As filed with the Securities and Exchange Commission on February __, 2002
Registration No. 333____________
Securities and Exchange Commission
Washington, D.C. 20549
---------------
FORM S-3
Registration Statement
Under the Securities Act of 1933
U.S. ENERGY CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wyoming
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
83-0205516
- --------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
877 North 8th West, Riverton, Wyoming 82501; Tel. 307.856.9271
- --------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of issuer's principal executive offices)
Daniel P. Svilar, 877 North 8th West
Riverton, WY 82501; Tel. 307.856.9271
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number of agent for service)
Copies to: Stephen E. Rounds, Esq.
The Law Office of Stephen E. Rounds
4635 East 18th Ave., Denver, CO 80220
Tel: 303.377.6997; Fax: 303.377.0231
---------------
Approximate date of commencement and end of proposed sale to the public: From
time to time after the registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering:[ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Proposed Maximum
Amount of Maximum Aggregate
Title of Each Class Securities Offering Dollar Price Amount
of Securities to be Registered Price Per of Securities to of
to be Registered in the Offering Security be Registered Fee
- ---------------- --------------- -------- ------------- -----------
Common Stock 20,000 $2.62 $ 52,400(1) $ 13
Shares
Total No. Securities
to be Registered 20,000 $ 52,400 $ 13
Shares
(1) These shares being registered for resale under this registration statement
are issuable on exercise of options (expiring February 28, 2002) at $2.62
per share, issued to consultant R. J. Falkner.
DELAYING AMENDMENT UNDER RULE 473(A): The registrant hereby amends this
registration statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall become effective in
accordance with section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the Commission
acting pursuant to section 8(a), may determine.
The information in this prospectus is subject to completion or amendment. The
securities covered by this prospectus cannot be sold until the registration
statement filed with the Securities and Exchange Commission becomes effective.
This prospectus shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any state in
which an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of that state.
1
U.S. ENERGY CORP.
20,000 SHARES OF COMMON STOCK
This prospectus covers the offer and sale of up to 20,000 shares of common
stock ($0.01 par value) by the holder of options on exercise of the options. The
shares are offered for sale by the selling shareholder.
In this prospectus, "selling shareholder" refers to R. Jerry Falkner (see
"Selling Shareholder"). In this prospectus, and the information incorporated by
reference, "we," "company," and "USE" refer to U.S. Energy Corp. (and its
subsidiaries unless otherwise specifically stated).
The selling shareholder may sell the shares from time to time in negotiated
transactions, brokers' transactions or a combination of such methods of sale at
market prices prevailing at the time of sale or at negotiated prices. Although
we will receive proceeds if and to the extent the options are exercised, we will
not receive any proceeds from sale of any of the shares offered by the selling
shareholder. None of the options have been exercised at prospectus date.
USE is traded ("USEG") on the Nasdaq National Market System ($4.20 on
February 15, 2002).
AN INVESTMENT IN THE SHARES OFFERED BY THIS PROSPECTUS IS SPECULATIVE AND
SUBJECT TO RISK OF LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 10 AND THE TABLE
OF CONTENTS ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS FEBRUARY __, 2002.
2
TABLE OF CONTENTS
PAGE NO.
Representations About This Offering..........................................4
Forward Looking Statements...................................................4
Summary Information..........................................................4
The Company..........................................................4
The Offering.........................................................6
Description of Securities....................................................6
Risk Factors ................................................................9
Risk Factors Involving the Company...........................................9
We Have No Revenues from Coalbed Methane
Production, and Have Not Established Reserves
for Our Coalbed Methane Properties......................................9
Limited Amount of Working Capital, Accumulated Deficit,
and Current and Projected Financial Requirements........................9
We are subject to certain kinds of risk which are unique
to the minerals business...............................................10
Delays in Obtaining Permits for Methane
Wells Could Impair Our Business........................................10
Terms of subsequent financings may
adversely impact your investment.......................................11
Risk Factors Involving This Offering........................................12
Use of Proceeds.............................................................12
Selling Shareholder.........................................................12
Plan of Distribution........................................................13
Disclosure of Commission Position on Indemnification........................15
Where to Find More Information About Us.....................................15
Incorporation of Certain Information by Reference...........................16
3
REPRESENTATIONS ABOUT THIS OFFERING
We have not authorized anyone to provide you with information different
from that contained in this prospectus. This prospectus is not an offer to sell
nor does it seek an offer to buy the shares in any jurisdiction where this offer
or sale is not permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus (or any supplement), regardless
of when it is delivered or when any shares are sold.
FORWARD LOOKING STATEMENTS
We make statements in this prospectus which are considered to be "forward
looking" statements. All statements (other than statements of historical fact)
about financial and business strategy and the performance objectives of
management are forward-looking statements. These forward-looking statements are
based on the beliefs of management, as well as assumptions made by and
information currently available to them. These statements involve risks that are
both known and unknown, including unexpected economic and market factors,
failure to accurately forecast operating and capital expenditures and capital
needs (due to rising costs and/or different drilling and production conditions
in the field), changes in timing or conditions for getting regulatory approvals
to drill coalbed methane wells where needed, and other business factors. The use
of the words "anticipate," "believe," "estimate," "expect," "may," "will,"
"should," "continue," "intend" and similar words or phrases, are intended by us
to identify forward-looking statements (also known as "cautionary statements"
because you should be cautious in evaluating such statements in the context of
all the information in this prospectus and the information incorporated by
reference into this prospectus). These statements reflect our current views with
respect to future events. They are subject to the realization in fact of
assumptions, but what we now think will happen may be turn out much different,
and our assumptions may prove to have been inaccurate or incomplete.
The investment risks discussed under "Risk Factors" specifically address
some (but not all) of the factors that may influence future operating results
and financial performance. Those investment risks are not "boiler plate" but are
intended to tell you about the uncertainties and risks inherent in our business
at the present time which you need to evaluate before making your investment
decision.
SUMMARY INFORMATION
The following summarizes some of the information found elsewhere in this
prospectus and the information incorporated into it by reference. This summary
is qualified by the more detailed information in this prospectus and the
information incorporated by reference.
THE COMPANY
U.S. Energy Corp. is a Wyoming corporation, formed in 1966, in the business
of acquiring, exploring, developing and/or selling or leasing mineral
properties, and the mining and marketing of minerals. We now are engaged in
three principal mineral sectors: coalbed methane gas, uranium, and gold
(properties and other assets included in the uranium and gold sectors currently
are in care and maintenance status). The most significant uranium properties are
located on Sheep Mountain in Wyoming, and in southeast Utah. We also hold a
royalty interest in claims on Green Mountain, Wyoming, now held by Kennecott
Uranium Company (see below). The gold property is located in Sutter Creek,
California, east of Sacramento. Interests are held in other mineral properties
(principally molybdenum),
4
but are either non-operating interests or undeveloped claims. Small oil and gas
operations in Montana and Wyoming are conducted as well. Other business segments
are commercial (real estate and general aviation) and construction operations.
Our fiscal year ends May 31.
The coalbed methane gas business is conducted through Rocky Mountain Gas,
Inc. ("RMG," a Wyoming corporation owned 45.9% by USE and 45.9% by Crested Corp.
(Crested is a 70.5% majority-owned subsidiary of the company, see below)).
Properties of RMG are held in southeastern Montana and north-eastern and
southwestern Wyoming.
USE and Crested Corp. ("Crested") originally were independent companies,
with two common affiliates (John L. Larsen and Max T. Evans). In 1980, USE and
Crested formed a joint venture (referred to as the "USECC") to do business
together (unless one or the other elected not to pursue an individual project).
As a result of USE funding certain of Crested's obligations from time to time
(due to Crested's lack of cash on hand), and later payment of debts by Crested
issuing common stock to USE, Crested became a majority-owned subsidiary of USE
in fiscal 1993. In fiscal 2001, Crested issued another 6,666,666 shares of
common stock to reduce Crested's debt owed to USE by $3.0 million, which
increased USE's ownership of Crested to 70.5%.
All of USE's (and Crested's) operations are in the United States. Principal
executive offices for USE are located in the Glen L. Larsen building at 877
North 8th Street West, Riverton, Wyoming 82501, telephone 307.856.9271; fax
307.857.3050.
Most of the company's (USE's) operations are conducted through
subsidiaries, the USECC joint venture with Crested, and various jointly-owned
subsidiaries of USE and Crested.
Until September 11, 2000, USE and Kennecott Uranium Company ("Kennecott"),
owned the Green Mountain Mining Venture ("GMMV"), which held a large uranium
deposit and uranium mill in Wyoming. On September 11, 2000, USE and Crested
settled litigation with Kennecott involving the GMMV by selling their interest
in the GMMV and its properties back to Kennecott for $3.25 million and receiving
a royalty interest in the uranium properties. Kennecott also assumed all
reclamation obligations on the GMMV properties. Other principal uranium
properties and an uranium mill in southeast Utah are held by Plateau Resources
Ltd., a wholly-owned subsidiary of USE. The Utah uranium properties are also in
a care and maintenance status. At some future date, if the uranium oxide market
improves, USE and Crested may consolidate their remaining uranium assets into a
single subsidiary and finance the startup of its mines and mill operations,
subject to obtaining the necessary debt or equity funding. There are no current
plans to implement this strategy at the present time.
The gold assets held by Sutter Gold Mining Company ("SGMC"), a
majority-owned subsidiary of USE, are also in a care and maintenance status
because the current price of gold is too low to raise the capital necessary to
put the properties into production.
5
THE OFFERING
Securities Outstanding 11,598,947 shares of common stock, $0.01 par
value, including 1,423,460 restricted shares
issued in January 2002 in exchange for
restricted shares of Rocky Mountain Gas, Inc.
("RMG") and in conversion of preferred stock
of USE, for which the exchanging
shareholders, and the holder of the USE
preferred stock , originally had invested
$5,309,000. The shares of common stock of USE
were issued based on the market price of
$3.92 on December 5, 2001, and the original
investment amount for RMG and preferred
stock, plus $270,959 of interest owed three
of the investors.
Securities To Be Outstanding 11,618,947 shares of common stock, $0.01 par
value, assuming all options held by the
selling shareholder were exercised as of the
date of this prospectus.
Securities Offered 20,000 shares of common stock owned or to be
owned by the selling shareholder.
Use of Proceeds We will not receive any proceeds from sale of
shares by the selling shareholder, but we
will receive proceeds from exercise of the
options, if they are exercised, which will be
used by the company for working capital.
Plan of Distribution The offering is made by the selling
shareholder named in this prospectus, to the
extent he sells shares. Sales may be made in
the open market or in private negotiated
transactions, at fixed or negotiated prices.
See "Plan of Distribution."
Risk Factors An investment is subject to risk. See "Risk
Factors."
DESCRIPTION OF SECURITIES
COMMON STOCK. We are authorized by our articles of incorporation to issue
an unlimited number of shares of common stock, $0.01 par value, and 100,000
shares of preferred stock, $0.01 par value.
Shares of common stock may be issued for such consideration and on such
terms as determined by the board of directors, without shareholder approval.
Holders are entitled to receive dividends when and as declared by the board of
directors out of funds legally available therefor. There are no restrictions on
payment of cash dividends. Cash dividends have not been declared on the common
stock, although a 1 for 10 stock dividend was declared in November 1990. It is
anticipated that future earnings would be reinvested into operations and not
declared as dividends on the common stock. All holders of shares of common stock
have equal voting rights, and the shares of common stock sold in this offering
will have the same rights. Holders of shares of common stock are entitled to one
vote per share on all matters upon which such holders are entitled to vote, and
further have the right to cumulate their votes in elections of
6
directors. Cumulation means multiplying the number of shares held, by the number
of nominees to the board of directors, then voting the product among the
nominees as desired. Directors are elected by a plurality of the votes cast.
Shares of common stock sold in this offering are fully-paid and
nonassessable shares of U.S. Energy Corp.
Pursuant to our articles of incorporation and as permitted by Wyoming law,
shares of common stock held by our subsidiaries may be voted by such
subsidiaries as determined by the board of directors of each, in elections of
directors and other matters brought before shareholders.
In September 2001, the company adopted a shareholder rights plan ("poison
pill") and filed the plan with the Securities and Exchange Commission as an
exhibit to Form 8-A. The following three paragraphs briefly state principal
features of the plan, which are qualified by reference to the complete plan,
which is incorporated by reference into this prospectus.
Under the plan, the holder of each share of common stock has the right to
purchase (when the rights become exercisable) from the company one-one
thousandth (1/1,000th) of one (1) share of Series P preferred stock at price of
$200.00 per for each one-one thousandth (1/1,000th) share of such preferred
stock. The purpose of the plan is to deter an unfairly low priced hostile
takeover of the company, by encouraging a hostile party to negotiate a fair
offer with the board of directors and thus eliminate the poison pill.
The rights trade with the common stock and aren't separable therefrom; no
separate certificate for the rights is issued unless and until there is a
hostile takeover attempted, after which time separate and tradable rights
certificates would be issued.
The rights are not exercisable and never can be unless and until a hostile
(not negotiated with the board) takeover of the company is initiated with the
objective of acquiring 15% of the company's voting stock. If before the takeover
is launched the hostile party comes to agreement with the board of directors
about price and terms and makes a "qualified offer" to buy the stock of the
company, then the board of directors may redeem (buy back) the rights for $0.01
each. But, if such a "qualified offer" isn't agreed upon, then the rights are
exercisable for preferred stock, which in turn would enable to holder to convert
the preferred stock into voting common stock of the company at a price equal to
one-half the market price.
PREFERRED STOCK. Shares of preferred stock may be issued by the board of
directors with such dividend, liquidation, voting and conversion features as may
be determined by the board of directors without shareholder approval. In June
2000, we established a Series A Convertible Preferred Stock, for which 1,000
shares of preferred stock are reserved for sale at $10,000 per share; 200 shares
were issued and outstanding at November 30, 2001. In January 2002, we converted
the 200 outstanding shares of Series A stock by issuing 513,140 shares of
restricted common stock to the holder, based on $2,000,000 invested plus $11,507
of interest (annual rate of 7.5%) which accrued in December 2001 (previous
interest had been paid in cash), divided by $3.92 (market price for USE stock on
December 5, 2001).
WARRANTS. As of the date of this prospectus, warrants and options (to
persons or entities other than employees, officers or directors of the company)
are issued and outstanding to purchase a total of 389,958 shares of common
stock:
7
o Warrants to purchase 10,000 shares at $3.75 held by Kevin P. Daly, issued
as of October 18, 2001 and expiring October 18, 2003. Resale of shares acquired
on exercise of these warrants is covered by a prospectus filed pursuant to Rule
424(b)(2).
o Warrants to purchase 50,000 shares at $3.00 held by CAYDAL, LLC, issued
on October 24, 2001 and expiring October 24, 2003. Resale of shares acquired on
exercise of these warrants is covered by a prospectus filed pursuant to Rule
424(b)(2).
o Warrants to purchase 67,933 shares at $3.75 held by 18 investors who
purchased shares and warrants in private transactions with the company from June
29, 2001 to October 18, 2001. These warrants were issued as of October 18, 2001
and expire October 18, 2003. Resale of shares acquired on exercise of these
warrants is covered by a prospectus filed pursuant to Rule 424(b)(2).
o Warrants to purchase 38,966 shares at $3.75 held by persons associated
with VentureRound Group LLC, which served as the Financial Advisor to the
company in connection with the private transactions from June to October 2001
(see above). These warrants were issued as partial compensation for services
provided to the company by the Financial Advisor. These warrants were issued as
of October 18, 2001 and expire October 18, 2006. Resale of shares acquired on
exercise of these warrants is covered by a prospectus filed pursuant to Rule
424(b)(2).
o Warrants to purchase 11,034 shares at $3.75 held by members of
VentureRound Group LLC. These warrants were issued for financial consulting
services provided by VentureRound Group LLC. These warrants were issued as of
November 2, 2001 and expire November 2, 2006. Resale of shares acquired on
exercise of these warrants is covered by a prospectus filed pursuant to Rule
424(b)(2).
o Warrants to purchase 67,025 shares at $3.64, issued in exchange for
Yellow Stone Fuels Corporation (a subsidiary of USE) warrants under a share
exchange agreement between YSFC and USE. The warrants expire September 18, 2002.
The shares acquired on exercise of these warrants are not restricted for resale,
as they are covered under a previously filed registration statement.
o Options to purchase 75,000 shares at $2.25 per share (expiring February
8, 2004), issued to consultant Michael Baybak. Resale of the shares acquired on
exercise of these options is not covered by a resale prospectus.
o Options to purchase 20,000 shares at $2.62 per share (expiring February
28, 2002), issued to consultant R. J. Falkner. Resale of the shares acquired on
exercise of these options is covered by this prospectus.
o Warrants to purchase 10,000 shares at $4.70 per share (expiring May 14,
2003), issued to consultant Riches in Resources, Inc. The warrants are not
exercisable unless the company's stock price closes at or above $6.50 per share
for 90 consecutive days before expiration of the options. Resale of the shares
acquired on exercise of these options is covered by a prospectus filed pursuant
to Rule 424(b)(2).
o Warrants to purchase 20,000 shares at $4.70 per share (expiring May 14,
2003), issued to consultant Riches in Resources, Inc. The warrants are not
exercisable until the company's stock price closes at or above $10.00 per share
for 90 consecutive days. Resale of the shares acquired on exercise of these
options is covered by a prospectus filed pursuant to Rule 424(b)(2).
8
o Options to purchase 20,000 shares at $3.98 per share, expiring April 10,
2006, issued to consultant R. J. Falkner and Company. Resale of the shares
acquired on exercise of these options is covered by a prospectus filed pursuant
to Rule 424(b)(2).
OPTIONS. At February 19, 2002, USE has granted options to employees,
officers and directors to purchase a total of 3,255,873 shares, at exercise
prices from $2.00 to $3.90 per share. These options expire at various times from
2002 to 2011.
RISK FACTORS
An investment in our common stock is speculative in nature and involves a
high degree of risk. You should carefully consider the following risks and the
other information in this prospectus (including the information incorporated by
reference) before investing.
RISK FACTORS INVOLVING THE COMPANY
WE HAVE NO REVENUES FROM COALBED METHANE PRODUCTION, AND HAVE NOT
ESTABLISHED RESERVES FOR OUR COALBED METHANE PROPERTIES. Presently we do not
have any wells in production, and we have not drilled and tested enough wells on
our properties to determine if we have economic reserves of coalbed methane in
place. For some properties, we will have to establish at least some reserve
parameters before gas transmission companies will build gas lines to our
properties, and construction of lines will depend also on then-current and
projected market prices for gas. If we have the necessary capital, we may elect
to build our own lines over to existing transmission lines near two of our
properties in the Powder River Basin in Wyoming. We can't sell production until
the lines and associated gathering lines and compression stations are
constructed.
Due to permitting delays in Montana, we may not realize production from the
Castle Rock and Kirby prospects until late 2002 or early 2003. Other properties
located in Wyoming could be in production in early to mid-2002, but production
might be delayed due to market prices for gas.
LIMITED AMOUNT OF WORKING CAPITAL, ACCUMULATED DEFICIT, AND CURRENT AND
PROJECTED FINANCIAL REQUIREMENTS. At November 30, 2001, U.S. Energy Corp. had
working capital of $2,215,600, and an accumulated deficit of $30,268,700. In the
future, we could realize cash from liquidation of certain non-core assets, from
Suncor's exercise of its option (see "Selected Information About U.S. Energy
Corp. - Rocky Mountain Gas, Inc."), and /or from the outcome of our litigation
with Nukem/CRIC (see our Annual Report on Form 10-K), although a favorable
recovery from this litigation is uncertain as to time or amount. Our current
level of operations, including general and administrative overhead, mineral
operations (primarily care and custody costs for the uranium and gold
properties), and costs to comply with other property lease and permitting
obligations for the coalbed properties, are estimated to cost $1,875,000 for the
six months ending July 31, 2002. However, if we can't realize cash from
liquidating assets, from Suncor's option exercise, or other sources, or if RMG
spends more money on exploration than will be covered by current arrangements,
then under these circumstances additional equity financing may be necessary to
sustain operations starting in early to mid-calendar 2002. There are no current
commitments for such future financing as may be necessary.
Our strategy for RMG contemplates a total capital budget of up to
$50,000,000 through calendar 2003 to develop our coalbed methane properties and
put them into production, and to acquire more properties. Management believes
the necessary equity and/or debt capital can be raised as needed,
9
however, there are no commitments presently in place. The cash requirements for
our coalbed methane business are in addition to working capital requirements.
WE ARE SUBJECT TO CERTAIN KINDS OF RISK WHICH ARE UNIQUE TO THE MINERALS
BUSINESS. The exploration for and production of minerals is highly speculative
and involves risks different from and in some instances greater than risks
encountered by companies in other industries. Many exploration programs do not
result in the discovery of mineralization and any mineralization discovered may
not be of sufficient quantity or quality. Also, the mere discovery of promising
mineralization may not warrant production, because the minerals (including
methane gas) may be difficult or impossible to extract (produce) on a profitable
basis.
Profitability of any mining and production we may conduct will involve a
number of factors, including, but not limited to: the ability to obtain all
required permits; costs of bringing the property into production, including the
construction of adequate production facilities; the availability and costs of
financing; keeping ongoing costs of production at economic levels; and market
prices for the metals or hydrocarbons to be produced staying above production
costs. We can't assure you that any of our properties, or properties we might
acquire in the future, contain (or will contain) deposits of minerals or coalbed
methane gas that will be profitable to produce.
In addition, all forms of mineral (and oil and gas and coalbed methane)
exploration and production require permits to have been issued by various
federal and state agencies. See below.
DELAYS IN OBTAINING PERMITS FOR METHANE WELLS COULD IMPAIR OUR BUSINESS.
Drilling and producing coalbed methane wells requires obtaining permits from
various governmental agencies. The ease of obtaining the necessary permits
depends on the type of mineral ownership and the state in which the property is
located. Intermittent delays in the permitting process can reasonably be
expected throughout the development of any play. For example, there is currently
a temporary moratorium for drilling coalbed methane wells on fee and state lands
in Montana. We may shift our exploration and development strategy as needed to
accommodate the permitting process. As with all governmental permit processes,
there is no assurance that permits will be issued in a timely fashion or in a
form consistent with our plan of operations.
On March 16, 2000, the Northern Plains Resource Council, Inc. ("NPRC")
filed suit against the Montana Board of Oil and Gas Conservation (Board)
requesting an order of the court compelling the defendant to prepare a
Supplemental Environmental Impact Statement ("SEIS") for coalbed methane
development, which could further delay development. RMG and others have filed a
motion to intervene to participate in this litigation and to ensure that some
drilling can be performed during any environmental analysis. The Board has
agreed to limit issuance of CBM well permits to 200 pending completion of the
SEIS, currently scheduled to be completed in the spring of 2002.
The Wyodak Environmental Impact Statement (EIS) for the Powder River Basin
in Wyoming issued in the fall of 1999, allowed the permitting of 5,000 CBM wells
to be drilled on Federal lands in Wyoming. More CBM well applications have been
submitted causing the BLM to begin a second EIS for the Powder River Basin Area
in Wyoming. The new EIS was to commence in early summer 2000. Development on
Federal lands in Wyoming has been stopped with the balance of the Wyodak EIS
permitted wells (4,000) occurring on fee and state lands. The BLM has started an
environmental assessment ("EA") reviewing drainage issues which could allow an
additional 1,500 new CBM well permits in the same region. This was scheduled to
begin in April 2000 with completion expected October
10
2000. Completion has been delayed and is not expected until early to mid-2002.
Again, there is no assurance that the EA and EIS will not negatively impact RMG.
In addition, the Wyoming and Montana Departments of Environmental Quality
have regulations applying to the surface disposal of water produced from coalbed
methane ("CBM") drilling operations. CBM operators are currently seeking changes
in permit requirements and department policy that would allow operators more
flexibility to discharge water on the surface. If these changes are not made, it
may be necessary to install and operate treatment facilities or drill disposal
wells to reinject the produced water back into the underground rock formations
adjacent to the coal seams or lower sandstone horizons. If we cannot obtain the
appropriate permits or if applicable laws or regulations require water to be
disposed of in an alternative manner, the costs to dispose produced water will
likely increase. These costs could have a material effect on operations in this
area, including potentially rendering future production and development in the
affected areas uneconomic.
In Montana, we have pending applications to the BLM for approximately 60
permits to drill into shallow gas sand formations on Federal land held with
Quaneco and would be converted to production status upon receiving approval from
the Montana Board of Oil and Gas. These wells would evaluate potential CBM
production as well as conventional gas. Regarding other acreage held with
Quaneco in Montana, the State of Montana may lift its moratorium for CBM wells
on private and state ground in Montana, and start issuing new permits on these
lands in Spring 2002 (a voluntary moratorium is currently in place for wells on
private and state ground in Montana). We have not determined to what extent we
will participate in this procedure, and are evaluating how best to protect our
position to have reasonable exploration for CBM wells proceed on state and fee
ground. We have permits in place until Spring 2002 in order to conduct
exploration in expectation that commercial production will be approved on
completion of the EIS and EA.
In August 2001, Montana and Wyoming announced an agreement for water
quality officials in both states to coordinate monitoring of water flows in the
Powder River and Little Powder River drainages, to determine the impact of
coalbed methane well water production on river water. Although usually well
water is potable, it may contain high sodium absorption ratios which can impair
use of the water for irrigation purposes in clay-based soils. The respective
agencies will propose regulations to establish thresholds for potential
pollutants and require strict monitoring by local water quality officials. If
test results indicate well water flows adversely impact river water quality,
operators could be required to put the water flow into holding ponds or take
other steps to eliminate or reduce water flows or pollutants in the water.
Implementation of the agreement is expected to benefit continued coalbed methane
development in these areas by opening up the water discharge permitting process
in the affected areas, which had been slowed because of these concerns.
Currently, we don't have acreage which would be impacted by these regulations
but future acreage could be acquired in the affected areas. It is possible that
water from some of our future wells could be regulated as to discharge, which
could negatively impact development of that acreage.
TERMS OF SUBSEQUENT FINANCINGS MAY ADVERSELY IMPACT YOUR INVESTMENT. We may
have to raise equity, debt or preferred stock financing in the future. Your
rights and the value of your investment in the common stock could be reduced.
For example, if we have to issue secured debt securities, the holders of the
debt would have a claim to our assets that would be prior to the rights of
stockholders until the debt is paid. Interest on these debt securities would
increase costs and negatively impact operating results. Preferred stock could be
issued in series from time to time with such designations, rights, preferences,
and limitations as needed to raise capital. The terms of preferred stock could
be more
11
advantageous to those investors than to the holders of common stock. In
addition, if we need to raise more equity capital from sale of common stock,
institutional or other investors may negotiate terms at least and possibly more
favorable than the terms of this offering. Shares of common stock which we sell
could be sold into the market, which could adversely affect market price. See
below.
RISK FACTORS INVOLVING THIS OFFERING
ADDITIONAL SHARES TO MARKET BY REGISTRATION OR EXCHANGE. From time to time
we have funded operations by selling restricted securities of subsidiary
companies for their operations, then later reacquired those securities by
exchange for shares and warrants of USE. For example, in January 2002, we issued
1,423,460 restricted shares of common stock in exchange for restricted shares of
Rocky Mountain Gas, Inc. and in conversion of preferred stock of USE, for which
the exchanging shareholders, and the holder of the USE preferred stock ,
originally had invested $5,309,000. The shares of common stock of USE were
issued based on the market price of $3.92 on December 5, 2001, and the original
investment amount for RMG and preferred stock, plus $270,959 of interest owed
three of the investors. It is anticipated that resale of these 1,423,460 shares
of USE common stock into the public market will be registered with the
Securities and Exchange Commission in February 2002. Such resales could
adversely affect market prices for investors who buy shares in this offering.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling shareholder pursuant to this prospectus, but we may receive proceeds
from the exercise of the warrants or options (pursuant to which the shares
underlying such warrants or options will be sold pursuant to this prospectus),
which will be used by the company for working capital.
SELLING SHAREHOLDER
This prospectus covers the offer and sale by the selling shareholder of up
to 20,000 shares of common stock ($0.01 par value) owned or to be owned on
exercise of options by the selling shareholder. The footnotes to the table below
give information about shares issuable on exercise of the options by the selling
shareholder. All shares issued (and all shares issuable on exercise of options)
are (and will be) restricted securities as that term is defined in rule 144 of
the Securities and Exchange Commission under the Securities Act of 1933, and
will remain restricted unless and until such shares are sold pursuant to this
prospectus, or otherwise are sold in compliance with rule 144 or the restriction
removed in accordance with rule 144(k).
The selling shareholder is not an affiliate of the company or any
subsidiary of the company.
The shares covered by this prospectus consist of 20,000 shares underlying
options, exercisable at $2.62 per share, held by consultant R. J. Falkner and
Company ("RJF"). The company had a consulting agreement with RJF for 12 months
ending February 1, 2000 and then continuing on a month-to-month basis, for
public relations and investor relations services. RJF was paid $2,000 cash per
month and granted an option to purchase 20,000 shares of common stock expiring
on January 31, 2002. The option exercise period has been extended to February
28, 2002.
The company entered into a new contract with RJF on April 11, 2001 for a
period of not less than 24 months. RJF is paid $2,000 cash per month and was
issued options on 20,000 shares at an exercise
12
price of $3.98 per share, expiring on April 10, 2006. These shares have been
registered for resale, upon exercise of the option, under Form S-3 registration
statement (SEC File No. 333-75864)
The selling shareholder may offer his shares for sale on a continuous basis
pursuant to rule 415 under the 1933 Act.
The following information has been provided to us by the selling
shareholder. All numbers of shares, and percentage ownership, are stated on a
pro forma basis as of prospectus date assuming issuance of 20,000 shares upon
exercise of all options listed above. There are 11,598,947 shares issued and
outstanding on the initial date of this prospectus; on a pro forma basis,
11,618,947 shares are outstanding. Additional shares issuable on possible
exercise of additional options and warrants presently outstanding, but not held
by the selling shareholder, are not included in the pro forma calculation.
Number of Number of Shares
Shares of of Common Stock Percent Owned
Name and Address Common Stock Registered Prior to After
of Beneficial Owner Owned For Sale Offering Offering(1)
- ---------------------------------------------------------------------------------------------
R. J. Falkner 40,000(2) 20,000(2) * *
P. O. Box 1230
Crested Butte, CO 81224
<FN>
* Less than 1%.
(1) Assumes all shares are sold by the selling shareholder.
(2) Includes shares issuable on exercise of options, at $2.62 per share, and
assumes exercise of such options by the selling shareholder. Also includes
for number of shares owned, an additional 20,000 shares issuable on options
held by the selling shareholder, at a price of $3.98 per share, expiring
April 10, 2006. Resale of this additional amount of 20,000 shares is
covered by separate prospectus.
</FN>
The shares owned or to be owned by the selling shareholder are registered
under rule 415 of the general rules and regulations of the Securities and
Exchange Commission, concerning delayed and continuous offers and sales of
securities. In regard to the offer and sale of such shares, we have made certain
undertakings in Part II of the registration statement of which this prospectus
is part, by which, in general, we have committed to keep this prospectus current
during any period in which the selling shareholder makes offers to sell the
covered securities pursuant to rule 415.
PLAN OF DISTRIBUTION
The selling shareholder and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholder may use any one or more of the following methods when selling
shares:
O ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
O block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
13
O purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
O an exchange distribution in accordance with the rules of the
applicable exchange;
O privately negotiated transactions;
O short sales;
O broker-dealers may agree with the selling shareholder to sell a
specified number of such shares at a stipulated price per share;
O a combination of any such methods of sale; and
O any other method permitted pursuant to applicable law.
The selling shareholder also may resell all or a portion of the shares in
open market transactions in reliance upon rule 144 under the 1933 Act, provided
they meet the criteria and conform to the requirements of the rule.
The selling shareholder may also engage in short sales against the box,
puts and calls and other transactions in securities of the company or
derivatives of company securities and may sell or deliver shares in connection
with these trades. The selling shareholder may pledge his shares to his brokers
under the margin provisions of customer agreements. If a selling shareholder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged shares. The selling shareholder has advised the company that he has not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of his shares other than
ordinary course brokerage arrangements, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling shareholder.
Broker-dealers engaged by the selling shareholder may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
We are required to pay all fees and expenses incident to the registration
of resale of the shares covered by this prospectus. However, all discounts,
commissions or fees incurred in connection with the sale of the shares offered
hereby will be paid by the selling shareholder. The company has agreed to
indemnify the selling shareholder against certain losses, claims, damages and
liabilities, including liabilities under the 1933 Act. We have been advised that
in the opinion of the Securities and Exchange Commission, indemnification for
liabilities under the 1933 Act is against public policy, and therefore is
unenforceable. See below.
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless the shares have been registered or
qualified for sale in such state or an exemption from registration or
qualification is available.
14
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
company pursuant to the foregoing provisions, or otherwise (for example, in
connection with the sale of securities), we have been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the 1933 Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the company of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Securities Act, and will be
governed by the final adjudication of such issue.
WHERE TO FIND MORE INFORMATION ABOUT US
We have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 under the 1933 Act with
respect to the shares offered by this prospectus. This prospectus, filed as a
part of the registration statement, does not contain certain information
contained in part II of the registration statement or filed as exhibits to the
registration statement. We refer you to the registration statement and exhibits
which may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. The
registration statement and exhibits also are available for viewing at and
downloading from the EDGAR location within the Commission's internet website
(http://www.sec.gov).
15
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Our common stock is registered with the Commission under section 12(g) of
the Securities Exchange Act of 1934 (the "1934 Act"). Under the 1934 Act, we
file with the Commission periodic reports on Forms 10-K, 10-Q and 8-K, and proxy
statements, and our officers and directors file reports of stock ownership on
Forms 3, 4 and 5. These filings may be viewed and downloaded from the
Commission's internet website (http://www.sec.gov) at the EDGAR location, and
also may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. Information
on the operation of the Public Reference Room can be obtained by calling the
Commission at 1.800.SEC.0330.
All of the information contained in the following documents filed with the
Commission is incorporated by reference into this prospectus: Annual Report on
Form 10-K for fiscal year ended May 31, 2001; Quarterly Report on Form 10-Q for
the Six Months ended November 30, 2001; Proxy Statement for Annual Meeting of
Shareholders in December 2001; Report on Form 8-K in fiscal 2002 (reporting
adoption in calendar 2001 of a "shareholder rights plan" also commonly known as
a "poison pill"); and Report on Form 8-K in December 2001 regarding status of
coalbed methane operations.
All of the information which will be contained in our future Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statements, and Reports on
Form 8-K, and any other filings we make pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act, all after the date of this prospectus, also are
incorporated by reference into this prospectus as of the dates when such
documents are filed with the Commission.
We will provide to you copies of any or all of the information in these
documents, and any exhibits to them, without charge, upon request addressed to
U.S. Energy Corp., 877 North 8th West, Riverton, Wyoming 82501, attention Daniel
P. Svilar, Assistant Secretary. You also may request these documents by
telephone: 1.307.856.9271. Our internet address is www.useg.com. Our 1934 Act
filings are not directly available through our internet address (website), but
you can access those filings through the link to Nasdaq at our internet address
(website).
16
20,000 SHARES COMMON STOCK
U.S. ENERGY CORP.
-------------------
PROSPECTUS
--------------------
February _____, 2002
No dealer, salesman or other person is authorized to give any information
or make any information or make any representations not contained in the
prospectus with respect to the offering made hereby. This prospectus does not
constitute an offer to sell any of the securities offered hereby in any
jurisdiction where, or to any person to whom it is unlawful to make such an
offer. Neither the delivery of this prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that there has been no
change in the information set forth herein or in the business of our company
since the date hereof.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of
the securities being registered:
Securities and Exchange Commission registration fee..................$ 13
National Association of Securities Dealers, Inc. examination fee..... n/a
Accounting .......................................................... 2,000
Legal fees and expenses.............................................. 2,000
Printing ............................................................ n/a
Blue Sky fees and expenses (excluding legal fees).................... 250
Transfer agent ...................................................... n/a
Escrow agent......................................................... n/a
Miscellaneous........................................................ n/a
Total................................................................$ 4,263
The Registrant will pay all of these expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the
liability of a director for breach of the director's duty or loyalty to the
corporation or its stockholders, or for acts of omission not in good faith or
which involve intentional misconduct or a knowing violation of law.
Wyoming law permits a corporation, under specified circumstances, to
indemnify its directors, officers, employees or agents against expenses
(including attorney's fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or
proceeding brought by third parties by reason of the fact that they were or are
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reason to believe their conduct was unlawful. In a derivative action, i.e., one
by or in the right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors, officers, employees or
agent in connection with the defense or settlement of an action or suit, and
only with respect to a matter as to which they shall have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors, officers, employees or
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.
18
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
SEQUENTIAL
EXHIBIT NO. TITLE OF EXHIBIT PAGE NO.
Exhibit 4.1 - 4.11 Intentionally left blank
Exhibit 4.17 Stock Option held by R. Jerry Falkner
and Amendment thereto............................*
Exhibit 5.1 Opinion re legality and consent of counsel..........*
Exhibit 10-1 - 10.2 Intentionally left blank
Exhibit 10.6 Contract - R. J. Falkner & Company..................*
Exhibit 23.1 Included in Exhibit 5.1
Exhibit 23.2 Consent of Independent Auditors
(Grant Thornton LLP)................................*
Exhibit 23.3 Consent of [former] audit firm
Arthur Andersen LLP.................................*
* Filed herewith.
19
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information 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 twenty percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement; and
(iii)To include any additional or changed material information on the
plan of distribution.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply to this
registration statement if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act , each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
20
(h) RELATIVE TO REQUEST FOR ACCELERATION OF EFFECTIVE DATE.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Riverton, state of Wyoming on February 18, 2002.
U.S. ENERGY CORP. (Registrant)
Date: February 18, 2002 By: /s/ John L. Larsen
-----------------------------------
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this registration statement on Form S-3 has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Date: February 18, 2002 By: /s/ John L. Larsen
-----------------------------------
Director
Date: February 18, 2002 By: /s/ Keith G. Larsen
-----------------------------------
Director
Date: February 18, 2002 By: /s/ Harold F. Herron
-----------------------------------
Director
Date: February 18, 2002 By: /s/ Don C. Anderson
-----------------------------------
Director
Date: February 18, 2002 By: /s/ Nick Bebout
-----------------------------------
Director
Date: February 18, 2002 By: /s/ H. Russell Fraser
-----------------------------------
Director
Date: February 18, 2002 By: /s/ Robert Scott Lorimer
-----------------------------------
Principal Financial Officer/
Chief Accounting Officer
22