On
March 10, 2017, Zion Oil & Gas, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”)
the prospectus supplement dated as of March 10, 2017 and accompanying base prospectus dated February 23, 2017 (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. 333-216191),
as amended, which was declared effective by the SEC on March 10, 2017 (the “Registration Statement”).
An
Amendment No. 3 to the Prospectus Supplement is being filed on February 1, 2018. This Amendment No. 3 to Prospectus Supplement
amends the Prospectus Supplement. This Amendment No. 3 to Prospectus Supplement should be read in conjunction with the Original
Prospectus Supplement and the base Prospectus effective March 10, 2017. This Amendment No. 3 is incorporated by reference into
the Original Prospectus Supplement. This Amendment No. 3 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. 3 – Unit Option under the Unit Program
Under
Amendment No. 3, the Unit Program consists of a combination of common stock and warrants, a time period and a unit price, but
otherwise the same Unit Program features, conditions and terms in the Prospectus Supplement apply. Under Amendment No. 3,
the Company’s Unit Option Program begins on February 1, 2018 and is scheduled to terminate on the earlier of February 28,
2018 or when this Unit Option receives $5 million in Unit purchases. The Unit Option consists of Units of our securities where
each Unit (priced at $250.00 each) is comprised of (i) fifty (50) shares of Common Stock and (ii) Common Stock purchase warrants
to purchase an additional fifty (50) shares of Common Stock. The investor’s Plan account will be credited with the number
of shares of the Company’s Common Stock that is acquired under the Units purchased. Each warrant affords the investor the
opportunity to purchase one share of our Common Stock at a warrant exercise price of $5.00. The warrant shall have the symbol
“ZNWAH,” but no assurance can be provided that the warrants will be approved for listing on the NASDAQ Global Market.
The warrants will become exercisable
on the first trading day after the 31
st
day following the Unit Option Termination Date (i.e., on the earlier of February
28, 2018 or when this Unit Option receives $5 million in Unit purchases) and continue to be exercisable for one (1) year after
the exercise date at a per share exercise price of $5.00. The Unit is priced at $250.00 per Unit.
Please
note that the per Unit price of $250 is priced at a significant premium to the Company’s publicly traded common stock price.
Accordingly,
all references in the Original Prospectus Supplement concerning a Unit Option Program continue, except for the substitution of
the Unit Option Program details under Amendment No. 3. All other Plan features, conditions and terms remain unchanged.
Warrant
Agent Agreement
Effective
February 1, 2018, the Company executed a Warrant Agent Agreement with AST as the Warrant Agent, Exhibit 4.6, below, for the warrant
ZNWAH under the Unit Option Program beginning February 1, 2018 as described under Amendment No. 3.
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 that begins on February 1, 2018 and is terminated on the earlier of February 28, 2018 or when this Unit Program
receives $5 million in Unit purchases.