Valor Energy Inc

On November 8, 2021, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with each of certain institutional investors, pursuant to which we issued and sold, in a private placement 5,000 shares (the “Preferred Shares”) of our Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) and Investor Warrants (the “Investor Warrants”) to initially acquire up to an aggregate number of shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”) that equals to the number of shares of Common Stock to be issued upon conversion of the Preferred Shares at $0.68 per share (Prior to the 1-for-10 reverse stock split on April 6, 2022). The purchase price for the Preferred Shares shall be $1,000 per each Preferred Share. Pursuant to the certificate of designations for the Series A Convertible Preferred Stock (the “COD”), at any time after the initial issuance date, each holder shall be entitled to convert any portion of the outstanding Preferred Shares held by such holder into shares of Common Stock (the “Conversion Shares”) at initial conversion price, which shall be adjusted to the greater of $4.1 per share or 85% of the closing bid price of the Company’s Common Stock reported on the NASDAQ Capital Market on the applicable date. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise price of the November 2021 Investors Warrants was adjusted to $4.10. On August 9, 2022, we agreed with certain investors to further reduce the conversion price of the Preferred Shares from $4.10 to $2.00 and to increase the number of the shares of common stock that are available to be issued upon conversion of the Preferred Shares from 1,092,683 to 2,240,000.

The exercise price of the Investor Warrants is subject to customary adjustment in case of stock splits, stock dividends, stock combinations and similar recapitalization transactions. In addition, the exercise price of the Investor Warrants is also subject to an adjustment in the event that the Company issues or is deemed to issue shares of Common Stock for less than the applicable exercise price of such Investor Warrants. The exercisability of the Investor Warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% or 9.99% as the Investor chooses.

The closing of the above offering (the “Offering”) occurred on November 10, 2021. As of the date of this proxy statement, none of the Investor Warrants have been exercised.

On April 25, 2022, we held special stockholder’s meeting, which includes a proposal to approve, for purpose of complying with Nasdaq Listing Rule 5635(d), of any future adjustments of exercise prices of our Investor Warrants issued on November 10, 2021 below the floor price of $0.7125 (Prior to the 1-for-10 reverse stock split on April 6, 2022). Such proposal was approved on such date.

Pursuant to the Investors Warrants, if at any time and from time to time on or after the issuance date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the common stock (“Stock Combination Event”) and the event market price is less than the original exercise price of $0.82 (Prior to the 1-for-10 reverse stock split on April 6, 2022) then in effect, then on the sixteenth (16th) trading day immediately following such Stock Combination Event, the exercise price then in effect on such sixteenth (16th) trading day shall be reduced (but in no event increased) to the event market price. As the 1-for-10 reverse stock split on the Company’s common stock became effective on April 6, 2022, the exercise price of the Investors Warrants was adjusted to $1.13 and the total number of shares of the Investors Warrants was adjusted to 5,335,763.