As filed with the Securities and Exchange Commission on December 3, 2003
Registration No. 333-__________
Securities and Exchange Commission
Washington, D.C. 20549
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FORM S-3
Registration Statement
Under the Securities Act of 1933
U.S. ENERGY CORP.
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(Exact name of registrant as specified in its charter)
Wyoming
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(State or other jurisdiction of incorporation or organization)
83-0205516
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(I.R.S. Employer Identification No.)
877 North 8th West, Riverton, Wyoming 82501; Tel. 307.856.9271
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(Address, including zip code, and telephone number, including area code,
of issuer's principal executive offices)
Daniel P. Svilar, 877 North 8th West
Riverton, WY 82501; Tel. 307.856.9271
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(Name, address, including zip code, and telephone number of agent for service)
Copies to: Stephen E. Rounds, Esq.
The Law Office of Stephen E. Rounds
1544 York Street, Suite 110, Denver, CO 80206
Tel: 303.377.6997; Fax: 303.377.0231
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Approximate date of commencement and end of proposed sale to the public: From
time to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering:[ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Amount of Maximum Aggregate
Title of Each Class Securities Offering Dollar Price Amount
of Securities to be Registered Price Per of Securities to of
to be Registered in the Offering Security be Registered Fee
---------------- --------------- -------- ------------- --------------
Common Stock 202,593 $2.59 $ 524,716 $ 48.28
Shares (1)
Common Stock 50,000 $5.00 $ 250,000 $ 23.00
Shares (2)
Common Stock 75,000 $ (3) $ 343,750 $ 31.63
Shares (3)
Common Stock 496,875 $ (4) $ 637,500 $ 58.65
Shares (4)
Common Stock 22,500 $4.00 $ 90,000 $ 8.28
Shares (5)
Common Stock 10,000 $2.00 $ 20,000 $ 1.84
Shares (6)
Common Stock 12,500 $3.75 $ 46,875 $ 4.31
Shares (7)
Common Stock 80,000 $4.30 $ 344,000 $ 39.64
Shares (8)
Common Stock 155,430 $2.25 $ 349,718 $ 32.18
Shares (9)
Total No. of Securities
to be Registered 1,104,898 $ 2,606,559 $ 239.81
Shares
(1) These outstanding shares being registered for resale under this
registration statement are held by seven individuals (Dale May, 1,913
shares; Tim and Betty Crotty, 10,000 shares; Robert Hockert, 12,500 shares;
Mathew B. Murphy, 25,000 shares and James and Vida Ann Roebling, 24,260
shares); Sanders Morris Harris Inc. ("SMH"), a financial advisory firm
(50,000 shares); a financial consulting firm (Riches In Resources, Inc.,
7,920 shares); a second financial consulting firm (C.C.R.I. Corporation,
12,000 shares); Burg Simpson Eldredge Hersh Jardine PC, a law firm (59,000
shares).
(2) These shares being registered for resale under this registration statement
are issuable on exercise of outstanding warrants held by SMH, exercisable
at $5.00 per share.
2
(3) These shares being registered for resale under this registration statement
are issuable upon exercise of outstanding warrants held by C.C.R.I.
Corporation (on 25,000 shares exercisable at $3.75 per share, for 25,000
shares exercisable at $4.50 per share, for 25,000 shares exercisable at
$5.50 per share).
(4) 450,000 of these shares are issuable on the future exchange of 199,999
shares of outstanding common stock of the registrant's majority-owned
subsidiary Rocky Mountain Gas, Inc. (a private company), held by five
investors, at an assumed exchange price of $1.00 per registrant share. The
actual exchange prices will be determined on future exchange dates to be
determined, at 77.5% of registrant's stock price for 133,333 of the RMG
shares and 70% for 66,666 of the RMG shares. The balance of 46,875 shares
are issuable on exercise of warrants held by the investors, at an exercise
price of $4.00 per share.
(5) These shares being registered for resale under this registration statement
are issuable upon exercise of outstanding warrants for 19,500 shares held
by McKim & Company, LLC, a registered broker- dealer, and an individual
(warrants on 3,000 shares, held by John Schlie, an employee of McKim &
Company). These warrants were issued in partial compensation of services
provided to the issuer in connection with a private placement of securities
of RMG and the issuer (see note (4)). These warrants are exercisable at
$4.00 per share.
(6) These shares being registered for resale under this registration statement
are issuable upon exercise of outstanding warrants held by an individual
(Frederick P. Lutz), exercisable at $2.00 per share.
(7) These shares being registered for resale under this registration statement
are issuable upon exercise of outstanding warrants held by an individual
(Jason Wayne Assad), exercisable at $3.75 per share for 12,500 shares.
(8) These shares being registered for resale under this registration statement
are issuable upon exercise of two outstanding warrants to purchase a total
of 80,000 shares; the warrants are held by two individuals (Murray Roark
and Robert Craig, 40,000 shares each), exercisable at $4.30 per share.
(9) These shares being registered for resale under this registration statement
are (a) 33,208 shares issuable on (a) conversion of interest (at an assumed
4% annual rate for purposes of calculating the registration fee) on
$1,400,000 of principal outstanding on conversion of debt held by Caydal,
LLC and Tsunami Partners L.P., at a conversion rate of 1 share for each
$2.25 of interest; and (b) 122,222 shares issuable on conversion of the
principal outstanding on the debt, at a conversion rate of 1 share for each
$2.25 of principal, the 122,222 shares being the increased number of shares
issuable on conversion of principal due to decrease in the conversion to
the present rate from the original rate of $3.00. Resale of a total of
499,999 shares issuable on conversion of the original principal of the debt
($1,500,000) at a conversion rate of $3.00 has been registered previously
(333-103692); no shares issuable on conversion of interest were registered
for resale under that previous registration statement.
Pursuant to rule 457(c), registration fee calculations for shares
outstanding are estimated based on the $2.59 market value of the
registrant's common stock (Nasdaq Small Cap price on December 2, 2003),
which is within 5 business days prior to the initial filing of this
statement.
Pursuant to Rule 457(h)(1), the maximum proposed offerin price for shares
underlying warrants currently outstanding is based on the exercise price of
the warrants. The offering price (for purposes of fee calculation) for
shares issuable on exchange conversion of subsidiary stock is at a low
assumed price of $1.00 per share. The shares may be issued at a greater of
lesser price (see note (4) above).
3
The registration fee has been calculated by multiplying the proposed
aggregate offering price times the fee rate of $0.000092.
DELAYING AMENDMENT UNDER RULE 473(A): The registrant hereby amends this
registration statement on such date or dates as may be necessary to delay
its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall become
effective in accordance with section 8(a) of the Securities Act of 1933 or
until the registration statement shall become effective on such date as the
Commission acting pursuant to section 8(a), may determine.
The information in this prospectus is subject to completion or amendment.
The securities covered by this prospectus cannot be sold until the
registration statement filed with the Securities and Exchange Commission
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which an offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of that state.
4
U.S. ENERGY CORP.
1,104,898 SHARES OF COMMON STOCK
This prospectus covers the offer and sale of up to 202,593 shares of common
stock ($0.01 par value) by shareholders; up to 296,875 shares of common stock by
holders of warrants and options on exercise of the warrants and options; up to
450,000 shares which may be issued on exchange of outstanding common stock in
Rocky Mountain Gas, Inc. ("RMG"), a majority-owned subsidiary of USE) for common
stock of USE; and up to 155,430 shares which may be issued on conversion of
interest and principal on conversion of debt.
In this prospectus, "selling shareholder" or "selling shareholders" refers
to Caydal, LLC and five individuals who hold warrants to purchase stock in USE,
all of whom also purchased stock in RMG which may be exchanged for stock in USE;
an individual and four entities which hold outstanding stock in USE; twelve
individuals and five entities which hold warrants or options to purchase stock
in USE; and Caydal, LLC and Tsunami Partners L.P., which hold debt convertible
to stock in USE. For information about the selling shareholders, and the
transactions in which they acquired the various shares, options, warrants, and
rights to exchange RMG stock for USE stock, see "Selling Shareholders."
In this prospectus, and the information incorporated by reference, "we,"
"company," and "USE" refer to U.S. Energy Corp. (and its subsidiaries unless
otherwise specifically stated).
The selling shareholders may sell the shares from time to time in
negotiated transactions, brokers' transactions or a combination of such methods
of sale at market prices prevailing at the time of sale or at negotiated prices.
Although we will receive proceeds if and to the extent the options and warrants
are exercised, we will not receive any proceeds from sale of any of the shares
offered by the selling shareholders. None of the options or warrants have been
exercised at prospectus date.
USE is traded ("USEG") on the Nasdaq Small Cap Market ($2.59 on December
2, 2003).
AN INVESTMENT IN THE SHARES OFFERED BY THIS PROSPECTUS IS SPECULATIVE AND
SUBJECT TO RISK OF LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 9 AND THE TABLE OF
CONTENTS ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS DECEMBER ___, 2003.
5
TABLE OF CONTENTS
Page No.
Summary Information
The Company....................................................................8
The Offering...................................................................9
Risk Factors .................................................................10
Risk Factors Involving the Company.........................................10
Lack of coalbed methane production
and established reserves for the coalbed
methane properties may slow down
future exploration of these properties..................................10
Continued low gas prices for Powder River
Basin production may hurt our business..................................10
We may have to begin to curtail
operations if we don't raise
more capital by December 2004...........................................10
We are subject to certain kinds of risks
which are unique to the minerals business...............................10
Delays in obtaining permits for methane
wells could impair our business.........................................11
The company's poison pill could discourage
some advantageous transactions..........................................11
Compliance with environmental
regulations may be costly...............................................11
Commodity price fluctuations may be
difficult to manage and could cause losses..............................12
Future equity transactions, including exercise of
options or warrants, could result in dilution...........................12
Terms of subsequent financings may
adversely impact your investment........................................12
Risk Factor Involving This Offering........................................13
Representations About This Offering........................................13
6
Forward Looking Statements....................................................13
Description of Securities.....................................................14
Use of Proceeds...............................................................17
Selling Shareholders..........................................................17
Plan of Distribution..........................................................22
Disclosure of Commission Position on Indemnification..........................23
Where to Find More Information About Us.......................................24
Incorporation of Certain Information by Reference.............................24
Legal Matters.................................................................25
Experts.......................................................................25
7
SUMMARY INFORMATION
The following summarizes all material information found elsewhere in this
prospectus and the information incorporated into it by reference. This summary
is qualified by the more detailed information in this prospectus and the
information incorporated by reference.
THE COMPANY
U.S. Energy Corp. is a Wyoming corporation, formed in 1966, in the business
of acquiring, exploring, developing and/or selling or leasing mineral
properties, and the mining and marketing of minerals. We now are engaged in the
acquisition and exploration of coalbed methane gas properties, which is our
primary business focus. The only activities of a significant and recurring
nature are in coalbed methane, although from time to time we may drill
conventional gas wells where we or third parties are the operators.
We also hold mining properties, but these properties (uranium and a
property in Sutter Creek, California we bought for gold exploration) are shut
down. The most significant uranium properties are located on Sheep Mountain in
Wyoming, and in southeast Utah. We also hold a royalty interest in claims on
Green Mountain, Wyoming, now held by Kennecott Uranium Company (see below).
Interests are held in other mineral properties (principally molybdenum), but are
either non-operating interests or undeveloped claims. We know of no current
plans for the molybdenum property to be put into production (this property is
owned by Phelps Dodge). Small oil and gas operations in Montana are conducted as
well. Our fiscal year ends December 31.
The acquisition and exploration of coalbed methane properties is conducted
through Rocky Mountain Gas, Inc. ("RMG"). We own, together with Crested Corp.
("Crested") 89.2% of RMG, a Wyoming corporation. Crested is a 70.5%
majority-owned subsidiary of U. S. Energy Corp. (see below). Properties of RMG
are held in southeastern Montana and northeastern and southwestern Wyoming. In
April 2002, a lawsuit was filed challenging the validity of Bureau of Land
Management leases in Montana. Approximately 38% (72,211 acres) of RMG's total
gross acreage is leased from the BLM in Montana. See Item 3 (Legal Proceedings)
in the Form 10-K for the seven months ended December 31, 2002. The status of
this litigation will be updated in subsequent SEC filings.
We don't know if anything of value will result from our activities in the
coalbed methane area: Only a limited number of exploratory wells have been
drilled, and there is not yet enough information from these wells to determine
if they contain proved reserves; gas prices are lower in the Powder River Basin
(our area of activity) than nationwide gas prices; permitting issues may delay
further work; and more funding may be needed but not available.
USE and Crested originally were independent companies, with two common
affiliates (John L. Larsen and Max T. Evans, Mr. Evans is now deceased). In
1980, USE and Crested formed a joint venture, referred to as the USECC Joint
Venture, to do business together (unless one or the other elected not to pursue
an individual project). As a result of USE funding certain of Crested's
obligations from time to time (due to Crested's lack of cash on hand), and later
payment of debts by Crested issuing common stock to USE, Crested became a
majority-owned subsidiary of USE in fiscal 1993.
All of USE's and Crested's operations are in the United States. Principal
executive offices for USE and Crested are located in the Glen L. Larsen building
at 877 North 8th Street West, Riverton, Wyoming 82501, telephone 307.856.9271;
fax 307.857.3050.
Most of the company's (USE's) operations are conducted through
subsidiaries, the USECC joint venture with Crested, and various jointly-owned
subsidiaries of USE and Crested.
8
Until September 11, 2000, USE, Crested and Kennecott Uranium Company
("Kennecott"), owned the Green Mountain Mining Venture ("GMMV"), which held a
large uranium deposit and uranium mill in Wyoming. On September 11, 2000, USE
and Crested settled litigation with Kennecott involving the GMMV by selling
their interest in the GMMV and its properties back to Kennecott for $3.25
million and receiving a royalty interest in the uranium properties. Kennecott
also assumed all reclamation obligations on the GMMV properties. Other principal
uranium properties and a uranium mill in southeast Utah are held by Plateau
Resources Ltd., a wholly-owned subsidiary of USE. The Utah uranium properties
are shut down.
The property held by Sutter Gold Mining Company ("SGMC"), a majority-owned
subsidiary of USE, has been shut down so far as a prospective mining operation
is concerned, because the historical price of gold was too low to raise the
capital necessary to put the properties into production. Management is working
on plans to start mining activities at Sutter when financing can be obtained.
THE OFFERING
Securities Outstanding 12,670,097 shares of common stock, $0.01 par
value.
Securities To Be Outstanding 13,572,402 shares of common stock, $0.01 par
value, assuming the options and warrants on
296,875 shares held by the selling
shareholders were exercised as of the date of
this prospectus; the outstanding RMG stock is
exchanged for 450,000 shares of USE; and
155,430 shares are issued on conversion of
principal and interest on restructured debt (1
share for each $2.25 principal and interest).
The actual number of USE shares issued in
exchange for RMG stock will depend on the
market price for USE stock at conversion
dates. The number of shares issuable on
conversion of principal and interest on the
restructured debt does not include 466,667
shares issuable on conversion of the original
debt (principal only, 1 share for each $3.00
principal), before a restructuring of the debt
in October 2003 to extend maturity date,
reduce the interest rate, and reduce the
conversion price. Resale of the other 466,667
shares is covered by separate prospectus. See
"Description of Securities - Warrants,
Options, and Convertible Debt" and "Selling
Shareholders."
Securities Offered 1,104,898 shares of common stock owned or to
be owned by the selling shareholders.
Use of Proceeds We will not receive any proceeds from sale of
shares by the selling shareholders, but we
will receive up to $1,282,125 in proceeds from
exercise of the warrants and options, if they
are exercised, which will be used by the
company for working capital.
Plan of Distribution The offering is made by the selling
shareholders named in this prospectus, to the
extent they sell shares. Sales may be made in
the open market or in private negotiated
transactions, at fixed or negotiated prices.
See "Plan of Distribution."
Risk Factors An investment is subject to risk. See "Risk
Factors."
9
RISK FACTORS
An investment in our common stock is speculative in nature and involves a
high degree of risk. RISK FACTORS You should carefully consider the following
risks and the other information in this prospectus (including the information
incorporated by reference) before investing.
RISK FACTORS INVOLVING THE COMPANY
LACK OF COALBED METHANE PRODUCTION AND ESTABLISHED RESERVES FOR MOST OF THE
COALBED METHANE PROPERTIES MAY SLOW DOWN FURTHER EXPLORATION OF THESE
PROPERTIES. In June 2003, RMG transferred coalbed methane properties, including
RMG's only coalbed methane producing wells (the Bobcat property) to Pinnacle Gas
Resources, Inc.("Pinnacle") in exchange for an equity position in Pinnacle (see
the Form 8-K Reports filed with the SEC on July 15 and July 21, 2003). We will
not be receiving any more production revenues from these properties. As a result
we have no properties in production. No reserves have been established for any
of our properties, because we have not drilled and tested enough wells on the
properties to determine if we have economic reserves of coalbed methane in
place. For some properties, we will have to establish at least some reserve
parameters before gas transmission companies will build gas lines to our
properties, and construction of lines will depend also on then-current and
projected market prices for gas. If we have the necessary capital, we may elect
to build our own lines over to existing transmission lines near our properties
in the Powder River Basin in Wyoming and Montana. We can't sell production until
the lines and associated gathering lines and compression stations are
constructed.
Due to permitting delays in Montana, we may not realize production from
these Montana properties until mid-2004, or later. Other Wyoming properties
could be in production in 2004, but production might be delayed due to low
market prices for gas. Low market prices could delay gas purchasers from
building the necessary lines to move gas from our properties to the major gas
transmission lines.
These factors may make it difficult to raise the amount of capital needed
to further explore the coalbed methane production potential in our properties in
a rapid manner. Therefore, we may have to seek to raise capital. In the
meantime, we have only limited working capital. See below.
CONTINUED LOW GAS PRICES FOR POWDER RIVER BASIN PRODUCTION MAY HURT OUR
BUSINESS. For the six months ended June 30, 2003, RMG received an average price
of $3.90 per Million BTU (MMBtu) of gas produced from the Bobcat property, with
prices ranging from $3.04 to $4.66 per MMBtu. The energy content of CBM in the
Powder River Basin is close to one MMBtu per Mcf (from .96 to .98 MMBtu in 1.00
Mcf). The Bobcat property was transferred to Pinnacle Gas Resources, Inc. in
late June. See the Form 8-K Reports filed July 15 and 21, 2003. These prices
approximate what other producers in the area were receiving in the first six
months of 2003, and represent a negative price differential of approximately 35%
compared to the average price of approximately $6.00 per MMBtu received by
producers nationwide.
There is no guarantee that increased pipeline capacity planned or under
construction will eliminate the negative price differential or even
significantly reduce it.
Nationwide gas prices were $5.291 per MMBtu at July 2003 compared to $3.278
in July 2002. However, a return of sustained low gas prices would impair our
ability to raise capital for RMG and reduce revenues from production coming on
line. See the discussion under the caption "Gathering and Transmission of CBM
Gas" in the Form 10-K for the seven months ended December 31, 2002.
WE MAY HAVE TO BEGIN TO CURTAIL OPERATIONS IF WE DON'T RAISE MORE CAPITAL
BY DECEMBER 2004. At September 30, 2003, we had working capital of $2,500,000,
and an accumulated deficit of $42,300,000. Our current level of operations,
including general and administrative overhead, mineral
10
operations (primarily holding costs for the uranium and gold properties), and
costs to comply with lease and permitting obligations for the coalbed
properties, are estimated to cost $1.0 million for the three months ending
December 31, 2003. However, if we do not realize cash from liquidating assets,
or other sources, or if RMG spends more money on exploration than will be
covered by current arrangements, then under these circumstances additional
equity financing may be necessary to sustain operations through the fourth
quarter 2004. There are no current commitments for such future financing as may
be necessary.
Our strategy for RMG contemplates a total capital budget of up to $1.5
million through 2004 to continue exploring our coalbed methane properties. The
cash requirements for our coalbed methane business are in addition to working
capital requirements. Lack of production and established reserves may make it
difficult to raise this amount of money in the near future. Therefore, we may
have to seek to raise capital in smaller amounts over time, which efforts could
well extend into calendar 2005. See the preceding risk factor.
WE ARE SUBJECT TO CERTAIN KINDS OF RISK WHICH ARE UNIQUE TO THE MINERALS
BUSINESS. The exploration for and production of minerals is highly speculative
and involves risks different from and in some instances greater than risks
encountered by companies in other industries. Many exploration programs do not
result in the discovery of mineralization and any mineralization discovered may
not be of sufficient quantity or quality. Also, the mere discovery of promising
mineralization may not warrant production, because the minerals (including
methane gas) may be difficult or impossible to extract (produce) on a profitable
basis.
Profitability of any mining and production we may conduct will involve a
number of factors, including, but not limited to: The ability to obtain all
required permits; costs of bringing the property into production; the
construction of adequate production facilities; the availability and costs of
financing; keeping ongoing costs of production at economic levels, and market
prices for the metals or hydrocarbons to be produced staying above production
costs. Our properties, or properties we might acquire in the future, may not
contain deposits of minerals or coalbed methane gas that will be profitable to
produce.
In addition, all forms of mineral (and oil and gas and coalbed methane)
exploration and production require permits to have been issued by various
federal and state agencies. See below.
DELAYS IN OBTAINING PERMITS FOR METHANE WELLS COULD IMPAIR OUR BUSINESS.
Drilling and producing coalbed methane wells requires obtaining permits from
various governmental agencies. The ease of obtaining the necessary permits
depends on the type of mineral ownership and the state in which the property is
located. Intermittent delays in the permitting process can reasonably be
expected throughout the development of any property. For example, there is
currently a temporary moratorium for drilling coalbed methane wells on fee and
state lands in Montana. We may shift our exploration and development strategy as
needed to accommodate the permitting process. As with all governmental permit
processes, permits may not be issued in a timely fashion or in a form consistent
with our plan of operations.
THE COMPANY'S POISON PILL COULD DISCOURAGE SOME ADVANTAGEOUS TRANSACTIONS.
We have adopted a shareholder rights plan, also known as a poison pill (see
"Description of Securities"). The plan is designed to discourage a takeover of
the company at an unfair low price. However, it is possible that the board of
directors and the takeover acquiror would not agree on a higher price, in which
case the takeover might be abandoned, even though the takeover price was at a
significant premium to market prices. Therefore, as a result of the mere
existence of the plan, shareholders would not receive the premium price.
COMPLIANCE WITH ENVIRONMENTAL REGULATIONS MAY BE COSTLY. Our business
(mostly coalbed methane) is intensely regulated by government agencies. Permits
are required to drill and pump methane wells, explore for minerals, operate
mines, build and operate processing plants, and handle and store
11
waste. The regulations under which permits are issued change from time to time
to reflect changes in public policy or scientific understanding of issues. If
the economics of a project would not justify the changes, we might have to
abandon the project.
The company must comply with numerous environmental regulations on a
continuous basis, to comply with the United States Clean Air Act, the Clean
Water Act, the Resource Conservation and Recovery Act ("RCRA"), and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"). For
example, water and dust discharged from mines and tailings from prior mining or
milling operations must be monitored and contained and reports filed with
federal, state and county regulatory authorities. Additional monitoring and
reporting is required by the United States Nuclear Regulatory Commission for
uranium mills even if not currently operating (like the company's uranium mill
at Ticaboo, Utah). The Abandoned Mine Reclamation Act in Wyoming and similar
laws in other states where we have properties impose reclamation obligations on
abandoned mining properties, in addition to or in conjunction with federal
statutes.
Failure to comply with these regulations could result in substantial fines
and environmental remediation orders. For information on the company's bonding
requirements to date, see note K to the audited financial statements in the Form
10-K for the seven months ended December 31, 2002.
COMMODITY PRICE FLUCTUATIONS MAY BE DIFFICULT TO MANAGE AND COULD CAUSE
LOSSES. Gas, gold and uranium prices can be volatile. Sharp swings in market
prices make budgeting and operations more difficult. Sustained lower prices can
result in impairment of the financial value of the mineral property purchased as
well as the facilities built to process the material (such as mills or gas
compression stations). Hedging activities, if available for the commodity, can
protect against price swings but may result in locking a company into a lower
than market price over time.
FUTURE EQUITY TRANSACTIONS, INCLUDING EXERCISE OF OPTIONS OR WARRANTS,
COULD RESULT IN DILUTION. From time to time, the company sells restricted stock
and warrants, and convertible debt, to investors in private placements conducted
by broker-dealers, or in negotiated transactions. Because the stock is
restricted, the stock is sold at a greater discount to market prices compared to
a public stock offering, and the exercise price of the warrants sometimes is at
or even lower than market prices. These transactions cause dilution to existing
shareholders. Also, from time to time, options are issued to employees and third
parties, with exercise prices equal to market. Exercise of in-the-money options
and warrants will result in dilution to existing shareholders; the amount of
dilution will depend on the spread between market and exercise price, and the
number of shares involved. The company will continue to grant options to
employees with exercise prices equal to market price at the grant date, and in
the future may sell restricted stock and warrants, all of which may result in
dilution to existing shareholders.
For example, five of the selling shareholders have the right to convert
their investment in RMG stock into shares of USE stock, and sell the USE stock
pursuant to this prospectus. The conversion price is 77.5% of market price, but
not more than $5.00 per share. And, except for warrants on 75,000 shares
(warrants on 50,000 shares held by Sanders Morris Harris Inc. at $5.00 per
share, and warrants on 25,000 shares held by C.C.R.I. Corporation at $5.50 per
share), all of the options and warrants held by selling shareholders are
exercisable for less than $5.00 per share. For further information, see "Selling
Shareholders." To a greater or lesser extent depending on market price at the
time, these conversions and/or exercises of derivative securities could result
in dilution to current shareholders.
TERMS OF SUBSEQUENT FINANCINGS MAY ADVERSELY IMPACT YOUR INVESTMENT. We may
have to raise equity, debt or preferred stock financing in the future. Your
rights and the value of your investment in the common stock could be reduced.
For example, if we have to issue secured debt securities, the holders of the
debt would have a claim to our assets that would be prior to the rights of
stockholders until the debt is paid. Interest on these debt securities would
increase costs and negatively impact operating results. Preferred stock could be
issued in series from time to time with such designations, rights,
12
preferences, and limitations as needed to raise capital. The terms of preferred
stock could be more advantageous to those investors than to the holders of
common stock. In addition, if we need to raise more equity capital from sale of
common stock, institutional or other investors may negotiate terms at least and
possibly more favorable than the terms of this offering. Shares of common stock
which we sell could be sold into the market, which could adversely affect market
price. See "Risk Factor Involving This Offering" below.
RISK FACTOR INVOLVING THIS OFFERING
REGISTRATION FOR RESALE OF ADDITIONAL SHARES MAY DEPRESS MARKET PRICES.
From time to time, we have funded operations by selling restricted securities of
subsidiary companies for their operations, then later reacquired those
securities by exchange for shares and warrants of USE. For example, in January
2002, we issued 1,423,460 restricted shares of common stock in exchange for
restricted shares of Rocky Mountain Gas, Inc. and in conversion of preferred
stock of USE, for which the exchanging shareholders, and the holder of the
preferred stock, originally had invested $5,309,000. The shares of common stock
of USE were issued based on the market price of $3.92 per share on December 5,
2001, and the original investment amount for RMG and preferred stock, plus
$270,959 of interest owed three of the investors. Resale of these restricted
securities is covered by a registration statement on Form S-3, declared
effective by the SEC on April 4, 2003 (SEC file number 333-103692).
From time to time, we may sell more restricted shares in RMG (convertible
into company shares), or sell restricted shares in the company, to raise
capital. Registration for resale of such additional shares of the company could
adversely affect market prices for investors who buy shares in this offering.
REPRESENTATIONS ABOUT THIS OFFERING
We have not authorized anyone to provide you with information different
from that contained in this prospectus. This prospectus is not an offer to sell
nor does it seek an offer to buy the shares in any jurisdiction where this offer
or sale is not permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus (or any supplement), regardless
of when it is delivered or when any shares are sold.
FORWARD LOOKING STATEMENTS
We make statements in this prospectus which are considered to be "forward
looking" statements. All statements (other than statements of historical fact)
about financial and business strategy and the performance objectives of
management are forward-looking statements. These forward-looking statements are
based on the beliefs of management, as well as assumptions made by and
information currently available to them. These statements involve risks that are
both known and unknown, including unexpected economic and market factors,
failure to accurately forecast operating and capital expenditures and capital
needs (due to rising costs and/or different drilling and production conditions
in the field), changes in timing or conditions for getting regulatory approvals
to drill coalbed methane wells where needed, and other business factors. The use
of the words "anticipate," "believe," "estimate," "expect," "may," "will,"
"should," "continue," "intend" and similar words or phrases, are intended by us
to identify forward-looking statements (also known as "cautionary statements"
because you should be cautious in evaluating such statements in the context of
all the information in this prospectus and the information incorporated by
reference into this prospectus). These statements reflect our current views with
respect to future events. They are subject to the realization in fact of
assumptions, but what we now think will happen, may turn out much different, and
our assumptions may prove to have been inaccurate or incomplete.
The investment risks discussed under "Risk Factors" specifically address
all of the material risk factors that may influence future operating results and
financial performance. Those investment risks are
13
not "boiler plate" but are intended to tell you about the uncertainties and
risks inherent in our business at the present time which you need to evaluate
before making your investment decision.
In addition, you should note that this prospectus incorporates information
about the company which has been, and in the future will be, contained in
reports filed with the SEC. See "Incorporation of Certain Information by
Reference." Those reports will identify forward looking statements and specify
the risks to which those forward looking statements are subject. You should read
the reports carefully.
DESCRIPTION OF SECURITIES
COMMON STOCK. We are authorized by our articles of incorporation to issue
an unlimited number of shares of common stock, $0.01 par value, and 100,000
shares of preferred stock, $0.01 par value.
Shares of common stock may be issued for such consideration and on such
terms as determined by the board of directors, without shareholder approval.
Holders are entitled to receive dividends when and as declared by the board of
directors out of funds legally available therefore. There are no restrictions on
payment of cash dividends. Cash dividends have not been declared on the common
stock, although a 1 for 10 stock dividend was declared in November 1990. It is
anticipated that future earnings would be reinvested into operations and not
declared as dividends on the common stock. All holders of shares of common stock
have equal voting rights, and the shares of common stock sold in this offering
will have the same rights. Holders of shares of common stock are entitled to one
vote per share on all matters upon which such holders are entitled to vote, and
further have the right to cumulate their votes in elections of directors.
Cumulation means multiplying the number of shares held, by the number of
nominees to the board of directors, then voting the product among the nominees
as desired. Directors are elected by a plurality of the votes cast.
Shares of common stock sold in this offering are fully-paid and
nonassessable shares of U.S. Energy Corp.
Pursuant to our articles of incorporation and as permitted by Wyoming law,
shares of common stock held by our subsidiaries may be voted by such
subsidiaries as determined by the board of directors of each, in elections of
directors and other matters brought before shareholders.
In September 2001, the company adopted a shareholder rights plan ("poison
pill") and filed the plan with the Securities and Exchange Commission as an
exhibit to Form 8-A. The following three paragraphs briefly state principal
features of the plan, which are qualified by reference to the complete plan,
which is incorporated by reference into this prospectus.
Under the plan, the holder of each share of common stock has the right to
purchase (when the rights become exercisable) from the company one-one
thousandth (1/1,000th) of one (1) share of Series P preferred stock at a price
of $200.00 for each one-one thousandth (1/1,000th) share of such preferred
stock. The purpose of the plan is to deter an unfairly low priced hostile
takeover of the company, by encouraging a hostile party to negotiate a fair
offer with the board of directors and thus eliminate the poison pill.
The rights trade with the common stock and aren't separable therefrom; no
separate certificate for the rights is issued unless and until there is a
hostile takeover attempted, after which time separate and tradable rights
certificates would be issued.
The rights are not exercisable and never can be unless and until a hostile
(not negotiated with the board) takeover of the company is initiated with the
objective of acquiring 15% of the company's voting stock. If before the takeover
is launched the hostile party comes to agreement with the board of directors
about price and terms and makes a "qualified offer" to buy the stock of the
company, then the board of
14
directors may redeem (buy back) the rights for $0.01 each. But, if such a
"qualified offer" isn't agreed upon, then the rights are exercisable for
preferred stock, which in turn would enable the holder to convert the preferred
stock into voting common stock of the company at a price equal to one-half the
market price.
PREFERRED STOCK. Shares of preferred stock may be issued by the board of
directors with such dividend, liquidation, voting and conversion features as may
be determined by the board of directors without shareholder approval. In June
2000, we established a Series A Convertible Preferred Stock, for which 1,000
shares of preferred stock were reserved for sale at $10,000 per share and 200
shares were issued and outstanding at November 30, 2001. In January 2002, we
converted the 200 outstanding shares of Series A stock by issuing 513,140 shares
of restricted common stock to the holder, based on $2,000,000 invested plus
$11,507 of interest (annual rate of 7.5%) which accrued in December 2001
(previous interest had been paid in cash), divided by $3.92 (market price for
USE stock on December 5, 2001).
WARRANTS, OPTIONS, AND CONVERTIBLE DEBT. As of the date of this prospectus,
warrants and options (to persons or entities other than employees, officers or
directors of the company) are issued and outstanding to purchase a total of
744,224 shares of common stock, and $1,400,000 of outstanding principal, plus
interest, on two loans is convertible to 653,945 shares (resale of 466,666
shares are covered by separate prospectus, and resale of the balance of 155,430
shares is covered by this prospectus). Resales of 296,875 shares underlying
warrants and options are covered by this prospectus (see "Selling
Shareholders"). Resales of 447,349 shares underlying other warrants and options
are covered by separate prospectuses.
o Options to purchase 18,000 shares at $3.00 held by Robert A. Nicholas,
issued February 3, 2003 and expiring February 2, 2004, issued as partial payment
for legal services. Resale of shares acquired on exercise of these options is
covered by a separate resale prospectus.
o Options issued February 8, 1999 to purchase 75,000 shares at $2.25 per
share (expiring February 8, 2004), are held by former consultant Michael Baybak.
Resale of the shares acquired on exercise of these options is not covered by a
resale prospectus, and the company does not intend to file a registration
statement for resale of these shares.
o Warrants to purchase 120,000 shares at $3.00 held by Caydal, LLC, issued
on May 30, 2002 and expiring May 30, 2006, issued in connection with a
convertible loan to the company from Caydal. The current principal balance on
this loan now is convertible to 400,000 shares (see below). A separate
prospectus covers resale of shares acquired on exercise of the warrants, and
300,000 of the shares issuable on conversion of the principal of the loan.
Additional shares now are issuable due to debt restructuring, see the next
paragraph.
This prospectus covers a total of 88,014 additional shares now issuable and
issuable in the future, to Caydal on conversion of principal (due to a reduced
conversion price), and interest on principal, as follows: The original 2002
transaction with Caydal provided for conversion of the original principal amount
of the loan ($1,000,000), but not interest, to shares at a conversion rate of 1
share for each $3.00 of principal. Prior to the date of this prospectus, Caydal
converted $100,000 of the principal to 33,333 shares. On October 28, 2003, the
company and Caydal amended the loan to (i) reduce the interest rate, starting
September 1, 2003, from the original 8% annual rate, to be equal to the Federal
Short Term Rate for annual compounding (the "Federal Short Term Rate" as defined
in section 1274(d) of the Internal Revenue Code), as that rate changes from time
to time; (ii) allow conversion of interest, as well as principal, to shares;
(iii) not require quarterly payment of interest with cash, but add accruing
interest to principal; (iv) extend the maturity date for the loan to December
31, 2004; (v) reduce the conversion rate for principal to (and establish the
conversion rate for interest at) 1 share for each $2.25 of principal and
interest; and (vi) provide for mandatory conversion of principal and accrued
interest outstanding at maturity to shares at the same conversion rate of 1
share for each $2.25 of principal and interest. Optional
15
conversion of principal and accrued interest prior to maturity is permitted.
Also, in connection with the restructuring of debt, the expiration date of the
warrants issued to Caydal was extended 12 months (from the original May 30, 2005
to the new date of May 30, 2006). The debt transaction with Tsunami Partners
L.P. also was restructured on October 28, 2003 (see below), on the same terms as
Caydal's debt.
o Warrants to purchase 60,000 shares at $3.00 held by Tsunami Partners,
L.P., issued on November 19, 2002 and expiring November 19, 2006, issued in
connection with a $500,000 convertible loan to the company from Tsunami, L.P.
The principal amount of this loan now is convertible to 222,222 shares. A
separate prospectus covers resale of shares acquired on exercise of the warrants
and 166,667 shares issuable on conversion of the principal of the loan is
covered by a separate resale prospectus.
This prospectus covers a total of 67,416 additional shares now issuable and
issuable in the future, to Tsunami on conversion of principal (due to a reduced
conversion price), and interest on principal, as follows: The original 2002
transaction with Tsunami provided for conversion of the original principal
amount of the loan ($500,000), but not interest, to shares at a conversion rate
of 1 share for each $3.00 of principal. On October 28, 2003, the company and
Tsunami amended the loan to (i) reduce the interest rate, starting September 1,
2003, from the original 8% annual rate, to be equal to the Federal Short Term
Rate for annual compounding (the "Federal Short Term Rate" as defined in section
1274(d) of the Internal Revenue Code), as that rate changes from time to time;
(ii) allow conversion of interest, as well as principal, to shares; (iii) not
require quarterly payment of interest with cash, but add accruing interest to
principal; (iv) extend the maturity date for the loan to December 31, 2004; (v)
reduce the conversion rate for principal to (and establish the conversion rate
for interest at) 1 share for each $2.25 of principal and interest; and (vi)
provide for mandatory conversion of principal and accrued interest outstanding
at maturity to shares at the same conversion rate of 1 share for $2.25 of
principal and interest. Optional conversion of principal and accrued interest
prior to maturity is permitted. Also, in connection with the restructuring of
debt, the expiration date of the warrants issued to Tsunami was extended 12
months (from the original May 30, 2005 to the new date of May 30, 2006).
o Warrants to purchase 56,383 shares at $4.00 per share, held by 16
investors who purchased shares and warrants in private transactions with the
company in February and March, 2002. These warrants were issued in February and
April 2002, and will expire two years after issuance. Resale of the shares
acquired on exercise of these options is covered by a separate resale
prospectus.
o Warrants to purchase 14,799 shares at $3.00 held by 32 persons who own
equity interests in McKim & Company, LLC (formerly VentureRound Group), a
licensed broker-dealer, which served as financial advisor in connection with the
Tsunami loan transaction. The warrants were issued as of November 19, 2002,
expiring on November 19, 2005. Resale of shares acquired on exercise of these
warrants is covered by a separate resale prospectus.
o Warrants to purchase 29,559 shares at $3.00 held by 29 persons who own
equity interests in McKim & Company, which served as financial advisor in
connection with the Caydal loan transaction. The warrants were issued as of May
30, 2002, expiring on May 30, 2005. Resale of shares acquired on exercise of
these warrants is covered by a separate resale prospectus.
o Warrants to purchase 27,813 shares at $4.00 held by 34 persons who own
equity interests in McKim & Company, issued as of March 25, 2002, expiring on
March 25, 2004. McKim & Company served as the financial advisor to the company
in connection with the private transactions in February and March 2002. Resale
of shares acquired on exercise of these warrants is covered by a separate resale
prospectus.
o Warrants to purchase 35,966 shares at $3.75 held by 7 persons who own
equity interests in McKim & Company, which served as the financial advisor to
the company in connection with the private transactions from June to October
2001 (see above). These warrants were issued as partial compensation
16
for services provided to the company by persons who own equity interests in
McKim & Company, which services were provided by licensed brokers. These
warrants were issued as of October 18, 2001 and expire October 18, 2006. Resale
of shares acquired on exercise of these warrants is covered by a separate resale
prospectus.
o Warrants to purchase 9,829 shares at $3.75 held by 21 persons who own
equity interests in McKim & Company. These warrants were issued for financial
consulting services provided by persons who own equity interests in McKim &
Company. The services were provided by licensed brokers. These warrants were
issued as of November 2, 2001 and expire November 2, 2006. Resale of shares
acquired on exercise of these warrants is covered by a separate resale
prospectus.
OPTIONS. USE has granted options to employees, officers and directors to
purchase shares at exercise prices from $2.00 to $3.90 per share. At November 3,
2003, a total of 3,233,985 shares may be issued upon exercise of these options.
These options expire at various times from 2008 to 2012.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling shareholders pursuant to this prospectus, but we will receive up to
$1,282,125 in proceeds from the exercise of the options and warrants, if they
exercise all the options and warrants, (pursuant to which the shares underlying
such options and warrants will be sold pursuant to this prospectus), which will
be used by the company for working capital.
SELLING SHAREHOLDERS
This prospectus covers the offer and sale by the selling shareholders of up
to 1,104,898 shares of common stock ($0.01 par value) owned or to be owned on
exercise of options and warrants by the selling shareholders, on conversion of
RMG stock, and conversion of debt. The footnotes to the table below give
information about shares issuable on exercise of the options and warrants by the
selling shareholders. All shares issued (and all shares issuable on exercise of
options and warrants, and conversion of RMG stock) are (and will be) restricted
securities as that term is defined in rule 144 of the Securities and Exchange
Commission under the Securities Act of 1933, and will remain restricted unless
and until such shares are sold pursuant to this prospectus, or otherwise are
sold in compliance with rule 144 or the restriction removed in accordance with
rule 144(k).
None of the selling shareholders are affiliates of the company or any
subsidiary of the company.
The shares covered by this prospectus, and the transactions in which the
selling shareholders acquired their shares (or options or warrants), are
summarized below:
o 1,913 shares were issued to Dale May and his wife Jeanne May in March 2002,
in exchange for 2,500 RMG shares which were issued to Mr. May in January
2002 as a finder's fee for his introduction to RMG of several investors.
Mr. May has represented to the company that he is not a securities 'dealer'
as that term is defined in the Securities Act of 1933.
o 50,000 shares, and warrants to purchas an additional 50,000 shares
(exercisable at $5.00 per share, expiring June 30, 2006), were issued to
Sanders Morris Harris Inc. ("SMH"), a financial advisory firm, in partial
payment of SMH's services provided to RMG in connection with RMG's transfer
of certain coalbed methane properties to Pinnacle Gas Resources, Inc. See
"Incorporation of Certain Information by Reference" (Form 8-K filed July
15, 2003).
o 7,920 shares were issued to Riches In Resources, Inc., a financial
consulting firm, for services to the company provided from November 15,
2002 through July 15, 2002. Up to another 7,080
17
shares may be issued for services during the remaining term of the
agreement (through May 15, 2004) with this consultant. This consulting
agreement was entered into on May 30, 2003.
o 12,000 shares were issued to C.C.R.I. Corporation, a financial consulting
firm, under an agreement entered into May 30, 2003, for services to the
company provided through July, 2003. Another 12,000 shares were issued for
services provided for the months of July, August and September 2003, but
resale of these additional 12,000 shares is not covered by this prospectus.
Pursuant to the same agreement, the company issued to C.C.R.I. warrants to
purchase 75,000 shares, 25,000 exercisable at $3.75 per share, 25,000
shares exercisable at $4.50 per share and 25,000 shares exercisable at
$5.50 per share; and issued to an individual (Jason Wayne Assad) associated
with C.C.R.I. a warrant to purchase 12,500 shares, exercisable at $3.75 per
share. All of these warrants expire March 16, 2006.
o 59,000 shares were issued to Burg Simpson Eldredge Hersh Jardine PC, a law
firm representing the company in litigation, in partial payment of legal
services provided to the company. 25,000 of these shares were issued in May
and July 2002, and 34,000 shares were issued in July 2003.
o 10,000 shares were issued to Tim and Beth Crotty in June of 2003 as
settlement of a lease obligation relating to a property owned by the
Company's subsidiary, Sutter Gold Mining Company.
o 12,500 shares were issued to Robert Hockert and 25,000 shares to Mathew B.
Murphy in May of 2002 as partial payment of producing coalbed methane
properties.
o 24,260 shares were issued to James and Vida Roebling as payment for a
coalbed methane lease. These shares were issued in December of 2001 and
January 2002.
o In 2002, the company borrowed $1,000,000 from Caydal, LLC and $500,000 from
Tsunami Partners L.P.; $900,000 presently is outstanding on the debt to
Caydal. The principal amount of the debt, and accruing interest, is
convertible into shares of the company, at the rate of 1 share for each
$2.25 of principal and interest. See "Description of Securities - Warrants,
Options, and Convertible Debt." Resale of a total of up to 155,430 shares
which will be issued to Caydal and Tsunami on conversion of the debt is
covered by this prospectus. Fewer shares may be issued on conversion of
interest if the rate paid is less than the assumed annual rate of 4%.
Resale of the balance of 466,667 shares which may be issued on conversion
of the debt is covered by separate prospectus.
o In June and July 2003, Caydal, LLC and five individuals invested $750,000
in RMG for 333,333 shares of RMG stock (at $2.25 per share); warrants on
62,500 RMG shares at $3.00 per share, exercisable until June 3, 2006; and
warrants on 46,875 shares of the company at $4.00 per share, exercisable
until June 3, 2006. Under the terms of the original transaction, each share
of RMG stock was convertible into that number of shares of the company
obtained by dividing (i) $2.25 (subject to anti-dilution adjustments) by
(ii) 85% of the then-current market price of the company's shares, provided
that (a) the conversion price cannot exceed $5.00, and (b) the exchange
rights expire 20 business days after the company's stock price exceeds
$7.50 for 20 consecutive trading days.
On October 28, 2003, Caydal and one individual (James McCaughey) accepted
the company's and RMG's offer, made to all of the 2003 investors in RMG, to
restructure the transaction by (i) refunding 50% of the investment (Caydal
was refunded $250,000 and Mr. McCaughey was refunded $50,000), and reducing
the conversion rate for their remaining total of 133,333 RMG shares down to
77.5%. The other four individuals elected to remain fully invested, for
which
18
election the company and RMG reduced the conversion rate for their
remaining total of 66,666 RMG shares down to 70%.
For example, if the company's stock price was $5.00 on conversion date, the
conversion price for Caydal's and Mr. McCaughey's shares would be $3.875,
resulting in the issue to them of a total of 77,420 shares of the company.
The conversion price for the other investors would be $3.50, resulting in
the issue to them of a total of 42,857 shares of the company. Note that
this prospectus covers the resale of up to 450,000 shares of the company on
conversion of RMG shares, which is the number of the company's shares which
would be issued if the company's stock price was $1.29 on conversion date
(i.e., using an assumed conversion price of $1.00 per share). The actual
number of the company's shares issued will depend on market price at
conversion dates. The RMG shares issuable on exercise of the RMG warrants
are not entitled to conversion into USE shares.
o In partial compensation for services provided by McKim & Company, LLC (a
registered broker- dealer, formerly named VentureRound Group) to RMG and
USE in connection with the investments in RMG, USE issued to McKim &
Company warrants to purchase 19,500 shares of USE common stock, exercisable
at $4.00 per share. The warrants expire June 6, 2006. Warrants to purchase
an additional 3,000 shares, on the same terms, were issued to John Schlie,
an employee of McKim & Company.
o Warrants to purchase 10,000 shares wer issued to Frederick P. Lutz in
partial compensation for consulting services he provided to the company
from August 1, 2002 to January 1, 2003. The warrants are exercisable at
$2.00 per share, and expire August 1, 2005.
o Two options to purchase a total of 80,000 shares were issued to two
individuals (Murray Roark and Robert Craig, 40,000 shares each),
exercisable at $4.30 per share and expiring July 31, 2006. These options
were issued to compensate Mr. Roark and Mr. Craig as finders for their
introducing RMG to Carrizo Oil & Gas, Inc. in early July 2001. Mr. Roark
and Mr. Craig are licensed securities brokers. Since July 2001, RMG has had
an agreement with a subsidiary of Carrizo for the acquisition and
exploration of coalbed methane properties in Wyoming and Montana.
The selling shareholders may offer their shares for sale on a continuous
basis pursuant to rule 415 under the 1933 Act.
The following information has been provided to us by the selling
shareholders. Except for Caydal, LLC and Tsunami Partners L.P., all numbers of
shares, and percentage ownership, are stated on a pro forma basis as of November
3, 2003, assuming issuance of 296,875 shares upon exercise of all options and
warrants listed above, issuance of 450,000 shares upon conversion of the RMG
shares, and the conversion of debt and interest owed Caydal and Tsunami into
155,430 shares.
The number of shares and percentage ownership for Caydal, LLC and Tsunami
Partners L.P. are stated on a pro forma basis assuming conversion of all debt
owed to them by the company and exercise of warrants on 180,000 shares held by
them. There are 12,738,673 shares issued and outstanding as of November 3, 2003;
on a pro forma basis (not including shares issuable on conversion of debt, or
exercise of warrants on 180,000 shares, held by Caydal and Tsunami), there are
13,572,402 shares outstanding. Additional shares issuable on exercise of other
options and warrants held by persons who are not selling shareholders, are not
included in the pro forma calculation.
19
Shares
Shares of of Common Stock Percent Owned
Name and Address Common Stock Registered Prior to After
of Beneficial Owner Owned(1) For Sale Offering Offering(2)
-----------------------------------------------------------------------------------------------------------
Dale S. and Jeanne L. May, 1,913 1,913 * *
JTWROS
960 Point of the Pines Drive
Colorado Springs, CO 80919
Sanders Morris Harris Inc. 100,000(10) 100,000 * *
600 Travis, Suite 3100
Houston, TX 77002
Riches In Resources 22,930 7,920 * *
1433 Oakleaf Circle
Boulder, CO 80304
C.C.R.I. Corporation 87,000(9) 87,000 * *
3104 E. Camelback Rd.
Suite 539
Phoenix, AZ 85016
Jason Wayne Assad 12,500(9) 12,500 * *
6585 Sterling Drive
Suwanee, GA 30024
Burg Simpson Eldridge Hersh Jardine P.C. 59,000 59,000 * *
40 Inverness Dr. East
Englewood, CO 80112
Timothy and Betty Crotty 10,000 10,000 * *
13575 Ridge Road
Sutter Creek, CA 95685
Robert Hockert 12,500 12,500 * *
Petro Pacific Corporation
3212 Fitzpatrick Drive
Gillette, WY 82718
Matthew Murphy 25,000 25,000 * *
P.O. Box 1581
3105 E. 2nd Street
Gillette, WY 82717-1581
James and Vida Ann Roebling 24,260 24,260 * *
P.O. Box 71
Clearmont, WY 82835
Caydal, LLC 822,598(3)(4) 369,264 6.5% 6.0%
410 Marion Street
Denver, Colorado 80218
Tsunami Partners, L.P. 520,750(5) 294,083 3.7% 1.6%
2011 Cedar Springs Rd., Apt. 506
Dallas, TX 75201
20
Beverly Karns 106,250(3) 106,250 * *
5424 South Geneva Way
Englewood, CO 80111
Linda Monahan & Donald 41,875(3) 41,875 * *
R. Cotner, JTWROS,
224 Anglers Drive South
Marathon, FL 33050
James McCaughey 56,250(3) 56,250 * *
3 Cueta Drive
Rancho Mirage, CA 92270
William G. Van Buren 21,250(3) 21,250 * *
6576 Fairview Ave.
Downers Grove, IL
McKim & Company, LLC 19,500(6) 19,500 * *
8400 E. Crescent Parkway
Suite 600
Greenwood Village, CO 80111
John Schlie 3,000(6) 3,000 * *
2406 West Davies Ave.
Littleton, CO 80120
Frederick P. Lutz 10,000(8) 10,000 * *
1089 Dunbarton Chase
Atlanta, Georgia 30319
Murray B. Roark 40,000(7) 40,000 * *
4400 Post Oak Parkway
Suite 1720
Houston, TX 77027
Robert S. Craig 40,000(7) 40,000 * *
4400 Post Oak Parkway
Suite 1720
Houston, TX 77027
* Less than 1%.
(1) Includes shares underlying warrants or options which may not have yet been
exercised and are not covered by this resale prospectus.
(2) Assumes all shares registered for resale under this prospectus are sold by
the selling shareholder.
(3) Includes shares issuable upon conversion of RMG stock an warrants
exercisable at $4.00 per share, covered by this prospectus.
(4) Includes 421,348 shares isssuable on conversion of principal and interest
on a note, and 151,250 shares on exercise of warrants. Resale of 300,000 of
the note conversion shares, and 120,000 of the warrant shares, are covered
by separate prospectus (SEC File No. 333-103692). Does not include 10,000
shares issuable on exercise of a warrant held by Kevin Daly, an affiliate
of Caydal, LLC.
21
(5) Includes 234,083 shares issuable on conversion of principal and interest on
a note, and 60,000 shares on exercise of warrants. Resale of 166,667 of the
note conversion shares, and 60,000 of the warrant shares, are covered by
separate prospectus (SEC File No. 333-103692).
(6) Includes shares issuable on exercise of warrants at $4.0 per share.
(7) Shares issuable on exercise of warrants at $4.30 per share.
(8) Shares issuable on exercise of warrants at $2.00 per share.
(9) Includes shares issuable on exercise of warrants at prices from $3.75 to
$5.50 per share, for the warrants held by C.C.R.I., and at $3.75 for the
warrants held by Mr. Assad.
(10) Shares issuable on exercise of option at $5.00 per share.
The shares owned or to be owned by the selling shareholders are registered
under rule 415 of the general rules and regulations of the Securities and
Exchange Commission, concerning delayed and continuous offers and sales of
securities. In regard to the offer and sale of such shares, we have made certain
undertakings in Part II of the registration statement of which this prospectus
is part, by which, in general, we have committed to keep this prospectus current
during any period in which the selling shareholders make offers to sell the
covered securities pursuant to rule 415.
PLAN OF DISTRIBUTION
The selling shareholders and any of their pledges, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling
shares:
O ordinary brokerage transactions and transaction in which the
broker-dealer solicits purchasers;
O block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
O purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
O an exchange distribution in accordance with the rules of the
applicable exchange;
O privately negotiated transactions;
O short sales (sales of shares not owned in hopes of a decline in market
price so the seller can purchase in the market at a lower price to be
able to deliver the shares sold);
O broker-dealers may agree with the selling shareholder to sell a
specified number of such shares at a stipulated price per share;
O a combination of any such methods of sale; and
O any other method permitted pursuant to applicable law.
22
The selling shareholders also may resell all or a portion of the shares in
open market transactions in reliance upon rule 144 under the 1933 Act, provided
they meet the criteria and conform to the requirements of the rule.
The selling shareholders may also engage in short sales against the box (a
short sale where the seller borrows the stock from a third party, hoping the
market price will decline), puts and calls and other transactions in securities
of the company or derivatives of company securities, and may sell or deliver
shares in connection with these trades. The selling shareholders may pledge
their shares to their brokers under the margin provisions of customer
agreements. If a selling shareholder defaults on a margin loan, the broker may,
from time to time, offer and sell the pledged shares. The selling shareholders
have advised the company that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their his shares other than ordinary course brokerage arrangements,
nor is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling shareholders.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
We are required to pay all fees and expenses incident to the registration
of resale of the shares covered by this prospectus. However, all discounts,
commissions or fees incurred in connection with the sale of the shares offered
hereby will be paid by the selling shareholders. The company has agreed to
indemnify the selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the 1933 Act. We have been advised that
in the opinion of the Securities and Exchange Commission, indemnification for
liabilities under the 1933 Act is against public policy, and therefore is
unenforceable. See below.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
23
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
company pursuant to the foregoing provisions, or otherwise (for example, in
connection with the sale of securities), we have been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the 1933 Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the company of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Securities Act, and will be
governed by the final adjudication of such issue.
WHERE TO FIND MORE INFORMATION ABOUT US
We have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 under the 1933 Act with
respect to the shares offered by this prospectus. This prospectus, filed as a
part of the registration statement, does not contain certain information
contained in part II of the registration statement or filed as exhibits to the
registration statement. We refer you to the registration statement and exhibits
which may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. The
registration statement and exhibits also are available for viewing at and
downloading from the EDGAR location within the Commission's internet website
(http://www.sec.gov).
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Our common stock is registered with the Commission under section 12(g) of
the Securities Exchange Act of 1934 (the "1934 Act"). Under the 1934 Act, we
file with the Commission periodic reports on Forms 10-K, 10-Q and 8-K, and proxy
statements, and our officers and directors file reports of stock ownership on
Forms 3, 4 and 5. These filings may be viewed and downloaded from the
Commission's internet website (http://www.sec.gov) at the EDGAR location, and
also may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. Information
on the operation of the Public Reference Room can be obtained by calling the
Commission at 1.800.SEC.0330.
All of the information contained in the following documents filed with the
Commission is incorporated by reference into this prospectus:
o Form 10-K for seven months ended December 31, 2002 filed April 1,
2003;
o Quarterly Report on Form 10-Q for the nine months ended September 30,
2003 (filed November 14, 2003);
o Proxy Statement for June 2002 Annual Shareholders Meeting (filed April
25, 2003);
o Forms 8-K: Restructuring of debt and investments in RMG, and
concerning Phelps Dodge Corporation litigation (filed November 20,
2003; filing Notice of Cross-Appeal to the 10th Circuit Court of
Appeals, appealing District Court Orders entered in July, August and
September 2003 in the Nukem litigation (filed November 12, 2003);
receipt of $2.9 million surplus cash released from an existing cash
reclamation bond on the Ticaboo uranium property, by approval from
Nuclear Regulatory Commission (filed November 5, 2003); Court Orders
denying motions filed in Nukem litigation (filed September 19,
24
2003); motions filed in Nukem litigation (filed August 27, 2003); sale
of commercial properties in Utah (filed August 15, 2003); Court Order
in favor of USE and Crested, against Nukem, Inc. (filed August 1,
2003); transaction with Pinnacle Gas Resources, Inc. (filed July 15,
2003), and additional information concerning the Pinnacle transaction
(filed July 21, 2003); letter of intent to sell Ticaboo, Utah
commercial properties (filed June 24, 2003); briefing schedule
relating to motions filed and to be filed regarding the special
master's accounting report on the Nukem litigation (filed May 29,
2003); receipt of the special master's accounting report (filed May
12, 2003); RMG's letter of intent on earn-in-joint venture with Gastar
Exploration (filed May 12, 2003); extension of RMG's option to
purchase properties, and extension of time for special master to file
accounting report (filed April 9, 2003); and reporting adoption in
calendar 2001 of a "shareholder rights plan" also commonly known as a
"poison pill" (filed September 20, 2001); and
o Form 8-A (filed September 20, 2001) registering the preferred stock
purchase rights (in connection with the shareholder rights plan).
The SEC file number for all of these filings is 000-06814.
All of the information which will be contained in our future Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statements, and Reports on
Form 8-K, and any other filings we make pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act, all after the date of this prospectus, also are
incorporated by reference into this prospectus as of the dates when such
documents are filed with the Commission.
We will provide to you copies of any or all of the information in these
documents, and any exhibits to them, without charge, upon request addressed to
U.S. Energy Corp., 877 North 8th West, Riverton, Wyoming 82501, attention Daniel
P. Svilar, Secretary. You also may request these documents by telephone:
1.307.856.9271. Our internet address is www.useg.com. Our 1934 Act filings are
not directly available through our internet address (website), but you can
access those filings through the link to Nasdaq at our internet address
(website).
LEGAL MATTERS
The validity of the issuance of the shares offered has been passed upon by
The Law Office of Stephen E. Rounds, Denver, Colorado.
EXPERTS
Our consolidated balance sheets as of December 31, 2002, May 31, 2002 and
2001, and the related consolidated statements of operations, shareholders'
equity and cash flows for the seven months ended December 31, 2002 and each of
the two years in the period ended May 31, 2002, have been audited by Grant
Thornton LLP, and are included, with the audit report from Grant Thornton LLP,
in the Annual Report on Form 10-K for the seven months ended May 31, 2002 in
reliance upon the authority of such firm as experts in accounting and auditing.
Our consolidated balance sheet as of May 31, 2000 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the year ended May 31, 2000, have been audited by Arthur Andersen LLP, and are
included along with the audit report of Arthur Andersen LLP, in the Annual
Report on Form 10-K for the seven months ended December 31, 2002, as amended, in
reliance upon the authority of such firm as experts in giving said report.
Arthur Andersen LLP has not consented to the incorporation by reference of their
report in this prospectus, and we have dispensed with the requirement to file
their consent in reliance upon rule 437a of the Securities Act of 1933. Because
Arthur Andersen LLP has not consented to the incorporation by reference of their
report in this prospectus, you will not be able to recover against Arthur
Andersen LLP under Section 11 of the Securities Act of 1933 for any untrue
statements of a material fact contained in the financial statements audited by
Arthur Andersen LLP or any omissions to state a material fact required to be
stated therein.
25
1,138,232 SHARES COMMON STOCK
U.S. ENERGY CORP.
-------------------
PROSPECTUS
--------------------
___________________, 2003
No dealer, salesman or other person is authorized to give any information
or make any information or make any representations not contained in the
prospectus with respect to the offering made hereby. This prospectus does not
constitute an offer to sell any of the securities offered hereby in any
jurisdiction where, or to any person to whom it is unlawful to make such an
offer. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that there has been no
change in the information set forth herein or in the business of our company
since the date hereof.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
securities being registered:
Securities and Exchange Commission registration fee...................$ 239.81
National Association of Securities Dealers, Inc. examination fee...... n/a
Accounting ........................................................... 2,000.00
Legal fees and expenses............................................... 4,000.00
Printing ............................................................. n/a
Blue Sky fees and expenses ........................................... n/a
Transfer agent ....................................................... n/a
Escrow agent.......................................................... n/a
Miscellaneous......................................................... n/a
Total.................................................................$ 6,239.81
The Registrant will pay all of these expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
27
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
SEQUENTIAL
EXHIBIT NO. TITLE OF EXHIBIT PAGE NO.
----------- ---------------- ----------
3.1 USE Restated Articles of Incorporation........................[2]
3.1(a) USE Articles of Amendment to
Restated Articles of Incorporation............................[4]
3.1(b) USE Articles of Amendment (Second) to
Restated Articles of Incorporation
(Establishing Series A Convertible Preferred Stock............[9]
3.1(c) Articles of Amendment (Third) to
Restated Articles of Incorporation
(Increasing number of authorized shares).....................[14]
3.2 USE Bylaws, as amended through April 22, 1992.................[4]
4.1 Amendment to USE 1998 Incentive
Stock Option Plan (To include Family
Transferability of Options Under SEC Rule 16b)...............[11]
4.2 USE 1998 Incentive Stock Option Plan
and Form of Stock Option Agreement 1/99.......................[8]
4.3 USE Restricted Stock Bonus Plan,
as amended through 2/94.......................................[5]
4.4 Form of Stock Option Agreement, and Schedule
Options Granted January 1, 1996...............................[6]
4.5 Form of Stock Option Agreement and Schedule,
Options Granted January 10, 2001.............................[11]
4.6 [intentionally left blank]
4.7 USE 1996 Officers' Stock Award Program (Plan).................[7]
4.8 USE Restated 1996 Officers' Stock Award Plan and
Amendment to USE 1990 Restricted Stock Bonus Plan.............[7]
4.9 Form of USE Warrant held by investors
in RMG (Caydal, LL 31,250, Karns-6,250,
Monahan/Cotner-1,875, Van Buren-1,250,
2nd McCaughey-6,250)............................................*
4.10 [intentionally left blank]
28
4.11 Rights Agreement, dated as of September 19, 2001
between U.S. Energy Corp. and Computershare
Trust Company, Inc. as Rights Agent. The Articles of
Amendment to Articles of Incorporation creating the
Series P Preferred Stock is included herewith as an
exhibit to the Rights Agreement.
Form of Right Certificate (as an exhibit to the
Rights Agreement).
Summary of Rights, which will be sent to all holders of
record of the outstanding shares of Common Stock of the
registrant, also included as an exhibit to the
Rights Agreement.............................................[12]
4.12 Form of Advisor Warrant dated October 18, 2001
and List of Holders .........................................[14]
4.13 Form of Advisor Warrant dated November 2, 2001
and List of Holders..........................................[14]
4.14 Form of Investor Warrant dated October 18, 2001
and List of Holders..........................................[14]
4.15 Stock Option held by R. Jerry Falkner
dated April 11, 2001.........................................[14]
4.16 Warrant held by Riches In Resources
dated May 14, 2001...........................................[14]
4.17 Stock Option held by R. Jerry Falkner dated
October 11, 1999 and Amendment thereto.......................[15]
4.18 Amendment dated April 25, 2002 to
October 11, 1999 Stock Option
Agreement held by R. Jerry Falkner..........................[16]
4.19 USE 2001 Incentive Stock Option Plan
with Form of Option Agreement................................[18]
4.20 USE Schedule of Options
Issued - 12/7/01 and 5/20/01.................................[18]
4.21 USE 2001 Officers' Stock Compensation Plan...................[18]
4.22 Intentionally left blank
4.23 Amendment dated December 10, 2002 to
October 11, 1999 Stock Option
Agreement held by R. Jerry Falkner...........................[20]
4.24 Form of warrant held by
Sanders Morris Harris, Inc......................................*
29
4.25(a) Form of warrant held by C.C.R.I.................................*
4.25(b) Form of warrant held by Jason Wayne Assad.......................*
4.26 Exchange Agreement (for conversion
of RMG shares into USE shares)..................................*
4.26(a) Form of Amendment to Exchange Agreement
(Caydal and McCaughey...........................................*
4.26(b) Form of Amendment to Exchange Agreement
(Karns, Monahan/Cotner, Van Buren)..............................*
4.27 Form of warrant held by
McKim & Company- 19,500 and John Schlie-3,000...................*
4.28 Form of warrant held by Frederick P. Lutz.......................*
4.29 Form of option held by
Murray Roark-40,000 and Robert Craig-40,000.....................*
4.30 Amendment to Secured Convertible Note (Caydal)..................*
4.31 Amendment to Secured Convertible Note (Tsunami)................ *
5.1 Opinion re legality and consent of counsel......................*
10.1 USECC Joint Venture Agreement - Amended as of 1/20/89.........[1]
10.2 Management Agreement with USECC...............................[3]
10.3 Contract - R. J. Falkner & Company
dated April 11, 2001.........................................[11]
10.4 Consulting Agreement - Riches In Resources
dated May 14, 2001...........................................[11]
10.5 Agreement for Strategic Services
VentureRound Group LLC.......................................[14]
10.6-10.60 [intentionally left blank]
10.61 Closing Agreement - Addendum to Agreement
for Purchase and Sale of Assets (see Exhibit 10.62)..........[11]
10.62 Agreement for Purchase and Sale of Assets
(Rocky Mountain Gas, Inc. and Quantum Energy LLC).............[9]
10.63 Purchase and Sale Agreement
CCBM, Inc. (subsidiary of Carrizo Oil & Gas, Inc.)
and Rocky Mountain Gas, Inc..................................[16]
30
10.64 Purchase and Sale Agreement
Bobcat Property..............................................[16]
10.65 Convertible Promissory Note and
Security Agreement dated May 30, 2002........................[17]
10.66 Convertible Promissory Note and
Security Agreement dated November 19, 2002...................[19]
10.67 Contribution and Subscription Agreement (to which
RMG, Pinnacle Gas Resources and others are parties)..........[22]
16. Concurrence Letter from Arthur Andersen LLP
on Change of Accounting Firms................................[10]
21.1 Subsidiaries of Registrant...................................[11]
23.1 Included in Exhibit 5.1
23.2 Consent of Independent Auditors (Grant Thornton LLP)............*
* Filed herewith
-------------
Unless otherwise indicated, the SEC File Number for each of the following
documents incorporated by reference is 000-6814.
[1] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1989,
filed August 29, 1989.
[2] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1990,
filed September 14, 1990.
[3] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1991,
filed September 13, 1991.
[4] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1992,
filed September 14, 1991.
[5] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-1 registration statement, initial filing (SEC File
No. 333-1689) filed June 18, 1996).
[6] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1996,
filed September 13, 1996.
[7] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1997,
filed September 15, 1997.
[8] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 1998,
filed September 14, 1998.
31
[9] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 2000,
filed September 13, 2000.
[10] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form 8-K, filed February 5, 2001.
[11] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended on May 31,
2001, filed August 29, 2001, and amended on June 18, 2002 and September
25, 2002.
[12] Incorporated by reference to exhibit number 4.1 to the Registrant's Form
8-A12G filed, September 20, 2001.
[13] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement (SEC File No. 333-73546),
filed November 16, 2001.
[14] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement (SEC File No. 333-75864),
filed December 21, 2001.
[15] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement (SEC File No. 333-83040),
filed February 19, 2002.
[16] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement, amendment no. 1 (SEC File
No. 333-83040), filed May 17, 2002.
[17] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form 8-K, filed June 6, 2002.
[18] Incorporated by reference from the like-numbered exhibit to the
Registrant's Annual Report on Form 10-K for the year ended May 31, 2002,
filed September 13, 2002.
[19] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form 8-K, filed December 9, 2002.
[20] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement, amendment no. 4 (SEC File
No. 333-83040), filed March 3, 2003.
[21] Incorporated by reference from the like-numbered exhibit to the
Registrant's Form S-3 registration statement, amendment no. 1 (SEC File
No. 333-88584), filed March 10, 2003.
[22] Incorporated by reference from the exhibit filed with th Registrants'
Form 8-K, filed July 15, 2003
32
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or in the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply to this
registration statement if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act , each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
33
(h) RELATIVE TO REQUEST FOR ACCELERATION OF EFFECTIVE DATE.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Riverton, state of Wyoming on December 2, 2003.
U.S. ENERGY CORP. (Registrant)
Date: December 2, 2003 By: /s/ John L. Larsen
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John L. Larsen, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
registration statement on Form S-3 has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Date: December 2, 2003 By: /s/ John L. Larsen
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John L. Larsen, Director
Date: December 2, 2003 By: /s/ Keith G. Larsen
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Keith G. Larsen, Director
Date: December 2, 2003 By: /s/ Harold F. Herron
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Harold F. Herron, Director
Date: December 2, 2003 By: /s/ Nick Bebout
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Nick Bebout, Director
Date: December __, 2003 By:
----------------------------------------
Don C. Anderson, Director
Date: December 2, 2003 By: /s/ H. Russell Fraser
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H. Russell Fraser, Director
Date: December 2, 2003 By: /s/ Michael Anderson
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Michael Anderson, Director
Date: December 2, 2003 By: /s/ Robert Scott Lorimer
----------------------------------------
Robert Scott Lorimer,
Principal Financial Officer/
Chief Accounting Officer
35