Lucas Energy, Inc. (NYSEMKT:LEI) issued 810,000 shares of its common stock upon the exercise of that certain warrant (the “First Warrant”) to purchase 1,384,616 shares of its common stock, and the remaining 3,117,351 shares of common stock for the exercise and payment of conversion premium under the First Warrant are being held in abeyance until such time as it would not result in the warrant holder exceeding its beneficial ownership limitation. The First Warrant was issued pursuant to that certain securities purchase agreement (the “Securities Purchase Agreement”) that the Company had entered into with an accredited institutional investor (the “Investor”) on April 6, 2016 and that was previously reported in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 7, 2016.

The sale and issuance of the securities described herein have been determined to be exempt from registration under the Securities Act of 1933 in reliance on Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended, Rule 506 of Regulation D promulgated thereunder and Regulation S promulgated thereunder, as transactions by an issuer not involving a public offering. The Investor has represented that it is an accredited investor, as that term is defined in Regulation D, it is not a U.S. Person, and it is acquiring the securities for its own account. The Company received gross proceeds of $4,500,000 from the exercise of the First Warrant and, as previously disclosed, will pay placement agent fees of $427,500 for services rendered in connection with the First Warrant.