The initial public offering alone can be a huge and heady endeavor. Try five of them. This is what management at Dallas-based Zion Oil & Gas Inc. has had under way since the beginning of 2007. Zion went public on the American Stock Exchange on January 3, offering 436,907 shares at $7 each to raise $3.06 million in the first round of its "best-efforts/ minimum/maximum" IPO. This unique form of IPO can be structured in several stages, or tranches, but is much more common in debt offerings and private placements, says Zion chief executive Richard Rinberg. "The concept isn't new, but it is unusual in the case of an equity offering on a national exchange," Rinberg says. The structure allows an issuer and underwriter to keep the offering open for an extended period of time, similar to an open-shelf offering, as long as the issuer keeps its prospectus disclosure current and there is no fundamental change in the relevant facts and circumstances relating to the issuer or the offering. "Our offering was structured so that we were able to schedule several closings, provided that the first closing took place after at least $2.45 million (350,000 shares minimum at $7 each) had been raised," Rinberg says. "The minimum amount had to be sufficient to meet the minimum work program as presented in the prospectus, and it had to be raised before a predetermined cut-off date. Additional closings can then be scheduled until the maximum has been raised, or until the end of the subscription period as set out in the plan of the offering described in the prospectus." For more on this, see the May issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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