As filed with the Securities and Exchange Commission on October 25, 2002
Registration Statement No. _______
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------
FORTUNE NATURAL RESOURCES CORPORATION
-------------------------------------
(Exact Name of Registrant as specified in its charter)
Delaware 95-4114732
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Tyrone J. Fairbanks
Fortune Natural Resources Corporation
515 West Greens Road, Suite 720 515 West Greens Road, Suite 720
Houston, Texas 77067 Houston, Texas 77067
(Address, including zip code, (Name, address, including zip code,
and telephone number, including and telephone number, including
area code, of registrant's area code of agent for service)
principal executive offices)
FORTUNE NATURAL RESOURCES CORPORATION 401(k) PROFIT SHARING PLAN
FORTUNE NATURAL RESOURCES CORPORATION 1998 STOCK OPTION PLAN
FORTUNE NATURAL RESOURCES CORPORATION
DIRECTORS AND CONSULTANTS STOCK COMPENSATION PLAN
(Full title of the Plans)
CALCULATION OF REGISTRATION FEE
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to be Registered to be Offering Price Aggregate Offering Registration
Registered(1) Per Share (2) Price Fee
- ------------------------------------------------------------------------------
Common Stock 60,000 shares $0.3985(3) $23,910 $2
$.01 par value
Common Stock 1,490,000 shares $0.30(4) $447,000 $41
$.01 par value
Common Stock 1,386,760 shares $0.33 $457,630 $42
$.01 par value
- --------------------------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to
be offered or sold pursuant to the employee benefit plans described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee.
(3) The proposed offering price for the 401(k) Profit Sharing Plan shares is the
price used by Fortune to calculate the Company's 2001 contribution to the
401(k) Plan. This price is based upon the average of the closing prices of
the Company's Common stock as reported on the OTC Bulletin Board on the last
day of trading for each month in 2001.
(4) Pursuant to Rule 457(h) of the General Rules and Regulations under the
Securities Act of 1933 as amended, the proposed offering price per share for
the 1998 Stock Option Plan shares is based upon the average price at which
options may be exercised.
FORTUNE NATURAL RESOURCES CORPORATION
401(k) PROFIT SHARING PLAN
General Plan Description
October 2002
General Plan Information
The 401(k) Profit Sharing Plan gives eligible employees an opportunity to
contribute a portion of their salary to a tax-deferred retirement plan. All
individuals, except union members and non-resident alien employees, who have
attained age 21 and three months of service with the Company are eligible to
participate in the 401(k) Plan. Contributions made by a participant are allowed
as of the first day of the month following their eligibility. A participant as
of that date may elect to defer a portion of his or her pre-tax compensation
through a written salary reduction agreement with the Company.
Deferrals are subject to percentage and dollar amount limitations set
forth in the Internal Revenue Code. The Company, in its discretion, may elect to
contribute common stock to a participant's account. The Company hereby
incorporates by reference the plan document filed as an exhibit to the Form S-8
filed on August 14, 1998.
The terms and conditions of the 401(k) Plan are summarized in this
Description. This description is not intended as a substitute for the 401(k)
Plan or the Summary Plan Description of the 401(k) Plan. For a complete
description of the 401(k) Plan and the rights of participants thereunder,
reference is made to the 401(k) Plan, copies of which may be obtained from the
Secretary of the Company. For additional information about the 401(k) Plan,
contact:
Corporate Secretary
Fortune Natural Resources Corporation
515 W. Greens Road, Suite 720
Houston, Texas 77067
(281) 872-1170
Tax Effects of Plan Participation
The 401(k) Plan is a qualified plan under Internal Revenue Code Section
401(a). Participants are not taxed on their compensation deferrals or on Company
contributions to the 401(k) Plan. The Company is entitled to a tax deduction for
the participant compensation deferral amount and any common stock that is
contributed to the 401(k) Plan. Neither the participant nor the Company is taxed
on income generated by the 401(k) Plan until distribution. Distributions from
the 401(k) Plan are subject to a twenty percent federal withholding tax unless
they are rolled over into an Individual Retirement Account (IRA) or another
qualified retirement plan in accordance with federal income tax regulations. The
participant pays a ten percent add-on tax for any amount distributed prior to
age 59 1/2, subject to certain exceptions.
Any participant who owns more than five percent of the outstanding common
stock of the Company must take distributions from the 401(k) Plan upon reaching
the age of 70 1/2. Such distributions are not eligible for rollover into an IRA
or another qualified retirement plan.
Information about the Company
The Company incorporates by reference the Company's Annual Report on Form
10-KSB for the year ended December 31, 2001 and Quarterly Reports on Form 10-QSB
for the periods ended March 31, 2002 and June 30, 2002, copies of which may be
obtained without charge, upon written or oral request, from the Secretary of the
Company shown on the cover page hereof.
1
FORTUNE NATURAL RESOURCES CORPORATION
1998 STOCK OPTION PLAN
General Plan Description
October 2002
Plan Information
The plan gives key employees, officers and directors of the Company the
opportunity to take part in the growth of the Company through the purchase of
common stock pursuant to stock options. The purpose of the plan is to provide an
incentive to such individuals to increase the Company's profitability. Options
may be granted under the plan until December 31, 2002, subject to the right of
Fortune's board of directors to suspend or terminate the plan at any time. The
Company hereby incorporates the plan document filed as an exhibit to the Form
S-8 filed on August 14, 1998.
The terms and conditions of the plan are summarized in that S-8. Such
description is not intended as a substitute for the plan and the option
agreements entered into by the Company with option holders. For a complete
description of the plan and the rights of option holders thereunder, reference
is made to the plan, copies of which may be obtained from the Secretary of the
Company. For additional information about the plan, contact:
Corporate Secretary
Fortune Natural Resources Corporation
515 West Greens Road, Suite 720
Houston, Texas 77067
(281) 872-1170
Federal Income Tax Matters
Incentive Stock Options. Option holders are not taxed upon receipt of
incentive stock options or at the time of exercise of the options. The option
holder's tax basis in stock purchased upon exercise of the option is the
exercise price. If the stock is held for a required holding period (the later of
two years after grant of the option or one year from exercise), the option
holder is taxed on the difference between the basis in the stock and the sales
price of the stock upon sale of the stock. The taxable amount is treated as
capital gain and is taxed under the rules set forth in section 1(h) of the
Internal Revenue Code. Option holders should consult with their own tax advisors
regarding the application of these rules.
If the stock is sold before satisfying the holding period requirement, the
option holder is deemed to have received compensation equal to the difference
between the option exercise price and the fair market value of the stock on the
date of exercise. This latter amount is added to the basis of the stock for
computing any capital gain on the sale of the stock.
Non-Qualified Options. Option holders of non-qualified options also are
not taxed at the time of receipt of the options (since the options have no
discernable value) but, unlike incentive stock options, are taxed upon exercise
of the option on the difference between the "fair market value" of the stock at
the time of exercise and the exercise price. This amount is treated as
compensation and is taxable as ordinary income. Further, at the time of sale of
the stock, if the sales price exceeds the "fair market value" at the time of
exercise of the option, the difference is treated as capital gain income
(short-term or long-term depending on how long the stock has been held after
exercise of the option).
1
Information About the Company
The Company incorporates by reference the Company's Annual Report on Form
10-KSB for the year ended December 31, 2001 and Quarterly Reports on Form 10-QSB
for the periods ended March 31, 2002 and June 30, 2002, copies of which may be
obtained without charge, upon written or oral request, from the Secretary of the
Company shown on the cover page hereof.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this description and prior to the termination of the offering of shares
pursuant to outstanding options under the plan shall be deemed to be
incorporated by reference in this Description. Copies of all such documents are
also available without charge, upon written or oral request, from the Secretary
of the Company.
2
FORTUNE NATURAL RESOURCES CORPORATION
DIRECTORS' AND CONSULTANTS' COMPENSATION PLAN
General Plan Description
October 2002
Plan Information
This plan, adopted by the Company in March, 1999, provides for the payment
of stock or other securities (including stock-purchase warrants) of the Company,
in lieu of cash, to members of the board of directors and consultants to the
Company when performing services typically provided by employees. All directors
and selected consultants whose duties are agreed, in advance, to fall under the
provisions of the plan are covered. Directors are compensated in common stock or
common stock options on a quarterly basis, with the value of the stock
determined by the last trading price on the final business day of each calendar
quarter. The value of securities issued to non-directors is based upon the
market price on the day of the grant. The plan will remain in effect until
terminated by the board of directors, which has the right to modify or terminate
the plan at any time. Shares issued under the terms of the plan may be resold
pursuant to a valid registration statement. The plan is not subject to the terms
of ERISA.
The terms and conditions of the plan are as summarized in this
description. This description is not intended as a substitute for the plan. For
a complete description of this plan and the rights of the participants
thereunder, reference is made to the plan, copies of which may be obtained from
the Company. For additional information, contact:
Corporate Secretary
Fortune Natural Resources Corporation
515 West Greens Road, Suite 720
Houston, Texas 77067
(281) 872-1170
Tax Effects of Plan Participation
Grants of stock made to directors and consultants pursuant to the plan are
taxable when earned. The value of the grant, in turn, is an expense item to the
Company for which a tax deduction is available. In the event that consultants
are compensated with warrants to purchase common stock rather than the stock
itself, no tax is due from the recipient on the basis that the warrant has no
discernable value. Upon exercise, however, holders are taxed on the difference
between the fair market value of the stock and the exercise price. Thereafter,
at the time of sale of the stock, if the sales price exceeds the fair market
value at the time of exercise, the difference is treated as a capital gain.
Information about the Company
The Company incorporates by reference in this description the following
document, copies of which may be obtained without charge, upon written or oral
request, from the Secretary of the Company shown on the cover page hereof: the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2001 and
Quarterly Reports on Form 10-QSB for the periods ended March 31, 2002 and June
30, 2002.
1
6 0, 0 0 0 S H A R E S
FORTUNE NATURAL RESOURCES CORPORATION
Common Stock
($.01 par value)
------------------------------
The shares of the Common Stock, $.01 par value (the "Common Stock") of
Fortune Natural Resources Corporation ("Fortune" or the "Company") covered by
this prospectus may be offered from time to time by the Fortune Natural
Resources Corporation 401(k) Profit Sharing Plan (the "401(k) Plan") at the
discretion of 401(k) Plan Participants who have the right under the 401(k) Plan
to direct the investment of their accounts. The Company will not receive any
proceeds from the sale of shares by the 401(k) Plan. All proceeds will be
received by and retained in the 401(k) Plan until a participant is entitled to
receive a distribution from the 401(k) Plan.
The 401(k) Plan acquires the shares through discretionary matching
contributions by the Company to the 401(k) Plan.
The expenses incurred in registering the Shares, including legal and
accounting fees, will be paid by the Company. To the knowledge of the Company,
the 401(k) Plan has made no arrangement with any brokerage firm for the sale of
the shares. The 401(k) Plan may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Act"). Any commissions
received by a broker or dealer in connection with resales of the shares may be
deemed to be underwriting commissions or discounts under the Act. The Common
Stock is listed on the over-the-counter bulletin board. The bid and asked prices
of the common stock on October 24, 2002, were $0.08 and $0.12, respectively.
The shares of Common Stock have not been registered for sale under the
securities laws of any state or other jurisdiction as of the date of this
Prospectus. Brokers or dealers effecting transactions in the Common Stock should
confirm the registration of the Common Stock under the securities laws of states
in which such transactions occur or the existence of an exemption from such
registration, or should cause such registration to occur in connection with any
offer or sale of the Common Stock.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON ACCURACY OR THE ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public Discount Company (1)
-------- ------------ ------------
Per Share................ $ N/A N/A $ N/A
Total.................... $ N/A N/A $ N/A
- --------------------------------------------------------------------------------
(1) None. All proceeds will be received by the 401(k) Plan. The account of
participants in the 401(k) Plan from which shares are sold will bear all
commissions payable to brokers or dealers in connection with the sale of
shares. The Company will bear all costs of the offering estimated at
$2,500.
------------------------------
The date of this Prospectus is October 25, 2002
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements filed
by the Company with the Commission pursuant to the informational requirements of
the Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission, at Room 1024, Judiciary Plaza Building, 450 Fifth
Street, N.W. Washington, D.C. 20549, and the Regional offices of the Commission:
75 Park Place, 14th Floor, New York, New York 10007, and Kluczynski Federal
Building, 230 South Dearborn Street, Room 3190, Chicago, Illinois 60604. Copies
of such material may be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1025, Judiciary Plaza Building, 450 Fifth St.,
N.W. Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock being registered
hereby. This Prospectus, filed as part of the Registration Statement, does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain portions of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is made
to the Registration Statement and to the exhibits and schedules thereto, which
may be inspected at the Commission's offices without charge or copies of which
may be obtained from the Commission upon payment of the prescribed fees.
Statements made in the Prospectus as to the contents of any contract, agreement
or document referred to are not necessarily complete, and in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, and each such statement is qualified in
its entirety by such reference.
INCORPORATION OF INFORMATION BY REFERENCE
There is hereby incorporated by reference in this Prospectus and made a
part hereof (1) the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 and Quarterly Reports on Form 10-QSB for the periods ended
March 31, 2002 and June 30, 2002.
There is also hereby incorporated by reference in this Prospectus and made
a part hereof the Company's Registration Statement on Form 8-A filed on
September 13, 1993, which describes the Common Stock.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or to be incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein modifies, supersedes or replaces such statement. Any statements
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
2
No person is authorized to give any information or make any
representations other than those contained in the Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the registered
shares to which it relates or an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
THE COMPANY
Fortune is an independent oil and gas company whose primary focus is
exploration for and development of domestic oil and gas. Fortune is active
principally in areas onshore and offshore Louisiana and Texas, including the
relatively shallow transition zone. It uses modern geophysical technology and
advanced interpretation techniques in these areas in an attempt to make new
discoveries in areas of proven historical production.
Fortune participates generally as a non-operator of relatively small
interests in a variety of exploration and development projects. We use
state-of-the-art technologies, including three dimensional seismic and
computer-aided exploration technology, wherever possible because we believe that
these techniques have undergone important technological advances in recent years
and that their use can provide us with a more accurate and complete prospect
evaluation. This is intended to increase the likelihood of finding commercial
quantities of oil and gas at lower average reserve finding costs.
We also seek to take advantage of attractive acquisition targets which
will enable us to acquire reserves at an attractive price.
The Company's principal executive office is located at 515 West Greens
Road, Suite 720, Houston, Texas 77067. Its telephone number at that address is
(281) 872-1170.
USE OF PROCEEDS
The shares which are the subject of this Prospectus may be offered and
sold from time to time by the 401(k) Plan, and the Company will not receive any
of the proceeds of such sales. The Company has agreed to bear all expenses of
registering such shares, including legal, accounting and printing costs
estimated at $2,500.
PLAN OF DISTRIBUTION
The 401(k) Plan may offer and sell shares pursuant to this Prospectus from
time to time on the over-the-counter bulletin board or through individually
negotiated transactions or in other ways. The Company is not aware of any
agreements which may have been entered into by the 401(k) Plan with brokers,
dealers or third parties for the offer or sale of any shares. The Company will
not be a party to any such agreements nor will it participate in the negotiation
or consummation of any such agreements or the offer and sale of any of the
shares covered by this Prospectus.
3
Sales of shares by the 401(k) Plan will be subject to the restrictions of
Rule 144 under the Securities Act of 1933, as amended (which, among other
things, limits the amount of shares which may be disposed of in any calendar
quarter to 1% of the Company's outstanding shares or currently about 165,000
shares each quarter).
At the date of this Prospectus, the 401(k) Plan owns 142,687 shares of
common stock of the Company which have been allocated to the account of six
participants of the 401(k) Plan.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to the Company, the Company has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
EXPERTS
The financial statements of the Company as of December 31, 2001 and for
each of the years in the two-year period then ended have been incorporated
herein by reference in reliance upon the report of Grant Thornton LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.
4
================================== ===================================
TABLE OF CONTENTS
Page
----
Cover Page 1
Additional Information 2 60,000 Shares
Incorporation of Information
By Reference 2
The Company 3 COMMON STOCK
($0.01 Par Value)
Use of Proceeds 3
Plan of Distribution 3
Experts 4
FORTUNE NATURAL
RESOURCES CORPORATION
---------------------
P R O S P E C T U S
---------------------
October 25, 2002
================================== ===================================
1 , 4 9 0 , 0 0 0 S H A R E S
FORTUNE NATURAL RESOURCES CORPORATION
Common Stock
($.01 par value)
------------------------------
The shares of the Common Stock, $.01 par value (the "Common Stock")
covered by this prospectus may be offered from time to time by certain
shareholders (the "Selling Shareholders") of Fortune Natural Resources
Corporation ("Fortune" or the "Company"). The Company will not receive any
proceeds from the sale of shares by the Selling Shareholders.
The Selling Shareholders are officers, directors and key employees of
Fortune who acquired their shares through the exercise of stock options granted
to them under the Company's 1998 stock option plan.
The expenses incurred in registering the Shares, including legal and
accounting fees, will be paid by the Company. To the knowledge of the Company,
the Selling Shareholders have made no arrangement with any brokerage firm for
the sale of the Shares. The Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"). Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the Act. The Common Stock is listed on the over-the-counter bulletin
board. The bid and asked prices of the common stock on October 24, 2002, were
$0.08 and $0.12, respectively.
The shares of Common Stock have not been registered for sale under the
securities laws of any state or other jurisdiction as of the date of this
Prospectus. Brokers or dealers effecting transactions in the Common Stock should
confirm the registration of the Common Stock under the securities laws of states
in which such transactions occur or the existence of an exemption from such
registration, or should cause such registration to occur in connection with any
offer or sale of the Common Stock.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON ACCURACY OR THE ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
- --------------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public Discount Company (1)
-------- ------------ ------------
Per Share................ $ N/A N/A $ N/A
Total.................... $ N/A N/A $ N/A
- --------------------------------------------------------------------------------
(1) None. All proceeds will be received by the Plan. The account of
participants in the Plan from which shares are sold will bear all
commissions payable to brokers or dealers in connection with the sale of
shares. The Company will bear all costs of the offering estimated at
$5,000.
------------------------------
The date of this Prospectus is October 25, 2002.
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements filed
by the Company with the Commission pursuant to the informational requirements of
the Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission, at Room 1024, Judiciary Plaza Building, 450 Fifth
Street, N.W. Washington, D.C. 20549, and the Regional offices of the Commission:
75 Park Place, 14th Floor, New York, New York 10007, and Kluczynski Federal
Building, 230 South Dearborn Street, Room 3190, Chicago, Illinois 60604. Copies
of such material may be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1025, Judiciary Plaza Building, 450 Fifth St.,
N.W. Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the"Securities Act"), with respect to the Common Stock being registered hereby.
This Prospectus, filed as part of the Registration Statement, does not contain
all the information set forth in the Registration Statement and the exhibits and
schedules thereto, certain portions of which have been omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock, reference is made to the
Registration Statement and to the exhibits and schedules thereto, which may be
inspected at the Commission's offices without charge or copies of which may be
obtained from the Commission upon payment of the prescribed fees. Statements
made in the Prospectus as to the contents of any contract, agreement or document
referred to are not necessarily complete, and in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement, and each such statement is qualified in its entirety by
such reference.
INCORPORATION OF INFORMATION BY REFERENCE
There is hereby incorporated by reference in this Prospectus and made a
part hereof the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 and Quarterly Reports on Form 10-QSB for the periods ended
March 31, 2002 and June 30, 2002.
There is also hereby incorporated by reference in this Prospectus and made
a part hereof the Company's Registration Statement on Form 8-A filed on
September 13, 1993, which describes the Common Stock.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or to be incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein modifies, supersedes or replaces such statement. Any statements
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
2
No person is authorized to give any information or make any
representations other than those contained in the Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the registered
shares to which it relates or an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
THE COMPANY
Fortune is an independent oil and gas company whose primary focus is
exploration for and development of domestic oil and gas. Fortune is active
principally in areas onshore and offshore Louisiana and Texas, including the
relatively shallow transition zone. It uses modern geophysical technology and
advanced interpretation techniques in these areas in an attempt to make new
discoveries in areas of proven historical production.
Fortune participates generally as a non-operator of relatively small
interests in a variety of exploration and development projects. We use
state-of-the-art technologies, including three dimensional seismic and
computer-aided exploration technology, wherever possible because we believe that
these techniques have undergone important technological advances in recent years
and that their use can provide us with a more accurate and complete prospect
evaluation. This is intended to increase the likelihood of finding commercial
quantities of oil and gas at lower average reserve finding costs.
The Company also seeks to take advantage of attractive acquisition targets
which will enable it to acquire reserves at an attractive price.
The Company's principal executive office is located at 515 West Greens
Road, Suite 720, Houston, Texas 77067. Its telephone number is (281) 872-1170.
USE OF PROCEEDS
The shares which are the subject of this Prospectus may be offered and
sold from time to time by the Selling Shareholders, and the Company will not
receive any of the proceeds of such sales. The Company agreed to bear all
expenses of registering such shares, including legal, accounting and printing
costs estimated at $5,000.
PLAN OF DISTRIBUTION
Selling shareholders may offer and sell shares pursuant to this Prospectus
from time to time on the over-the-counter bulletin board or through individually
negotiated transactions or in other ways. The Company is not aware of any
agreements which may have been entered into by any Selling Shareholder with
brokers, dealers or third parties for the offer or sale of any shares. Except as
noted below, the Company will not be a party to any such agreements nor will it
participate in the negotiation or consummation of any such agreements or the
offer and sale of any of the shares covered by this Prospectus.
3
Sales of shares by affiliates of the Company (including members of
management or more than 5% shareholders of the Company) are subject to
restrictions on trading in the Company's stock under the Securities Exchange Act
of 1934, as amended, as well as certain reporting requirements under such Act.
Affiliates who hold shares covered by this Prospectus include Tyrone J.
Fairbanks, Ronald P. Nowak, Dean W. Drulias, Barry Feiner, Martin Lacoff, and
John E. McConnaughy, Jr., all of whom are directors and/or officers of the
Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
The table below sets forth data as of October 21, 2002 on the number of
shares held by each of the Selling Shareholders who are affiliates of the
Company after giving consideration to the 1,490,000 shares being registered
herein and the 1,386,760 shares registered on this same date:
SECURITIES
SECURITIES SECURITIES BENEFICIALLY PERCENTAGE
BENEFICIALLY IN OWNED AFTER OF CLASS
NAME POSITION OWNED OFFERING OFFERING OWNED
- -------------------- -------------------------- ----------- ----------- ------------ ----------
Dean W. Drulias General Counsel, Corporate
Secretary and Director 707,670 360,000 1,067,670 6.0%
John E. McConnaughy Director 811,332 70,000 881,332 5.0%
Tyrone J. Fairbanks Chairman of the Board,
Chief Executive Officer,
and Director 497,263 360,000 857,263 4.9%
Barry Feiner Director 625,198 70,000 695,198(1) 4.0%
Martin Lacoff Director 248,900 70,000 318,900 1.9%
Ronald P. Nowak President and
Chief Operating Officer 10,000 180,000 190,000 1.1%
(1) All shares shown, except those which underlie 580,849 stock-purchase
options granted to Mr. Feiner by virtue of his service as a director, are owned
by his wife, Janet Portelly. Mr. Feiner disclaims beneficial ownership of all
such securities owned by Ms. Portelly.
EXPERTS
The financial statements of the Company as of December 31, 2001 and for
each of the years in the two-year period then ended have been incorporated
herein by reference in reliance upon the report of Grant Thornton LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.
4
================================== ===================================
TABLE OF CONTENTS
Page
----
Cover Page 1
Additional Information 2 1,490,000 Shares
Incorporation of Information
By Reference 2
The Company 3 COMMON STOCK
($0.01 Par Value)
Use of Proceeds 3
Plan of Distribution 3
Experts 4
FORTUNE NATURAL
RESOURCES CORPORATION
---------------------
P R O S P E C T U S
---------------------
October 25, 2002
================================== ===================================
1 , 3 8 6 , 7 6 0 S H A R E S
FORTUNE NATURAL RESOURCES CORPORATION
Common Stock
($.01 par value)
------------------------------
The shares of the Common Stock, $.01 par value (the "Common Stock")
covered by this prospectus may be offered from time to time by certain
shareholders (the "Selling Shareholders") of Fortune Natural Resources
Corporation ("Fortune" or the "Company"). The Company will not receive any
proceeds from the sale of shares by the Selling Shareholders.
The Selling Shareholders are directors and key consultants to Fortune who
acquired their shares directly as compensation or through the exercise of stock
purchase warrants granted to them under the Company's directors' and
consultants' compensation plan.
The expenses incurred in registering the Shares, including legal and
accounting fees, will be paid by the Company. To the knowledge of the Company,
the Selling Shareholders have made no arrangement with any brokerage firm for
the sale of the Shares. The Selling Shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Act"). Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the Act. The Common Stock is listed on the over-the-counter bulletin
board. The bid and asked prices of the common stock on October 24, 2002, were
$0.08 and $0.12, respectively.
The shares of Common Stock have not been registered for sale under the
securities laws of any state or other jurisdiction as of the date of this
Prospectus. Brokers or dealers effecting transactions in the Common Stock should
confirm the registration of the Common Stock under the securities laws of states
in which such transactions occur or the existence of an exemption from such
registration, or should cause such registration to occur in connection with any
offer or sale of the Common Stock.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON ACCURACY OR THE ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
- --------------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public Discount Company (1)
-------- ------------ ------------
Per Share................ $ N/A N/A $ N/A
Total.................... $ N/A N/A $ N/A
- --------------------------------------------------------------------------------
(1) None. All proceeds will be received by the Plan. The account of
participants in the Plan from which shares are sold will bear all
commissions payable to brokers or dealers in connection with the sale of
shares. The Company will bear all costs of the offering estimated at
$5,000.
------------------------------
The date of this Prospectus is October 25, 2002.
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements filed
by the Company with the Commission pursuant to the informational requirements of
the Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission, at Room 1024, Judiciary Plaza Building, 450 Fifth
Street, N.W. Washington, D.C. 20549, and the Regional offices of the Commission:
75 Park Place, 14th Floor, New York, New York 10007, and Kluczynski Federal
Building, 230 South Dearborn Street, Room 3190, Chicago, Illinois 60604. Copies
of such material may be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1025, Judiciary Plaza Building, 450 Fifth St.,
N.W. Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock being registered
hereby. This Prospectus, filed as part of the Registration Statement, does not
contain all the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain portions of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is made
to the Registration Statement and to the exhibits and schedules thereto, which
may be inspected at the Commission's offices without charge or copies of which
may be obtained from the Commission upon payment of the prescribed fees.
Statements made in the Prospectus as to the contents of any contract, agreement
or document referred to are not necessarily complete, and in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, and each such statement is qualified in
its entirety by such reference.
INCORPORATION OF INFORMATION BY REFERENCE
There is hereby incorporated by reference in this Prospectus and made a
part hereof the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 and Quarterly Reports on Form 10-QSB for the periods ended
March 31, 2002 and June 30, 2002.
There is also hereby incorporated by reference in this Prospectus and made
a part hereof the Company's Registration Statement on Form 8-A filed on
September 13, 1993, which describes the Common Stock.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or to be incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein modifies, supersedes or replaces such statement. Any statements
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
2
No person is authorized to give any information or make any
representations other than those contained in the Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the registered
shares to which it relates or an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
THE COMPANY
Fortune is an independent oil and gas company whose primary focus is
exploration for and development of domestic oil and gas. Fortune is active
principally in areas onshore and offshore Louisiana and Texas, including the
relatively shallow transition zone. It uses modern geophysical technology and
advanced interpretation techniques in these areas in an attempt to make new
discoveries in areas of proven historical production.
Fortune participates generally as a non-operator of relatively small
interests in a variety of exploration and development projects. We use
state-of-the-art technologies, including three dimensional seismic and
computer-aided exploration technology, wherever possible because we believe that
these techniques have undergone important technological advances in recent years
and that their use can provide us with a more accurate and complete prospect
evaluation. This is intended to increase the likelihood of finding commercial
quantities of oil and gas at lower average reserve finding costs.
The Company also seeks to take advantage of attractive acquisition targets
which will enable it to acquire reserves at an attractive price.
The Company's principal executive office is located at 515 West Greens
Road, Suite 720, Houston, Texas 77067. Its telephone number is (281) 872-1170.
USE OF PROCEEDS
The shares which are the subject of this Prospectus may be offered and
sold from time to time by the Selling Shareholders, and the Company will not
receive any of the proceeds of such sales. The Company agreed to bear all
expenses of registering such shares, including legal, accounting and printing
costs estimated at $5,000.
PLAN OF DISTRIBUTION
Selling shareholders may offer and sell shares pursuant to this Prospectus
from time to time on the over-the-counter bulletin board or through individually
negotiated transactions or in other ways. The Company is not aware of any
agreements which may have been entered into by any Selling Shareholder with
brokers, dealers or third parties for the offer or sale of any shares. Except as
noted below, the Company will not be a party to any such agreements nor will it
participate in the negotiation or consummation of any such agreements or the
offer and sale of any of the shares covered by this Prospectus.
3
Sales of shares by affiliates of the Company (including members of
management or more than 5% shareholders of the Company) are subject to
restrictions on trading in the Company's stock under the Securities Exchange Act
of 1934, as amended, as well as certain reporting requirements under such Act.
The affiliates who hold shares covered by this Prospectus include Barry W.
Blank, J. Michael Urban, Dean W. Drulias, John McConnaughy, Barry Feiner and
Ronald P. Nowak.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
The table below sets forth data as of October 21, 2002 on the number of
shares held by each of the Selling Shareholders who are affiliates of the
Company after giving consideration to the 1,386,760 shares registered herein and
subsequent to the issuance of the additional 1,490,000 shares being registered
on this same date:
SECURITIES
SECURITIES SECURITIES BENEFICIALLY PERCENTAGE
BENEFICIALLY IN OWNED AFTER OF CLASS
NAME POSITION OWNED OFFERING OFFERING OWNED
- -------------------- -------------------------- ----------- ----------- ------------ ----------
Barry W. Blank 1,711,901 250,000 1,961,901 10.6%
Dean W. Drulias Director 853,256 214,414 1,067,670 6.0%
J. Michael Urban 760,640 180,000 940,640 5.3%
John McConnaughy Director 757,141 124,191 881,332 5.0%
Barry Feiner Director 295,349 399,849 695,198(1) 4.0%
Martin Lacoff Director 193,985 124,915 318,900 1.9%
Ronald P. Nowak President and
Chief Operating Officer 180,000 10,000 190,000 1.1%
(1) All shares shown, except those which underlie 580,849 stock-purchase
options granted to Mr. Feiner by virtue of his service as a director, are owned
by his wife, Janet Portelly. Mr. Feiner disclaims beneficial ownership of all
such securities owned by Ms. Portelly.
EXPERTS
The financial statements of the Company as of December 31, 2001 and for
each of the years in the two-year period then ended have been incorporated
herein by reference in reliance upon the report of Grant Thornton LLP,
independent certified public accountants, and upon the authority of said firm as
experts in accounting and auditing.
4
================================== ===================================
TABLE OF CONTENTS
Page
----
Cover Page 1
Additional Information 2 1,386,760 Shares
Incorporation of Information
By Reference 2
The Company 3 COMMON STOCK
($0.01 Par Value)
Use of Proceeds 3
Plan of Distribution 3
Experts 4
FORTUNE NATURAL
RESOURCES CORPORATION
---------------------
P R O S P E C T U S
---------------------
October 25, 2002
================================== ===================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
There is hereby incorporated by reference in this Prospectus and made a
part hereof the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2001 and Quarter Reports on Form 10-QSB for the periods ending
March 31, 2002 and June 30, 2002.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the termination of the offering of the Common Stock shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
There is also hereby incorporated by reference in this Prospectus and made
a part hereof the Company's Registration Statement on Form 8-A filed on
September 13, 1993, which describes the Common Stock.
Any statement contained in a document incorporated or to be incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein modifies, supersedes or replaces such statement. Any
statements modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law permits the
indemnification of officers, directors, employees and agents of Delaware
corporations. The Certificate of Incorporation and Bylaws of the Company provide
that the corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware as it may be amended from
time to time, indemnify and hold harmless each person who was or is a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
whom he or she is a legal representative, is or was a director or officer of the
Company or is or was serving at the request of the Company as director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action or inaction in an
official capacity or in any other capacity while serving as a director, officer,
employee or agent, against all costs, charges, expenses, liabilities and losses
(including attorney's fees, judgments, fines, excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators.
S-1
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
23.1 Consent of Grant Thornton LLP (filed herewith).
24.1 Power of Attorney (included in the signature page of this
Registration Statement).
Item 9. Undertakings.
(a) 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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or 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 a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(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 if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
S-2
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 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 of controlling
person of the registrant in the successful defense of any action, suit of
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 a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
S-3
SIGNATURES
The Registrant. 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-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on October 25, 2002
FORTUNE NATURAL RESOURCES CORPORATION
By: /s/ Tyrone J. Fairbanks
--------------------------------------
Tyrone J. Fairbanks
Chairman of the Board, Chief Executive
Officer, Chief Financial Officer, and
Director
By: /s/ Ronald P. Nowak
--------------------------------------
Ronald P. Nowak
President and Chief Operating Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Tyrone
J. Fairbanks and Dean W. Drulias, and each of them, as his true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any or
all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits hereto, and other documents
in connection therewith, with the Securities and Exchange Commission granting
unto said attorney-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the foregoing, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agent, or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Tyrone J. Fairbanks Chairman of the Board, October 25, 2002
- ---------------------------- Chief Executive Officer,
Tyrone J. Fairbanks Chief Financial Officer
and Director
/s/ Ronald P. Nowak President and Chief October 25, 2002
- ---------------------------- Operating Officer
Ronald P. Nowak
/s/ Dean W. Drulias General Counsel, Corporate October 25, 2002
- ---------------------------- Secretary and Director
Dean W. Drulias
/s/ Barry Feiner Director October 25, 2002
- ----------------------------
Barry Feiner
/s/ Martin Lacoff Director October 25, 2002
- ----------------------------
Martin Lacoff
/s/ John E. McConnaughy, Jr. Director October 25, 2002
- ----------------------------
John E. McConnaughy, Jr.
S-4
SIGNATURES
The 401(k) Plan. The Plan pursuant to the requirements of the Securities
Act of 1933, the trustees have duly caused this Registration Statement to be
signed on their behalf by the undersigned, thereunto duly authorized, in the
City of Houston, State of Texas, on October 25, 2002.
Fortune Natural Resources Corporation
401(k) Profit Sharing Plan
By: /s/ Dean W. Drulias
------------------------------------
Dean W. Drulias
Trustee
S-5