to list the combined entity on the Nasdaq. Additionally, the Redomestication Merger Proposal was approved, allowing the company to merge into its wholly-owned Nevada subsidiary, Roth CH V Holdings Inc., which will continue as a Nevada corporation.

The company’s Charter Amendment Proposal, which involves adopting new articles of incorporation, received approval from 75.04% of the outstanding shares. Governance Proposals, including a name change and an increase in authorized shares, were also endorsed by 99% of the represented shares. The Nasdaq Proposal, crucial for compliance with listing rules, was similarly approved. Furthermore, the Directors Election Proposal confirmed E. Will Gray as Chairman, with Phil Kornbluth, William H. Flores, Charles Nelson, and Stan Boroweic joining as Independent (LON:IOG) Directors. The Management Equity Incentive Plan Proposal was also approved, facilitating the implementation of the incentive plan.

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