On November 27, 2019, Lilis Energy, Inc. (the “Company”) entered into a Fifth Amendment (the “Fifth Amendment”) to the Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of October 10, 2018 (as amended, the “Revolving Credit Agreement”) among the Company, certain subsidiaries of the Company, as guarantors, the lenders party thereto, and BMO Harris Bank N.A., as administrative agent. The Fifth Amendment provides that the semi-annual redetermination of the borrowing base under the Revolving Credit Agreement previously scheduled to occur on or about November 1, 2019 (the “Fall 2019 Scheduled Redetermination”) will instead occur on December 16, 2019. Additionally, among other matters, the Fifth Amendment shortened the period over which the Company may repay in installments any borrowing base deficiency that may exist as a result of the Fall 2019 Scheduled Redetermination, as described below.

Under the Revolving Credit Agreement, a borrowing base deficiency will occur if the amounts outstanding under the Revolving Credit Agreement exceed the borrowing base then in effect. If a borrowing base deficiency occurs, the Company is required to repay borrowings in excess of the borrowing base or eliminate the borrowing base deficiency by pledging additional oil and gas properties to secure its obligations under the Revolving Credit Agreement. The Company has the option to effect such repayment either (1) in full within 30 days after the redetermination or (2) in monthly installments over a period of, except as amended by the Fifth Amendment, six months, commencing 30 days after the redetermination. The Fifth Amendment provides that, for a borrowing base deficiency that exists as a result of the Fall 2019 Scheduled Redetermination only, the period over which the Company may repay the amount of the deficiency in installments will be four months, rather than six months, commencing 30 days after the redetermination.

As previously disclosed, the Company currently is fully drawn against the existing $115 million borrowing base under the Revolving Credit Agreement. The Company is currently considering alternative secured financing to replace the Revolving Credit Agreement. Additionally, the Company may consider sales of non-core assets to fund any repayment obligations under the Revolving Credit Agreement that may arise from a borrowing base deficiency that results from the Fall 2019 Scheduled Redetermination.

The foregoing description of the terms of the Fifth Amendment is not complete and is qualified in its entirety by reference to the full copy of the Fifth Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On November 21, 2019, the Company received a deficiency letter (the “Deficiency Letter”) from the NYSE American LLC (“NYSE American”) stating that the Company is below compliance with the continued listing standards as set forth in Section 1003(a)(i)-(iii) of the NYSE American Company Guide (the “Company Guide”) because it has reported a stockholders’ equity deficiency as of September 30, 2019 and net losses in its five most recent fiscal years ended December 31, 2018.

The Company’s common stock will continue to be listed on the NYSE American while it attempts to regain compliance with the listing standards set forth in Section 1003(a)(i)-(iii) of the Company Guide, subject to the Company’s compliance with other continued listing requirements of the NYSE American. The Deficiency Letter does not affect the Company’s business operations or its reporting obligations under the rules and regulations of the Securities and Exchange Commission, nor does the Deficiency Letter conflict with or cause an event of default under any of the Company’s material agreements.

Consistent with the rules set forth in the Company Guide, the Company intends to submit a detailed plan of compliance advising the NYSE American of the actions the Company has taken, or plans to take, that would bring it into compliance with the NYSE American’s continued listing standards within 18 months of receipt of the Deficiency Letter.

Item 8.01 Other Information.

On November 27, 2019, the Company issued a press release disclosing receipt of the Deficiency Letter. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K, which is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

* Filed herewith

LILIS ENERGY, INC. Exhibit
EX-10.1 2 exhibit101llex8k20191127.htm EXHIBIT 10.1 Exhibit Execution VersionFIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENTThis FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) dated as of November 27,…
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About LILIS ENERGY, INC. (OTCMKTS:LLEX)

Lilis Energy, Inc. is an upstream independent oil and gas company. The Company is engaged in the acquisition, drilling and production of oil and natural gas properties and prospects. The Company drills for, operates and produces oil and natural gas wells through its land holdings located in Wyoming, Colorado, and Nebraska. Its total net acreage in the Denver-Julesburg (DJ) Basin is approximately 7,200 acres. The Company’s primary targets within the DJ Basin are the conventional Dakota and Muddy J formations. In addition to its DJ Basin holdings, it focuses on the Permian’s Delaware Basin in Winkler and Loving Counties, Texas and Lea County, New Mexico. The Company’s net acreage in the Delaware Basin is approximately 4,433 net acres. The vertical well produces approximately 690 net million cubic feet (mcf) per day. The well holds the lease to all depths, from surface down to approximately 22,000 feet, including the Wolfcamp, Bone Springs, and Avalon formations.