As filed December 16, 2005 File No. 333-________
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GALAXY ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO 98-0347827
(State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
1331 - 17TH STREET, SUITE 1050, DENVER, COLORADO 80202 (303) 293-2300
(Address, including zip code, and telephone number, including area
code, or registrant's principal executive offices)
MARC E. BRUNER, PRESIDENT, GALAXY ENERGY CORPORATION
1331 - 17TH STREET, SUITE 1050, DENVER, COLORADO 80202
(303) 293-2300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of all communications to:
FAY M. MATSUKAGE, ESQ., DILL DILL CARR STONBRAKER & HUTCHINGS, P.C.
455 SHERMAN STREET, SUITE 300, DENVER, COLORADO 80203
(303) 777-3737; (303) 777-3823 FAX
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of the Registration Statement.
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 this Form is a registration statement pursuant to General Instruction I.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [ ]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
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AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF REGISTERED OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED (1)<F1> (2)<F2> UNIT (3)<F3> PRICE (3)<F3> REGISTRATION FEE
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Common stock, $0.001 par 5,409,756 $1.35 $7,303,170.60 $781.44
value per share
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<FN>
(1)<F1> Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
registration statement also covers such additional number of shares of
common stock that may become issuable as a result of any stock splits,
stock dividends, or other similar transactions.
(2)<F2> These shares represent approximately 175% of the additional shares
underlying the convertible notes, based on the number of shares that
would be issuable on conversion due to a decrease in the conversion
price to $1.25, less shares already registered. The registrant will
file a new registration statement to cover the resale of any shares
beyond the amounts included in this registration statement.
(3)<F3> Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee, based upon the average of the bid and asked
prices for such shares of common stock on December 13, 2005, as
reported by the American Stock Exchange.
</FN>
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 thereafter 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 said Section 8(a),
may determine.
ii
Subject to Completion, Dated December 16, 2005
GALAXY ENERGY CORPORATION
UP TO 5,409,756 SHARES OF COMMON STOCK
Unless the context otherwise requires, the terms "we", "our" and "us"
refers to Galaxy Energy Corporation.
This prospectus relates to the resale by selling stockholders of up to
5,409,756 shares of common stock. We will not receive any proceeds from sale of
any of the shares offered by the selling stockholders. We will pay the expenses
of registering these shares.
Our common stock is traded on the American Stock Exchange under the
symbol "GAX." On December 15, 2005, the closing sale price for our common stock
was $1.30 per share.
INVESTING IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. A
DETAILED EXPLANATION OF THESE RISKS IS INCLUDED IN THE SECTION ENTITLED "RISK
FACTORS" OF THIS PROSPECTUS, BEGINNING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
____________, 2005
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.............................................................3
RISK FACTORS...................................................................4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................9
USE OF PROCEEDS...............................................................10
SELLING STOCKHOLDERS..........................................................10
PLAN OF DISTRIBUTION..........................................................12
LEGAL MATTERS.................................................................13
EXPERTS.......................................................................13
WHERE YOU CAN FIND MORE INFORMATION...........................................14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................14
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. You should carefully read this entire prospectus and the financial
statements contained in this prospectus before purchasing our securities.
GALAXY ENERGY CORPORATION
We are in the business of oil and gas exploration and production and
are currently acquiring and conducting exploration activities on coal bed
methane ("CBM") and other unconventional and conventional natural gas properties
in Wyoming, Colorado, Montana, Texas, and Europe in areas that offer attractive
exploitation opportunities for natural gas. To date, we have focused our
exploration efforts on CBM prospects in the Powder River Basin of Wyoming and
Montana, and the Piceance Basin in Colorado where we had interests in 161
completed wells and 68 wells in various stages of completion as of November 30,
2005.
We conduct exploration activities to locate natural gas and crude
petroleum through two wholly-owned subsidiaries, Dolphin Energy Corporation and
Pannonian International, Ltd. As we commence production of these products, they
will be sold at the wellhead to purchasers in the immediate area where the
products are produced.
Our principal executive offices are located at 1331 - 17th Street,
Suite 1050, Denver, Colorado 80202. Our telephone number is (303) 293-2300. Our
website is located at WWW.GALAXYENERGY.COM. Information contained in our website
is not part of this prospectus.
THE OFFERING
Securities offered..................Up to 5,409,756 shares of common stock that
are owned or may be acquired by selling
stockholders.
Use of proceeds.....................We will not receive any of the proceeds from
the selling stockholders of shares of our
common stock.
Securities outstanding..............68,668,029 shares of common stock as of
November 30, 2005.
Plan of distribution................The offering is made by the selling
stockholders 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 a high degree of
risk. See "Risk Factors."
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RISK FACTORS
Before deciding to invest in us or to maintain or increase your
investment, you should carefully consider the risk factors described below,
together with all other information in this prospectus and in our other filings
with the Securities and Exchange Commission ("SEC"), before making an investment
decision. If any of the following risks actually occurs, our business, financial
conditions or operating results could be materially adversely affected. In such
case, the trading price of our common stock could decline, and you may lose all
or part of your investment.
WE HAVE A LIMITED OPERATING HISTORY AND HAVE GENERATED ONLY VERY LIMITED
REVENUES. WE HAVE INCURRED SIGNIFICANT LOSSES AND WILL CONTINUE TO INCUR LOSSES
FOR THE FORESEEABLE FUTURE.
We are a development stage oil and gas company and have earned very
limited production revenue. We have not yet generated any proved resources on
any of our properties. Our principal activities have been raising capital
through the sale of our securities and identifying and evaluating potential oil
and gas properties.
From inception to August 31, 2005, we have an accumulated deficit of
$24,306,765. For the 2006 fiscal year, we do not expect our operations to
generate sufficient cash flows to provide working capital for our ongoing
overhead, the funding of our lease acquisitions, and the exploration and
development of our properties. Without adequate financing, we may not be able to
successfully develop any prospects that we have or acquire and we may not
achieve profitability from operations in the near future or at all.
OUR SHORT-TERM CASH COMMITMENTS REQUIRES US TO SELL MORE DEBT AND/OR EQUITY
SECURITIES AND/OR SELL OUR ASSETS, WHICH MAY BE DETRIMENTAL TO OUR SHAREHOLDERS.
As of December 1, 2005, we had contractual obligations due by November
30, 2006 totaling $14,232,000. To meet these obligations, we will need to raise
additional funds by selling debt and/or equity securities, and selling assets or
farm-outs or similar types of arrangements. Any financing obtained through the
sale of our equity will likely result in substantial dilution to our
shareholders. We have granted a security interest in our assets to the holders
of our notes. This limits our ability to sell debt securities, as we would have
to offer subordinated debt. Also, the existence of a security interest in our
assets restricts our ability to sell assets. If we are forced to sell assets to
meet our operating and capital requirements, we may not realize the full market
value of the assets and the sales price could be less than our carrying value of
the assets.
THE LACK OF PRODUCTION AND ESTABLISHED RESERVES FOR OUR PROPERTIES IMPAIRS OUR
ABILITY TO RAISE CAPITAL.
As of November 30, 2005, we have established very limited production of
natural gas from a limited number of wells, and have no properties for which
reserves have been established, making it more difficult to raise the amount of
capital needed to fully exploit the production potential of our properties.
Therefore, we may have to raise capital on terms less favorable than we would
desire. This may result in increased dilution to existing stockholders.
THE VOLATILITY OF NATURAL GAS AND OIL PRICES COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS.
We are producing and selling oil and gas only on a limited basis at
this time. However, the prices of natural gas and oil affect our business to the
extent that such prices influence a decision to invest in our company. If the
prices of natural gas and oil are low, investors may decide to invest in other
industries.
TERMS OF SUBSEQUENT FINANCINGS MAY ADVERSELY IMPACT YOUR INVESTMENT.
We may have to engage in common equity, debt, or preferred stock
financing in the future. Your rights and the value of your investment in the
common stock could be reduced by any type of financing we do. Interest on debt
securities could increase costs and negatively impacts operating results, and
investors in debt securities may negotiate for other consideration or terms
which could have a negative impact on your investment. Preferred stock could be
issued in series from time to time with such designations, rights, preferences,
and limitations as needed to raise capital, and the terms of preferred stock
could be more advantageous to those investors than to the holders of common
stock. If we need to raise more equity capital from sale of common stock,
institutional or other investors
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may negotiate terms at least as, and possibly more, favorable than the terms of
your investment. In addition, any shares of common stock that we sell could be
sold into the market and subsequent sales could adversely affect the market
price of our stock.
As an example of the foregoing, the purchasers of convertible notes
issued in May 2005 negotiated a perpetual overriding royalty interest with
respect to our existing domestic acreage averaging from 1% to 3%, depending upon
the nature and location of the property, a right of first refusal with respect
to future debt and/or equity financings, and a right to participate in any
farm-out financing transactions that do not have operating obligations by the
financing party as a material component. The grant of the overriding royalty
interest reduces somewhat the value of the properties to us, thereby negatively
impacting your investment. The existence of a right of first refusal to
participate in future financings may place some limitation on our ability to
negotiate the best possible terms for such financings or may deter others from
offering financing to us.
THE DEVELOPMENT OF OIL AND GAS PROPERTIES INVOLVES SUBSTANTIAL RISKS THAT MAY
RESULT IN A TOTAL LOSS OF INVESTMENT.
The business of exploring for and producing oil and gas involves a
substantial risk of investment loss that even a combination of experience,
knowledge, and careful evaluation may not be able to overcome. Drilling oil and
gas wells involves the risk that the wells will be unproductive or that,
although productive, the wells do not produce oil and/or gas in economic
quantities. There is no way to predict in advance of drilling and testing
whether any prospect encountering oil or gas will yield oil or gas in sufficient
quantities to cover drilling or completion costs or to be economically viable.
The seismic data, other technologies, and the study of producing fields in the
area do not enable us to know conclusively prior to drilling that oil and gas
will be present, or if present, if it is in commercial quantities. We cannot
assure anyone that the analogies that we draw from available data from other
wells, more fully explored prospects, or producing fields will be applicable to
our drilling prospects.
Other hazards, such as unusual or unexpected geological formations,
pressures, fires, blowouts, loss of circulation of drilling fluids or other
conditions may substantially delay or prevent completion of any well. Adverse
weather conditions can also hinder drilling operations.
DELAYS IN OBTAINING PERMITS FOR METHANE WELLS COULD IMPAIR OUR BUSINESS.
Drilling coal bed 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 play. 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.
IF WE ARE NOT THE OPERATOR OF OUR WELLS, WE WILL HAVE LITTLE OR NO CONTROL OVER
THE PROJECT.
If we are not the operator of the wells in which we have an interest,
we will have limited or no control over the project. More specifically, we will
have limited or no control over the following:
o the timing of the drilling and recompleting of wells;
o the timing and amounts of production; and
o the development and operating costs.
In addition, if we should produce natural gas, we may experience possible
negative gas balance conditions because the operator may sell to a purchaser
other than ours, which may cause a delay in the sale of gas to our interests.
WE MAY INCUR LOSSES AS A RESULT OF TITLE DEFICIENCIES IN THE PROPERTIES IN WHICH
WE INVEST.
It is our practice in acquiring oil and gas leases or undivided
interests in oil and gas leases not to undergo the expense of retaining lawyers
to examine the title to the mineral interest to be placed under lease or already
placed under lease. Rather, we will rely upon the judgment of oil and gas lease
brokers or landsmen who perform the field work in examining records in the
appropriate governmental office before attempting to place under lease a
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specific mineral interest. This practice is widely followed in the oil and gas
industry. Prior to the drilling of an oil and gas well, however, it is the
normal practice in the oil and gas industry for the person or company acting as
the operator of the well to obtain a preliminary title review of the spacing
unit within which the proposed oil and gas well is to be drilled to ensure there
are no obvious deficiencies in title to the well; however, neither we nor the
person or company acting as operator of the well will obtain counsel to examine
title to such spacing unit until the well is about to go into production. It
frequently happens, as a result of such examinations, that certain curative work
must be done to correct deficiencies in the marketability of the title, and such
curative work entails expense. The work might include obtaining affidavits of
heirship or causing an estate to be administered. It does happen, from time to
time, that the examination made by the title lawyers reveals that the oil and
gas lease or leases are worthless, having been purchased in error from a person
who is not the owner of the mineral interest desired. In such instances, the
amount paid for such oil and gas lease or leases is generally lost.
WE ARE SUBJECT TO ENVIRONMENTAL REGULATIONS THAT CAN ADVERSELY AFFECT THE TIMING
AND COST OF OUR OPERATIONS.
In general, our exploration activities are subject to certain federal,
state and local laws and regulations relating to environmental quality and
pollution control. Such laws and regulations increase the costs of these
activities and may prevent or delay the commencement or continuance of a given
operation. Since we have not yet commenced any drilling activities, compliance
with these laws and regulations has not had a material effect on our operations
or financial condition to date. Specifically, we are subject to legislation
regarding emissions into the environment, water discharges, and storage and
disposition of hazardous wastes. In addition, legislation has been enacted which
requires well and facility sites to be abandoned and reclaimed to the
satisfaction of state authorities. As of this date, we are unable to predict the
ultimate cost of compliance.
WE ARE SUBJECT TO GOVERNMENTAL REGULATIONS THAT MAY ADVERSELY AFFECT THE COST OF
OUR OPERATIONS.
Oil and gas exploration, development and production are subject to
various types of regulation by local, state and federal agencies. Legislation
affecting the oil and gas industry is under constant review for amendment and
expansion. Also, numerous departments and agencies, both federal and state, are
authorized by statute to issue and have issued rules and regulations binding on
the oil and gas industry and its individual members, some of which carry
substantial penalties for failure to comply. The regulatory burden on the oil
and gas industry increases our cost of doing business and, consequently, affects
our profitability. The possibility exists that laws and regulations enacted in
the future will adversely affect the oil and gas industry. Such new legislation
or regulations could drive up the cost of doing business to the point where our
projects would not be economically feasible.
Most states in which we own and operate properties have statutes, rules
and regulations governing conservation matters including the unitization or
pooling of oil and gas properties, establishment of maximum rates of production
from oil and gas wells and the spacing of such wells.
OUR COMPETITORS MAY HAVE GREATER RESOURCES THAT COULD ENABLE THEM TO PAY A
HIGHER PRICE FOR PROPERTIES.
The oil and gas industry is intensely competitive and we compete with
other companies which have greater resources. Many of such companies not only
explore for and produce crude oil and natural gas but also carry on refining
operations and market petroleum and other products on a worldwide basis. Such
companies may be able to pay more for productive oil and natural gas properties
and exploratory prospects, and to define, evaluate, bid for and purchase a
greater number of properties and prospects than our financial or human resources
permit. Our ability to acquire additional properties and to discover reserves in
the future will be dependent upon our ability to evaluate and select suitable
properties, to obtain funding and to consummate transactions in a highly
competitive environment. There is also competition between the oil and gas
industry and other industries with respect to the supply of energy and fuel to
industrial, commercial and individual customers. At this stage of our
development, we cannot predict if we will be able to effectively compete against
such companies.
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MARC A. BRUNER AND HIS AFFILIATES CONTROL A SIGNIFICANT PERCENTAGE OF OUR
OUTSTANDING COMMON STOCK, WHICH WILL ENABLE THEM TO CONTROL MANY SIGNIFICANT
CORPORATE ACTIONS AND MAY PREVENT A CHANGE IN CONTROL THAT WOULD OTHERWISE BE
BENEFICIAL TO OUR STOCKHOLDERS.
Marc A. Bruner beneficially owned approximately 18.2% of our stock as
of November 30, 2005. In addition, he is the father of our president, Marc E.
Bruner. This control by Mr. Bruner could have a substantial impact on matters
requiring the vote of the stockholders, including the election of our directors
and most of our corporate actions. This control could delay, defer or prevent
others from initiating a potential merger, takeover or other change in our
control, even if these actions would benefit our stockholders and us. This
control could adversely affect the voting and other rights of our other
stockholders and could depress the market price of our common stock.
OUR FUTURE OPERATING RESULTS MAY FLUCTUATE AND CAUSE THE PRICE OF OUR COMMON
STOCK TO DECLINE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES FOR INVESTORS.
Our limited operating history and the lack of production or reserve
reports on our properties make it difficult to predict accurately our future
operations. We expect that our operating results will fluctuate significantly
from quarter to quarter, due to a variety of factors, many of which are beyond
our control. If our operating results fall below the expectations of investors
or securities analysts, the price of our common stock could decline
significantly. The factors that could cause our operating results to fluctuate
include, but are not limited to:
o worldwide or regional demand for energy;
o domestic and foreign supply of natural gas and oil;
o weather conditions;
o domestic and foreign governmental regulations;
o political conditions in natural gas or oil producing regions;
o price and availability of alternative fuels;
o availability and cost of drilling equipment;
o our ability to establish and maintain key relationships with
lessors, drilling partners and drilling funds;
o the amount and timing of operating costs and capital
expenditures relating to maintaining our business, operations,
and infrastructure; and
o general economic conditions and economic conditions specific to
the energy sector.
These and other external factors have caused and may continue to cause
the market price and demand for our common stock to fluctuate substantially,
which may limit or prevent investors from readily selling their shares of common
stock and may otherwise negatively affect the liquidity of our common stock.
In the past, securities class action litigation has often been brought
against companies following periods of volatility in the market price of their
securities. If securities class action litigation is brought against us it could
result in substantial costs and a diversion of our management's attention and
resources, which could hurt our business.
OUR ISSUANCE OF THE CONVERTIBLE NOTES AND WARRANTS COULD SUBSTANTIALLY DILUTE
THE INTERESTS OF SHAREHOLDERS.
We issued convertible notes in 2004 that have an outstanding principal
balance of $12.5 million at November 30, 2005. We also issued $7.695 million in
notes in March 2005 and $10.0 million in notes in May 2005 These notes are
convertible into shares of our common stock at any time prior to their
respective maturity dates at a current conversion price of $1.25, subject to
adjustments for stock splits, stock dividends, stock combinations, and other
similar transactions. The initial conversion prices of these notes were $1.87
and $1.88. The conversion prices of the convertible notes could be further
lowered, perhaps substantially, in a variety of circumstances, including:
o our issuance of common stock below the convertible notes'
conversion prices, either directly or in connection with the
issuance of securities that are convertible into, or
exercisable for, shares of our common stock;
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o our failure to comply with specific registration and listing
obligations applicable to the common stock into which the
convertible notes are convertible; and
o our breaching other obligations to the holders of the
convertible notes.
In addition, we issued to the holders of convertible notes in August
2004 three-year warrants that currently entitle the warrant holders to purchase
an aggregate of 6,400,001 shares of our common stock at an exercise price of
$1.25 per share. As originally issued, these warrants were exercisable at $1.54
per share to purchase a total of 5,194,806 shares. We also issued three-year
warrants to the holders of convertible notes in March 2005 to purchase an
aggregate of 1,637,235 shares of our common stock at an exercise price of $1.88
per share. The exercise price of this warrant has been lowered to $1.25 per
share. Both the number of warrants and the exercise price are subject to
adjustments that could make them further dilutive to our shareholders. In
addition, the warrants issued in August 2004 and the notes issued in May 2005
provide for the issuance of additional warrants under certain circumstances.
Neither the convertible notes nor the warrants establish a "floor" that
would limit reductions in the conversion price of the convertible notes or the
exercise price of the warrants that may occur under certain circumstances.
Correspondingly, there is no "ceiling" on the number of shares that may be
issuable under certain circumstances under the anti-dilution adjustment in the
convertible notes and warrants. We also issued to the "finders" of the August
2004 and May 2005 financing transactions five-year warrants to purchase 400,000
shares of our common stock at an exercise price of $1.25 per share and 200,000
shares at an exercise price of $1.25 per share. Accordingly, our issuance of the
convertible notes and warrants could substantially dilute the interests of our
shareholders.
OUR FAILURE TO SATISFY OUR REGISTRATION, LISTING, AND OTHER OBLIGATIONS WITH
RESPECT TO THE COMMON STOCK UNDERLYING THE CONVERTIBLE NOTES AND THE WARRANTS
COULD RESULT IN ADVERSE CONSEQUENCES, INCLUDING ACCELERATION OF THE CONVERTIBLE
NOTES.
We are required to maintain the effectiveness of the registration
statement, of which this document forms a part, covering the resale of the
common stock underlying the convertible notes and warrants, until the earlier of
the date the underlying common stock may be resold pursuant to Rule 144(k) under
the Securities Act of 1933 or the date on which the sale of all the underlying
common stock is completed, subject to certain exceptions. We will be subject to
various penalties for failing to meet our registration obligations and the
related listing obligations for the underlying common stock, which include cash
penalties and the forced redemption of the convertible notes at the greater of:
o 125% of the principal amount, plus accrued interest; or
o the number of shares of our common stock issuable upon
conversion, multiplied by the weighted average price of our
common stock on the trading day immediately preceding our
registration or listing default.
WE ARE OBLIGATED TO MAKE SIGNIFICANT PERIODIC PAYMENTS OF PRINCIPAL AND INTEREST
UNDER OUR CONVERTIBLE NOTES.
We have a material amount of indebtedness outstanding under the
convertible notes. We are required to make monthly principal payments of
$833,333 and accrued interest under the terms of the August 2004 and October
2004 financings, as well as quarterly payments of accrued interest under the
terms of the May 2005 financing. The holders of the 2004 notes have given us a
deferral of the monthly payments to April 1, 2006. We may make the payments in
stock, subject to meeting certain conditions. If we at any time default on our
payment obligations the creditors will have all rights available under the
instrument, including acceleration, termination, and enforcement of security
interests. Such security interests cover all of our assets and those of our
subsidiaries.
FUTURE EQUITY TRANSACTIONS, INCLUDING EXERCISE OF OPTIONS OR WARRANTS, COULD
RESULT IN DILUTION.
From time to time, we sell restricted stock, warrants, and convertible
debt to investors in private placements. 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 stockholders.
Also, from time to time, options are issued to officers, directors, or
employees, with exercise prices equal to market. Exercise of in-the-money
options and warrants will result in
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dilution to existing stockholders. The amount of dilution will depend on the
spread between the market and exercise price, and the number of shares involved.
THE ISSUANCE OF SHARES UPON EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE
AND SUBSTANTIAL DILUTION TO OUR EXISTING STOCKHOLDERS.
The issuance of shares upon exercise of warrants may result in
substantial dilution to the interests of other stockholders since the selling
stockholders may sell the full amount issuable on exercise. In addition, such
shares would increase the number of shares in the "public float" and could
depress the market price for our common stock.
OUR OFFICERS, DIRECTORS, AND ADVISORS ARE ENGAGED IN OTHER BUSINESSES, WHICH MAY
RESULT IN CONFLICTS OF INTEREST.
Certain of our officers, directors, and advisors also serve as
directors of other companies or have significant shareholdings in other
companies. For example, Marc A. Bruner, our largest shareholder, serves as the
chairman of the board of Gasco Energy, Inc. and chairman of the board and
president of Falcon Oil & Gas Ltd. ("Falcon"), and is involved with other
natural resource companies. In addition, C. Tony Lotito, a director, is also a
director of Gasco Energy, Inc. and is involved with other natural resource
companies. Marc A. Bruner is the father, and C. Tony Lotito is the stepfather,
of our President, Marc E. Bruner. To the extent that such other companies
participate in ventures in which we may participate, or compete for prospects or
financial resources with us, these officers and directors will have a conflict
of interest in negotiating and concluding terms relating to the extent of such
participation. In the event that such a conflict of interest arises at a meeting
of the board of directors, a director who has such a conflict must disclose the
nature and extent of his interest to the board of directors and abstain from
voting for or against the approval of such participation or such terms.
In March 2005, we entered into an agreement to acquire an initial
58-1/3% working interest in 4,000 net undeveloped mineral acres in the Piceance
Basin in Colorado. The sellers were not willing to enter into the agreement
without having some agreement regarding the remaining 41-2/3% working interest
in the subject properties. Since we had previously decided that our maximum
commitment should not exceed that provided in the agreement, it was necessary to
find a third party to take the remaining working interest. Marc A. Bruner was
willing to provide a guaranteed payment to the sellers and enter into an
agreement with the sellers to acquire a 16-1/3% working interest for such
payment, with the option to acquire up to all of the then remaining 25% working
interest in the subject properties by investing an additional sum. The members
of our board of directors who did not have a conflict of interest unanimously
approved this arrangement. We entered into a participation agreement with Mr.
Bruner in March 2005.
In March 2005, Mr. Bruner assigned all of his rights and obligations
under our participation agreement to Exxel Energy Corp., a British Columbia
corporation whose stock is trading on the TSX Venture Exchange. As of December
14, 2005, Mr. Bruner owned approximately 21.7% of the outstanding common stock
of Exxel Energy. Our participation agreement with Exxel Energy, as amended,
establishes our working interest at 25%, with Exxel having a 75% interest.
In June 2005, we entered into a farm-out agreement with Falcon to
evaluate the 21,538 gross acre concession held by our subsidiary in the Jiu
Valley Coal Basin in Romania, which was issued to Pannonian by the Romanian
government in October 2002. The terms of the farmout agreement were essentially
the same as those that had been negotiated with a U.K. company, which is
unaffiliated with and unrelated to either us, Falcon or any of the officers or
principal shareholders thereof. After the U.K. company declined to proceed with
the farmout, Falcon offered to accept the farmout on essentially the same terms.
The members of our board of directors who did not have a conflict of interest
unanimously approved the farmout agreement with Falcon.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates by reference "forward-looking
statements." All statements other than statements of historical facts included
or incorporated by reference in this report, including, without limitation,
statements regarding our future financial position, business strategy, budgets,
projected costs and plans and objectives of management for future operations,
are forward-looking statements. In addition, forward-looking
9
statements
generally can be identified by the use of forward-looking terminology such as
"may," "will," "expect," "intend," "project," "estimate," "anticipate,"
"believe," or "continue" or the negative thereof or variations thereon or
similar terminology. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot give any assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from our expectations ("Cautionary
Statements") include, but are not limited to, our assumptions about energy
markets, production levels, reserve levels, operating results, competitive
conditions, technology, the availability of capital resources, capital
expenditure obligations, the supply and demand for oil and natural gas, the
price of oil and natural gas, currency exchange rates, the weather, inflation,
the availability of goods and services, drilling risks, future processing
volumes and pipeline throughput, general economic conditions (either
internationally or nationally or in the jurisdictions in which we are doing
business), legislative or regulatory changes (including changes in environmental
regulation, environmental risks and liability under federal, state and foreign
environmental laws and regulations), the securities or capital markets and other
factors described in "Risk Factors" above and disclosed in our reports filed
with the SEC. All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in
their entirety by the cautionary statements. We assume no duty to update or
revise our forward-looking statements based on changes in internal estimates or
expectations or otherwise.
USE OF PROCEEDS
We will not receive any of the proceeds from the selling stockholders
of shares of our common stock. However, we may receive the sale price of any
common stock we sell to the selling stockholders upon exercise of the warrants.
We expect to use the proceeds received from the exercise of warrants, if any,
for general working capital purposes. The warrants contain a provision for
cashless exercise under certain circumstances. If that provision is utilized, we
will not receive any proceeds.
SELLING STOCKHOLDERS
This prospectus relates to the resale of 5,409,756 shares of common
stock issuable upon conversion of or as interest on the convertible notes issued
in May 2005. We previously registered the shares issuable upon conversion of the
notes, but the conversion price was lowered, making it necessary to register
additional shares. We are registering the additional shares in order to permit
the selling stockholders to offer the shares of common stock for resale from
time to time. Except for the ownership of these convertible notes, the selling
stockholders have not had any material relationship with us within the past
three years.
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the common stock by the selling
stockholders. All of the selling stockholders own shares of common stock and/or
securities convertible into and/or exercisable for shares of common stock, the
resale of which has been registered in another registration statement. The
second column lists for each selling stockholder the number of shares of common
stock held, plus the number of shares of common stock, based on its ownership of
all of the convertible notes and the warrants, that would have been issuable to
such selling stockholders as of December 1, 2005, assuming conversion of all
convertible notes plus accrued interest thereon as of such date and exercise of
the warrants held by such selling stockholders on that date, without regard to
any limitations on conversions or exercise. The third column lists the shares of
common stock being offered by this prospectus by each selling stockholder. We
will file a new registration statement to cover the resale of any shares beyond
the amounts included in this prospectus.
In accordance with the terms of the registration rights agreement with
the holders of the convertible notes, this prospectus generally covers the
resale of the additional shares needed due to the lowering of the conversion
price of the notes. Accordingly, the number of shares being registered is at
least that number of shares of common stock equal to 175% of the number of
shares of common stock issuable upon conversion of the convertible notes, less
the number of shares already registered for resale. The fourth column assumes
the sale of all of the shares offered by the selling stockholders pursuant to
this prospectus.
10
Under the terms of the convertible notes and the warrants, the selling
stockholders may not convert the convertible notes, or exercise the warrants, to
the extent such conversion or exercise would cause the selling stockholder,
together with its affiliates, to have acquired a number of shares of common
stock which would exceed 4.99% of our then outstanding common stock, excluding
for purposes of such determination shares of common stock issuable upon
conversion of the convertible notes which have not been converted and upon
exercise of the warrants which have not been exercised. The number of shares in
the second column does not reflect this limitation. The selling stockholders may
sell all, some or none of their shares in this offering. See "Plan of
Distribution."
NUMBER OF OWNERSHIP AFTER OFFERING
SHARES SHARES
BENEFICIALLY REGISTERED
OWNED FOR RESALE NUMBER OF
NAME OF SELLING STOCKHOLDER (1)<F1> (2)<F2> (2)<F2> SHARES PERCENT
HFTP Investment L.L.C (3)<F3> 13,132,950 2,798,250 0 0%
Gaia Offshore Master Fund, Ltd. (3)<F3> 3,353,815 722,130 0 0%
Caerus Fund Ltd. (3)<F3> 419,102 90,267 0 0%
Leonardo, L.P. (4)<F4> 2,727,013 1,799,109 0 0%
- ------------------
<FN>
(1)<F1> The shares of common stock considered beneficially owned by each
selling stockholder include that number of shares of our common stock
that such selling stockholder could acquire by converting its
convertible notes at the conversion price, taking into account accrued
but unpaid interest as of December 1, 2005, and by exercising its
warrants, if any.
(2)<F2> The selling stockholders may sell up to 5,409,756 shares of our common
stock under this prospectus. The selling stockholders may convert the
convertible notes into shares of our common stock at any time at their
respective initial conversion prices, subject to certain adjustments.
The conversion price of the notes is currently $1.25. We may elect to
satisfy our obligation to make payments under the convertible notes by
requiring conversion of such payment into shares of our common stock.
If such a conversion takes place, the conversion price, subject to
certain anti-dilution adjustments, would be the lower of:
o the conversion price of $1.25, as the case may be; or
o 93% of the average of the weighted average trading price of
our common stock on the trading day prior to conversion during
the time period to which the installment relates.
The number of shares registered is at least 175% of the shares of our
common stock underlying the convertible notes at $1.25, less the number
of shares already registered.
(3)<F3> Promethean Asset Management, LLC, a New York limited liability company
("Promethean"), serves as investment manager to HFTP Investment L.L.C.
("HFTP"), Gaia Offshore Master Fund, Ltd. ("Gaia"), and Caerus Fund
Ltd. ("Caerus") and may be deemed to share beneficial ownership of the
shares beneficially owned by HFTP, Gaia, and Caerus. The ownership
information for each of these three selling stockholders does not
include the ownership information for the others. Promethean disclaims
beneficial ownership of the shares beneficially owned by HFTP, Gaia,
and Caerus and each of HFTP, Gaia, and Caerus disclaims beneficial
ownership of the shares beneficially owned by the others. James F.
O'Brien, Jr. indirectly controls Promethean. Mr. O'Brien disclaims
beneficial ownership of the shares beneficially owned by Promethean,
HFTP, Gaia, and Caerus.
(4)<F4> Leonardo Capital Management, Inc.("LCMI") is the sole general partner
of Leonardo, L.P. Angelo, Gordon & Co., L.P. ("Angelo, Gordon") is the
sole director of LCMI. John M. Angelo and Michael L. Gordon are the
principal executive officers of Angelo, Gordon & Co., L.P. Each of
Angelo, Gordon & Co., L.P. and Messrs. Angelo and Gordon disclaim
beneficial ownership of the shares held by Leonardo, L.P.
</FN>
11
PLAN OF DISTRIBUTION
We are registering the resale of shares of common stock held by selling
stockholders, and shares of common stock issuable upon conversion of the
convertible notes and upon exercise of the warrants to permit the resale of the
shares of common stock by the holders of the convertible notes and the warrants
from time to time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling stockholders of the shares of common
stock. We will bear all fees and expenses incident to our obligation to register
the shares of common stock.
The selling stockholders may sell all or a portion of the common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the common stock
is sold through underwriters or broker-dealers, the selling stockholders will be
responsible for underwriting discounts or commissions or agent's commissions.
The common stock may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,
(1) on the American Stock Exchange or any other national securities
exchange or quotation service on which the securities may be
listed or quoted at the time of sale,
(2) in the over-the-counter market,
(3) in transactions otherwise than on these exchanges or systems or
in the over-the-counter market,
(4) through the writing of options, whether such options are listed
on an options exchange or otherwise, or
(5) through the settlement of short sales.
If the selling stockholders effect such transactions by selling shares
of common stock to or through underwriters, broker-dealers or agents, such
underwriters, brokers-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, brokers-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the common stock or otherwise, the selling stockholders may enter
into hedging transactions with broker-dealers, which may in turn engage in short
sales of the common stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions,
provided that the short sale is made after the registration statement is
declared effective and a copy of this prospectus is delivered in connection with
the short sale. The selling stockholders may also loan or pledge shares of
common stock to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge or grant a security interest in
some or all of the convertible notes, warrants, or shares of common stock owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to the prospectus. The selling stockholders also may
transfer or donate the shares of common stock in other circumstances, in which
case the transferees, donees or other successors in interest will be the selling
beneficial owners for purposes of the prospectus.
The selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions paid, or any
discounts or concessions allowed to any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
Each of HFTP Investment L.L.C., Gaia Offshore Master Fund, Ltd., Caerus
Fund Ltd., and Leonardo, L.P. has advised us that it purchased the
12
convertible notes in the ordinary course of its business and at the time such
selling stockholder purchased the convertible notes it was not a party to any
agreement or other understanding to distribute the securities, directly or
indirectly.
Under the securities laws of some states, the shares of common stock
may be sold in such states only through registered or licensed brokers or
dealers. In addition, in some states the shares of common stock may not be sold
unless such shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied
with.
There can be no assurance that any selling stockholder will sell any or
all of the shares of common stock registered pursuant to the registration
statement of which this prospectus forms a part.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M of the Exchange Act, which may limit the timing of purchases and sales of any
of the shares of common stock by the selling stockholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the shares of common stock to engage in
market-making activities with respect to the shares of common stock. All of the
foregoing may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common
stock pursuant to the registration rights agreement estimated to be $25,000 in
total, including, without limitation, Commission filing fees and expenses of
compliance with state securities or "blue sky" laws; provided, however, that the
selling stockholders will pay all underwriting discounts and selling
commissions, if any. In connection with sales made pursuant to this prospectus,
we will indemnify the selling stockholders against liabilities, including some
liabilities under the Securities Act, or the selling stockholders will be
entitled to contribution, in accordance with the registration rights agreement.
We will be indemnified by the selling stockholders against civil liabilities,
including liabilities under the Securities Act that may arise from any written
information furnished to us by the selling stockholders for use in this
prospectus, or we will be entitled to contribution, in accordance with the
registration rights agreement.
Once sold under the registration statement of which this prospectus
forms a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.
LEGAL MATTERS
Dill Dill Carr Stonbraker & Hutchings, P.C., Denver, Colorado, has
given an opinion on the validity of the securities.
EXPERTS
The financial statements as of and for the year ended November 30, 2004
incorporated by reference in this prospectus and registration statement have
been audited by Hein & Associates LLP, an independent registered public
accounting firm, to the extent and for the periods indicated in their report
also incorporated by reference, and are included in reliance upon such report
and upon the authority of such firm as experts in accounting and auditing.
The financial statements as of and for the year ended November 30, 2003
incorporated by reference in this prospectus and registration statement have
been audited by Wheeler Wasoff, P.C., an independent registered public
accounting firm, to the extent and for the periods indicated in their report
also incorporated by reference, and are included in reliance upon such report
and upon the authority of such firm as experts in accounting and auditing.
13
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting and other requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith file or
furnish reports, proxy statements and other information with the SEC. These
reports, proxy statements and other information may be read and copied at the
Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549.
Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. Reports, proxy and information statements and
other information about us that we file or furnish electronically with the SEC
are available at the SEC's website at www.sec.gov or at our website at
www.galaxyenergy.com.
The information in this prospectus itself may not contain all the
information that may be important to your decision whether to invest in the
common stock. You should read the entire prospectus, including the documents
incorporated by reference into the prospectus (as well as the exhibits to those
documents), before making an investment decision.
Any statement contained in any document included herein shall be deemed
to be modified or superseded, for purposes of this prospectus, to the extent
that a statement contained in or omitted from this prospectus, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We disclose important information to you by referring you to documents
that we have previously filed with the SEC or documents we will file with the
SEC in the future. We hereby incorporate by reference the following documents
into this prospectus:
o our amended Annual Report on Form 10-K/A (Amendment No. 1) for
the fiscal year ended November 30, 2004, filed with the SEC
on March 17, 2005;
o our Quarterly Reports on Form 10-Q for the quarters ended
February 28, 2005 (filed April 14, 2005), May 31, 2005 (filed
July 15, 2005), and August 31, 2005 (filed October 17, 2005);
o our Current Reports on Form 8-K dated April 4, 2005 (filed
April 4, 2005), May 31, 2005 (filed June 1, 2005), June 15,
2005 (filed June 15, 2005), July 26, 2005 (filed July 29,
2005), November 16, 2005 (filed November 17, 2005), November
22, 2005 (filed November 22, 2005), and December 1, 2005
(filed December 2, 2005); and on Form 8-K/A dated March 1,
2005 (Amendment Nos. 1, 2, 3 and 4 filed March 21, 2005, May
26, 2005, June 2, 2005, and October 6, 2005, respectively) and
May 31, 2005 (Amendment No. 1 filed June 2, 2005); and
o the description of our common stock contained in our
registration statement on Form 10SB12G/A filed with the SEC on
March 2, 2001, and all amendments and reports filed by us to
update that description.
Additionally, all documents filed by us with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
after the date of this prospectus and before the termination or completion of
this offering shall be deemed to be incorporated by reference into this
prospectus from the respective dates of filing of such documents. Any
information that we subsequently file with the SEC that is incorporated by
reference as described above will automatically update and supersede any
previous information that is part of this prospectus.
Upon written or oral request, we will provide you without charge, a
copy of any or all of the documents incorporated by reference, other than
exhibits to those documents unless the exhibits are specifically incorporated by
reference in the documents. Please send requests to Galaxy Energy Corporation,
Attn: Investor Relations, 1331 - 17th Street, Suite 1050, Denver, Colorado
80202, or call (303) 293-2300.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by the registrant in connection with the
securities being registered are as follows:
Securities and Exchange Commission filing fee........$ 781
Accounting fees and expenses......................... 5,000
Blue sky fees and expenses........................... 1,000
Legal fees and expenses.............................. 10,000
Transfer agent fees and expenses..................... 1,000
Printing expenses.................................... 2,000
Miscellaneous expenses............................... 5,219
--------------
Total................................................$ 25,000
==============
All amounts are estimates except the SEC filing fee. Under the terms of
the registration rights agreement with the selling stockholders, the registrant
has agreed to pay all reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with the registration.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Colorado Business Corporation Act, the registrant has broad
powers to indemnify its directors and officers against liabilities they may
incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). The registrant's Bylaws (Exhibit 3.2
hereto) also provide for mandatory indemnification of its directors and
executive officers, and permissive indemnification of its employees and agents,
to the fullest extent permissible under Colorado law.
ITEM 16. EXHIBITS
- --------------------------------------------------------------------------------
REGULATION S-K
NUMBER EXHIBIT
- --------------------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated as of November 1,
2002 by and among Galaxy Investments, Inc., Dolphin Acquisition
Corporation and Dolphin Energy Corporation (1)
- --------------------------------------------------------------------------------
2.2 Share Exchange Agreement by and between Galaxy Investments,
Inc. and Pannonian International, Ltd. (2)
- --------------------------------------------------------------------------------
5.1 Opinion of Dill Dill Carr Stonbraker & Hutchings, P.C.
- --------------------------------------------------------------------------------
23.1 Consent of Dill Dill Carr Stonbraker & Hutchings, P.C.
Reference is made to Exhibit 5.1
- --------------------------------------------------------------------------------
23.2 Consent of Wheeler Wasoff, P.C.
- --------------------------------------------------------------------------------
23.3 Consent of Hein & Associates LLP
- --------------------------------------------------------------------------------
- -----------------
(1) Incorporated by reference to the exhibits to the registrant's current
report on Form 8-K dated November 13, 2002, filed December 6, 2002,
file number 0-32237.
(2) Incorporated by reference to the exhibits to the registrant's current
report on Form 8-K dated May 7, 2003, filed May 13, 2003, file number
0-32237.
II-1
ITEM 17. 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 (a)1(i) and (a)1(ii) of this
section do not apply 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 section 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 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) 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
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(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 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 Act
and will be governed by the final adjudication of such issue.
II-2
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 of 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 Denver, State of Colorado on December 16, 2005.
GALAXY ENERGY CORPORATION
By: /s/ MARC E. BRUNER
-----------------------------------------
Marc E. Bruner, President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated:
SIGNATURE TITLE DATE
President and Director (Principal Executive
/s/ MARC E. BRUNER Officer) December 15, 2005
- ------------------------------------
Marc E. Bruner
Senior Vice President, Chief Financial
Officer, Secretary, and Treasurer (Principal
/s/ CHRISTOPER S. HARDESTY Financial Officer) December 16, 2005
- ------------------------------------
Christopher S. Hardesty
Vice President - Administration and
/s/ RICHARD E. KURTENBACH Controller (Principal Accounting Officer) December 16, 2005
- ------------------------------------
Richard E. Kurtenbach
/s/ CARMEN J. LOTITO Director December 16, 2005
- ------------------------------------
Carmen J. Lotito
/s/ NATHAN C. COLLINS Director December 15, 2005
- ------------------------------------
Nathan C. Collins
/s/ DR. JAMES M. EDWARDS Director December 16, 2005
- ------------------------------------
Dr. James M. Edwards
Director December __, 2005
- ------------------------------------
Robert Thomas Fetters, Jr.
/s/ CECIL D. GRITZ Director December 16, 2005
- ------------------------------------
Cecil D. Gritz
/s/ THOMAS W. ROLLINS Director December 16, 2005
- ------------------------------------
Thomas W. Rollins
II-3