On January 2, 2020, we sold 1,666,667 restricted shares of common stock to an individual investor for a total purchase price of $1,000,000, in a private offering. As part of the sale, we also issued the investor a five-year warrant to purchase 1,666,667 shares of common stock at an exercise price of $0.80 per share. The warrant agreement provides that the holder cannot convert if such conversion will result in the holder beneficially owning in excess of 4.99% of our shares of common stock outstanding immediately after giving effect to such exercise. By written notice, the holder may from time to time increase or decrease this percentage to any other percentage not in excess of 19.99%, provided that any such increase will not be effective until the 61st day after such notice is delivered to us.

On December 3, 2019, we sold a $540,000 convertible promissory note to an individual investor for a purchase price of $540,000, in a private offering. The promissory note has a term of 12 months and earns interest at the rate of 10% per annum, to be paid in one lump sum at maturity. The holder of the promissory note has the right to convert the note into either common stock at a conversion price of $0.75 per share or into a working interest in our subsidiary Hudspeth Oil Corporation’s working interest in certain oil and gas leases covering 134,000 acres in Hudspeth County, Texas, known as the “Orogrande Project.” The note holder’s working interest (determined on a percentage basis) would be equal to one acre of the Orogrande Project per $1,100 of principal amount and unpaid interest thereon that is converted. By way of example, if the holder elects to convert $550,000 in principal amount and unpaid interest thereon into a working interest, then such holder would receive 0.00373% of the Orogrande Project (i.e., a 0.00373% working interest in 50% of the entire Orogrande Project).

On November 25, 2019, we sold 300,000 restricted shares of common stock to an individual investor for a total purchase price of $180,000, in a private offering.

All of the above sales of securities were sold under the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and the rules and regulations promulgated thereunder. The issuances of securities did not involve a “public offering” based upon the following factors: (i) the issuances of securities were isolated private transactions; (ii) a limited number of securities were issued to a limited number of purchasers; (iii) there were no public solicitations; (iv) the investment intent of the purchasers; and (v) the restriction on transferability of the securities issued.

About Torchlight Energy Resources, Inc. (NASDAQ:TRCH)

Torchlight Energy Resources, Inc. (Torchlight) is engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. The Company focuses on drilling and working interest programs within the United States. The Company has interests in approximately four oil and gas projects: the Marcelina Creek Field Development in Wilson County, Texas; the Ring Energy Joint Venture in Southwest Kansas; Hunton wells in partnership with Husky Ventures in Central Oklahoma, and the Orogrande Project in Hudspeth County, Texas. The Company also operates through two other subsidiaries, including Torchlight Energy Operating, LLC, a Texas limited liability company, and Hudspeth Oil Corporation, a Texas corporation. The Marcelina Creek Field Development is located over the Austin Chalk, Buda and Eagle Ford Formations.