Prospectus
Supplement No. 1
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Filed
pursuant to Rule 424(b)(3)
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To
Prospectus dated May 14, 2008
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File
No. 333-148982
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ZION
OIL & GAS, INC.
This
document supplements the prospectus dated May 14, 2008 relating to the offer
and
sale of a minimum of 350,000 up to a maximum of 2,500,000 units of our
securities. This prospectus supplement is incorporated by reference into the
prospectus. This prospectus supplement is not complete without, and may not
be
delivered or utilized except in connection with, the prospectus, including
any
amendments or supplements to the prospectus.
Initial
Closing, Continuing Offering and Subsequent Closings
Following
the receipt and acceptance of subscriptions in a total amount of $3,509,940
for
350,994 Units pursuant to the terms of our offering subject of the prospectus,
Zion effected an initial closing of the offering on October 24, 2008.
In
connection with the initial closing Zion issued 350,994 Units in accordance
with
the instructions of the subscribers and issued instructions to the escrow agent
to disburse proceeds of the subscriptions in the amount of $3,269,145.00 to
the
company. The remaining $240,795.00 of funds disbursed from the escrow account
were distributed at the initial closing to Brockington Securities, Inc., the
underwriter of the offering, and its placement agents, in accordance with the
terms of underwriting agreement as described at pages 14-16 of the prospectus
("PLAN OF DISTRIBUTION - Underwriting Agreement"), as follows: $150,496.87
in
commissions and $90,298.13 of expense reimbursement.
The
offering with respect to the remaining 2,149,006 maximum number of Zion's Units
being offered pursuant to the prospectus will continue in accordance with the
"PLAN OF DISTRIBUTION" as described in the prospectus at pages 14-16 until
the
receipt and acceptance of the maximum offering of 2,500,000 Units or January
9,
2009 whichever occurs first - unless earlier terminated. One or more interim
closings may take place between the initial and final closing. Subscriptions
for
Units in the offering received following the cutoff for the subscriptions
accepted for the initial closing on October 11, 2008, will continue to be
deposited in the Zion escrow account at Sterling Trust Company pending their
acceptance and disbursement in the context of subsequent closings. Terms of
the
continuing offering will be the same as the terms prior to the initial
closing.
Listing
on NYSE Alternext US LLC and Commencement of Trading of the
Units
Upon
the
completion of the initial closing, the listing of the Units for trading on
the
NYSE Alternext US LLC was approved. The Units will trade under the ticker symbol
ZN.U. The Units will continue to be tradable until the 30 th
day
after the Termination Date (as defined below) of the Offering, at which time
the
shares and the Unit Warrant will separate and trade separately and the Unit
as
such will cease to exist. The warrant included in the Unit will first become
exercisable only on the 31st
day
following the Termination Date and will continue to be exercisable through
January 31, 2012 at a per share exercise price of $7.00. The offering will
terminate on the earlier to occur of (the “Termination Date”: (i) January 9,
2009, (ii) the date on which a total of 2,500,000 units have been subscribed
and
accepted, or (iii) such date as announced by the Company on no less than two
trading days' prior notice.
Use
of Proceeds
As
described above, in connection with the initial closing, the escrow agent
released the $3,509,940.00 of funds in the escrow account as follows:
$240,795.00 to the underwriter in payment of $150,496.87 of commissions and
$90,298.13 of expenses due underwriter in accordance with the terms of the
underwriting agreement. The remaining $3,269,145.00 were released to the company
for use by the company for the purposes and in the amounts described at pages
10-12 of the prospectus ("USE OF PROCEEDS").
Investing
in our common stock is very risky. See "Risk Factors" commencing at page 2
of
the prospectus to read about the risks that you should consider before buying
shares of our stock.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission
has approved or disapproved of these securities or determined if the prospectus
or any prospectus supplement is truthful or complete. Any representation to
the
contrary is a criminal offense.
The
date
of this prospectus supplement is October 24, 2008.