On
March 31, 2014, Zion Oil & Gas, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”)
the prospectus supplement dated as of March 27, 2014 and accompanying base prospectus dated March 27, 2014 (collectively, the
“Prospectus”) relating to the Company’s Dividend Reinvestment and Direct Stock Purchase Plan (the “Plan”
or “DSPP”). The Prospectus forms a part of the Company’s Registration Statement on Form S-3 (File No. 333-193336),
as amended, which was declared effective by the SEC on March 27, 2014 (the “Registration Statement”).
An
Amendment No. 7 to the Prospectus Supplement is being filed on November 1, 2016. This Amendment No. 7 to Prospectus Supplement
amends the Prospectus Supplement as previously supplemented on July 31, 2014 (“Amendment No. 2 to Prospectus Supplement”).
This Amendment No. 7 to Prospectus Supplement should be read in conjunction with the Original Prospectus Supplement and the base
Prospectus effective March 27, 2014 and Amendment No. 2. This Amendment No. 7 is incorporated by reference into the Original Prospectus
Supplement. This Amendment No. 7 is not complete without, and may not be delivered or utilized except in connection with, the
Original Prospectus Supplement, including any amendments or supplements thereto.
Amendment
No. 7 - New Unit Option under the Unit Program
Under
the Plan, the Company is offering a new Unit Option Program. The Unit Program will now consist of a new combination of common
stock and warrants, a new time period and a new unit price, but otherwise the same Unit Program features, conditions and
terms in the Prospectus Supplement and Amendment No. 2 apply. The Company’s new Unit Option Program begins November 1,
2016 and terminates January 31, 2017 (unless extended at the Company’s sole discretion). This new Unit Option Program
enables participants to purchase Units of our securities where each Unit (priced at $10.00) is comprised of seven (7) shares
of Common Stock and seven (7) Common Stock purchase warrants. Each warrant affords the investor or stockholder
the opportunity to purchase one share of the Company’s Common Stock at a warrant exercise price of $1.00.
The
warrant shall have the symbol “ZNWAE,” but no assurance can be provided that the warrant will be approved for listing
on the NASDAQ Global Market.
All
warrants will first become exercisable on March 3, 2017, which is the 31
st
day following the Unit Option Termination
Date (i.e., on January 31, 2017), unless extended, and continue to be exercisable through March 3, 2020 (3 years) at a per share
exercise price of $1.00. If the Common Stock of the Company trades above $5.00 per share as the closing price for fifteen (15)
consecutive trading days at any time prior to the expiration date of the warrant, the Company has the sole discretion to provide
a Notice to warrant holders of an early termination of the warrant within sixty (60) days of the Notice. The Unit is priced at
$10.00 per Unit and no change will be made to the warrant exercise price of $1.00 per share.
Accordingly,
all references in the Original Prospectus Supplement and Amendment No. 2, concerning the Unit Option continue, except for the
substitution of the new Unit Option terms above. All other Plan features, conditions and terms remain unchanged.
Warrant
Agent Agreement
Effective
August 1, 2014, the Company executed a Transfer Agency and Registrar Services Agreement with the American Stock Transfer &
Trust Company, LLC, a New York limited liability trust company (“AST”), located at 6201 15
th
Avenue, Brooklyn,
NY 11219, and executed with AST a Warrant Agreement to act as warrant agent for warrant ZNWAA. Under the agreements, AST is our
sole Transfer Agent and registrar for the Company’s common stock and warrants and is our DSPP Plan Agent. Effective February
2, 2015, the Company executed on February 6, 2015 another Warrant Agent Agreement with AST as the warrant agent for the new warrants
ZNWAB, ZNWAC and ZNWAD under the Unit Option Program beginning February 2, 2015. Effective November 1, 2016, the Company executed
another Warrant Agent Agreement with AST as the Warrant Agent, Exhibit 4.6, below, for the new warrant ZNWAE under the Unit Option
Program beginning November 1, 2016 as described under Amendment No. 7.
The
Company is filing the items included in Exhibits 4.5 and 4.6 to this Current Report on Form 8-K, each of which relates to the
above Registration Statement, for the purpose of incorporating such items as exhibits to the Registration Statement for the DSPP
Unit Option Program beginning November 1, 2016. Form 8-K, dated July 31, 2014, was filed with Exhibits 4.1 and 4.2, relating to
Form of Warrants for ZNWAA and the Warrant Agreement effective August 1, 2014 that are both still in effect. Form 8-K, dated February
6, 2015, was filed with Exhibits 4.3 and 4.4, relating to Form of Warrants for ZNWAB, ZNWAC and ZNWAD and the Warrant Agreement
effective February 2, 2015 that are both still in effect.