Form S-3/A Bourne Tsunami
As
filed
with the Securities and Exchange Commission on January ___,
2007
Registration
No. 333-137139
Securities
and Exchange Commission
Washington,
D.C. 20549 - 2001
_______________
FORM
S-3/A
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)
Steven
R.
Youngbauer, 877 North 8th West
Riverton,
WY 82501; Tel. 307.856.9271
(Name,
address, including zip code, and telephone number of agent for
service)
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Copies
to:
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Stephen
E. Rounds, Esq.
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The
Law Office of Stephen E. Rounds
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1544
York Street, Suite 110, Denver, CO 80206
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Tel:
303.377.6997; Fax: 303.377.0231
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_______________
Approximate
date of commencement and end of proposed sale to the public: From time to time
after the registration statement becomes effective.
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. [
]
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering:[ ] ________
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ] ________
If
this
Form is a registration statement pursuant to General Instruction 1.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 1.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. [ ]
CALCULATION
OF REGISTRATION FEE
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Proposed
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Proposed
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Maximum
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Amount
of
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Maximum
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Aggregate
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Title
of Each Class
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Securities
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Offering
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Dollar
Price
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Amount
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of
Securities
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to
be Registered
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Price
Per
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of
Securities to
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of
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to
be Registered
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In
the Offering
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Security
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be
Registered
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Fee
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Common
Stock
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619,166(1)
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$
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4.69
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$
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2,903,888
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$
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310.71
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Common
Stock
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677,353(2)
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$
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4.69
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$
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3,176,786
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$
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339.92
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1,296,519
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$
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6,080,674
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$
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650.63
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* |
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(1)
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These
shares (registered for resale) are held by four entities: Bourne
Capital,
LLC (42,907 shares); Rocky Mountain Gas, Inc. (506,329 shares); Cornell
Capital Partners, LP (68,531 shares and Newbridge Securities Corporation
(1,399 shares).
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(2)
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These
shares (registered for resale) are issuable on exercise of warrants
held
by 4 entities (1,921 shares at $3.20 per share held by two entities;
100,000 shares issuable on exercise of a warrant at $7.15 per share
held
by Cornell Capital Partners L.P. and 575,432 shares issuable on exercise
of warrants held by two entities (Bourne, LLC for 412,714 shares,
and
Tsunami Partners, L.P. for 162,718 shares) at prices from 2.87 to
$4.23
per share).
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Pursuant
to rule 457(c), registration fee calculations are estimated based on the $4.69
Nasdaq Official Closing Price on November 16, 2006 which is within 5 business
days prior to the filing of this pre-effective registration statement, using
the
fee rate of $107.00 per million dollars of the aggregate offering market price
at that date.
* $93.66
of
this amount was previously paid.
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.
U.S.
Energy Corp.
1,296,519
Shares of Common Stock
This
prospectus covers the offer and sale of up to 1,296,519 shares of common stock
($0.01 par value): 619,166 outstanding shares; and 677,353 shares issuable
on
exercise of warrants (at prices from $2.87 to $7.15 per share).
In
this
prospectus, "selling shareholder" or "selling shareholders" refer to the
entities that hold the outstanding shares; and the entities which hold the
warrants. For information about the selling shareholders and the transactions
in
which they acquired the shares and warrants, see "Selling Shareholders."
In
this
prospectus, and the information incorporated by reference, "we," "Company,"
and
"USE" refer to U.S. Energy Corp. (and its subsidiaries unless otherwise
specifically stated).
The
selling shareholders may sell the shares from time to time in negotiated
transactions, brokers' transactions or a combination of such methods of sale
at
market prices prevailing at the time of sale or at negotiated prices. See “Plan
of Distribution.” Although we will receive proceeds to the extent the warrants
are exercised, we will not receive any proceeds from sale of the shares offered
by the selling shareholders. None of the warrants have been exercised at
prospectus date.
USE
is
traded ("USEG") on the Nasdaq Capital Market ($4.71 Nasdaq Official Closing
Price on January 17, 2007).
An
investment in the shares offered by this prospectus is speculative and subject
to risk of loss. See "Risk Factors" beginning on page 9 and the table of
contents on page 4.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of the securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is January ___, 2007
TABLE
OF CONTENTS
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Page
No.
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Summary
Information
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6
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The
Company
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6
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The
Offering
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8
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Risk
Factors
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8
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Risk
Factors Involving the Company
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8
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We have a history of operating losses.
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8
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No recurring business revenues and uncertainties associated with
transaction-based revenues.
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8
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Uncertainties in the value of the mineral properties.
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9
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Compliance with environmental regulations may be costly.
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10
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Possible Dilution to Shareholders.
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11
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The Company’s poison pill could discourage some advantageous
transactions.
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11
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Risks
Related to Owning Our Common Stock
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11
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The price of U.S. Energy’s stock will continue to be volatile due to
several factors.
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11
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The price of U.S. Energy’s shares may be adversely affected by the public
sale of a significant
number of the shares eligible for future sale.
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11
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Future equity transactions, including exercise of options or warrants,
could result in dilution;
and registration for public resale of the common stock in these
transactions may depress stock
Prices.
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11
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Possible issuance of shares to acquire minority shares of Crested
Corp.
may dilute your
ownership.
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12
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Terms of subsequent financings may adversely impact your
investment.
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12
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Representations
About This Offering
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12
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Forward
Looking Statements
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12
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Description
of Securities
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13
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Common
Stock.
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13
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Preferred
Stock.
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14
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Page
No.
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Warrants
Held by Selling Shareholders and Others; and Options Held by Employees
and
Directors.
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14
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Warrants Held by Selling Shareholders and Others.
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14
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Options held by Employees and Officers.
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14
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Use
of Proceeds
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14
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Selling
Shareholders
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14
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Plan
of Distribution
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17
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Disclosure
of Commission Position on Indemnification
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18
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Where
to Find More Information About Us
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19
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Incorporation
of Certain Information by Reference
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19
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Legal
Matters
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21
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Experts
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21
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Summary
Information
The
following summarizes all material information found elsewhere in this prospectus
and in the information incorporated into this prospectus. This summary is
qualified by the more detailed information in this prospectus and the
incorporated information.
The
Company
U.S.
Energy Corp. (“USE”) is a Wyoming corporation (formed in 1966) in the business
of acquiring, exploring, developing and/or selling or leasing mineral and
other
properties. USE and Crested Corp. ("Crested") originally were independent
companies, with two common affiliates (John L. Larsen and Max T. Evans; Mr.
Evans died in February 2002 and Mr. Larsen died in September 2006). In 1980,
USE
and its majority owned subsidiary Crested Corp. (“Crested”) formed a joint
venture ("USECC") to do business together (unless one or the other elected
not
to pursue an individual project). From time to time, USE has funded many
of
Crested's obligations because Crested did not have the funds to pay its share
of
the obligations. Crested has paid a portion of this debt by issuing common
stock
to USE. At September 30, 2006, Crested owed $14,335,400 to USE.
Historically,
our business strategy has been, and will continue to be, acquiring undeveloped
and/or developed mineral properties at low acquisition costs and then operating,
selling, leasing or joint venturing the properties, or selling the companies
we
set up to other companies in the mineral sector at a profit.
Typically,
projects initially are acquired, financed and operated by USE and Crested in
their joint venture (see below). From time to time, some of the projects are
then transferred to separate companies organized for that purpose, with the
objective of raising capital from an outside source for further development
and/or joint venturing with other companies. Examples include: Sutter Gold
Mining, Inc, (“SGMI”) for gold and Rocky Mountain Gas, Inc. (“RMG”) for coalbed
methane gas, referred to as “CBM”. Additional subsidiaries have been organized:
U.S. Uranium Ltd. for uranium and U.S. Moly Corp. for molybdenum. Initial
ownership of these subsidiaries typically is by USE and Crested, with additional
stock (plus options) held by their officers, directors and
employees.
From
2002
through mid-2005, USE's primary business focus was in the CBM business conducted
through RMG. RMG was sold to Enterra Energy Trust (TSX: ENT.UN and NYSE: ENT)
on
June 1, 2005. Beginning in 2004 and continuing into 2006, commodity prices
for
the gold, molybdenum and uranium increased significantly. Management believes
that the rebound in these commodity prices presents valuable
opportunities.
Management’s
strategy to generate a return on shareholder capital is to demonstrate
prospective value in the mineral properties sufficient to support substantial
investments by investment groups, financial institutions and/or large industry
partners, and then bring long term development expertise to move the properties
into production. In the alternative, we might sell one or more of the properties
(or our subsidiaries which hold the properties) outright, as we did RMG in
2005.
In
July
2006, we signed an exclusivity agreement with sxr Uranium One Inc. (“Uranium
One”) giving Uranium One the right to purchase most of our uranium assets. In
October 2006, we signed a letter agreement with Kobex Resources Ltd., related
to
the ”Lucky Jack” molybdenum property (formerly know as the Mt. Emmons molybdenum
property). For details on these agreements, please see “Incorporation of Certain
Information by Reference,” below.
To
demonstrate prospective value in the mineral properties and raise the necessary
capital for development of the mineral projects in 2006 to 2007, management
is
considering having feasibility studies conducted on each of the properties.
These studies, to be performed by independent engineering firms, will in general
determine the economic feasibility, at commodity prices existing at the time
of
the studies, of various mine plans for the properties, and various processing
(milling) facilities to refine the minerals to saleable commodities, given
the
known mineral grades in the properties. In some instances, significant
additional exploratory drilling may have to be done to further delineate grades
as well as the extent of the minerals in the ground, if any.
The
principal uncertainties in the successful implementation of our strategy
are:
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Whether
feasibility studies will show, for any of the properties, that the
minerals can be mined and processed
profitably;
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Commodity
prices for gold, uranium and molybdic oxide must be at levels so
the
properties can be mined at a
profit;
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Whether
the feasibility studies will show volume and grades of mineralization,
and
manageable costs of mining and processing, which are sufficient to
bring
industry partners to the point of investment,
and
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Whether
we can negotiate terms with industry partners, which will return
a
substantial profit to USE for its retained interest and the project’s
development costs to that point in time, or, the property (or the
applicable subsidiary) can be sold outright. Although we have agreements
in place for the molybdenum property and for most of the uranium
properties, substantial funding of these projects by the other parties
will be subject to completion of due diligence and other matters.
See
“Incorporation of Certain Information by Reference.”
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However,
it is possible that we may be able to raise capital for (or bring an industry
partner into) a property without having a feasibility study
prepared.
To
some
extent, the economic feasibility of a particular property can be changed with
modifications to the mine/processing plans (add or not add a circuit to process
a particular mineral, enlarge or reduce the production and mine plan, etc.).
However, overall, the principal drivers to attainment of the business strategy
are the quality of the minerals in the ground, the cost to extract those
minerals and international commodity prices.
Principal
executive offices of USE and Crested are located in the Glen L. Larsen building
at 877 North 8th West, Riverton, Wyoming 82501, telephone 307-856-9271. SGMI
has
an office in Sutter Creek, California. USE’s web site is www.usnrg.com. The
information in the web site, or on other web sites linked to it, is not part
of
this prospectus.
In
this prospectus, "we," "Company" or "USE" refer to U.S. Energy Corp. including
Crested Corp. ("Crested") and other subsidiaries unless otherwise specifically
noted. The Company's fiscal year ends December 31.
The
Offering
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Securities
Outstanding
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19,747,912shares
of common stock at January 16, 2007.
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Securities
To Be
Outstanding
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20,425,265
shares of common stock, assuming all warrants held by the selling
shareholders are exercised for the purchase of 677,353 shares.
See
“Description of Securities” and “Selling Shareholders.”
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Securities
Offered
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1,296,519
shares of common stock owned or to be owned by the selling shareholders.
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Use
of Proceeds
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We
will not receive any proceeds from sale of shares by the selling
shareholders, but we will receive up to $2,584,300 (net of estimated
registration costs) from exercise of all the selling shareholders’
warrants. Net proceeds will be used for working capital.
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Plan
of Distribution
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The
offering is made by the selling shareholders named in this prospectus;
to
the extent they sell shares. Sales may be made in the open market
or in
private negotiated transactions, at fixed or negotiated prices.
See "Plan
of Distribution."
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Risk
Factors
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An
investment is subject to risk. See "Risk
Factors."
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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 a history of operating losses.
At
September 30, 2006, the Company had $50,433,800 of accumulated deficit
($40,154,100 at December 31, 2005). For the nine months ended September 30,
2006, we recorded a loss of $12,386,800 from continuing operations and a net
loss of $10,279,700. For the year ended December 31, 2005, we recorded a loss
from continuing operations of $6,066,900, but (due primarily to the sale of
RMG
in June 2005) recorded net income for the year of $8,841,500.
Working
capital at September 30, 2006 was $16,620,100. Historically, working capital
needs primarily have been met from receipt of funds from liquidating
investments, selling partial interests in mineral properties and selling
equity.
These sources of capital may not be sufficient to develop our mineral
properties, none of which have proved reserves.
In
late
July, 2006, the U.S. District Court in Denver, Colorado awarded a judgment
in
favor of Phelps-Dodge Corporation, and against USE, in the amount of $7,538,300
for fees and costs associated with litigation and the prior operation of
a water
treatment plant at the Mt. Emmons mining property in Colorado. This litigation
has been settled (see “Incorporation of Certain Information by
Reference”).
No
recurring business revenues and uncertainties associated with transaction-based
revenues. Presently
we do not have an operating business with recurring revenues. Receipt of funds
from selling interests in mineral properties, or liquidating investments in
mineral properties (or the subsidiaries which hold properties) is unpredictable
as to timing, structure, and profitability.
For
example, we began activities in the coalbed methane sector in 2000 by starting
up Rocky Mountain Gas, Inc. which used, rather than provided, capital until
it
was sold to Enterra Energy Trust in June 2005.
Working
capital on hand at prospectus date is expected to be sufficient to fund general
and administrative expenses, and conduct exploration and a limited amount
of
development work on the mineral properties, through 2007. Additional working
capital, as well as development capital for the Luck Jack molybdenum property,
could be available through Kobex Resources Ltd. (“Kobex”). Proceeds also could
be available if we sell uranium assets to Uranium One. However, funding from
these parties is not assured. See “Incorporation of Certain Information by
Reference.”
Putting
mineral properties into production (constructing and operating mines and
processing facilities) requires substantial amounts of capital. The development
of the properties will depend on receipt of the fundings contemplated by the
arrangements with Kobex and Uranium One, and further on Sutter Gold’s ability to
raise other capital.
With
particular reference to our Luck Jack molybdenum property, a retained interest
under the arrangement with Kobex still will not generate recurring revenues
for
several years, if at all.
Uncertainties
in the value of the mineral properties.
While
we believe that our mineral properties are valuable, substantial work and
capital will be needed to establish whether they are valuable in
fact.
| · |
The
profitable mining and processing of uranium and possibly vanadium
at and
in the vicinity of Plateau Resource Limited’s (“Plateau”) properties in
Utah, will depend on many factors: Obtaining properties in close
proximity
of the Shootaring Canyon uranium mill to keep transportation costs
economic; delineation through extensive drilling and sampling of
sufficient volumes of mineralized material with sufficient grades
to make
mining and processing economic over time; continued sustained high
prices
for uranium oxide and vanadium; obtaining the capital required
to upgrade
the Shootaring Canyon uranium mill, and/or possibly add a vanadium
circuit, and obtaining and continued compliance with operating
permits.
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| · |
The
profitable mining at the Sheep Mountain uranium properties in Wyoming
will
depend on: Evaluations of existing and future drilling data to
delineate
sufficient volumes and grades of mineralized material to make mining
and
processing economic over time; continued sustained high prices
for uranium
oxide and Uranium Power Corp. (“UPC”) and USE having sufficient capital.
In addition, there is no operating mill near the Sheep Mountain
properties, although the Sweetwater Mill (which is on standby)
is located
30 miles south of Sheep Mountain. The ultimate economics of mining
the
Sheep Mountain properties will depend on sufficient volumes and
grades of
mineralized materials, sustained high uranium oxide prices, access
to an
operating mill and obtaining and continued compliance with operating
permits. If we sell these and other uranium properties to Uranium
One, we
would not be funding exploration and mining of the properties but
the
ultimate proceeds from our equity stake in Uranium One could still
be
somewhat dependent on the viability of the properties as part of
Uranium
One’s minerals portfolio.
|
| · |
The
profitable mining and processing of gold by SGMI will depend on
many
factors, including: Receipt of permits and keeping in compliance
with
permit conditions; delineation through extensive drilling and sampling
of
sufficient volumes of mineralized material with sufficient grades
to make
mining and processing economic over time; continued sustained high
prices
for gold, and obtaining the capital required to initiate and sustain
mining operations and build and operate a gold processing
mill.
|
| · |
The
Lucky Jack molybdenum property has had extensive work conducted
by prior
owners. This data will have to be updated to the level of a current
feasibility study to determine the viability of starting mining
operations. Obtaining mining and other permits to begin mining
the
molybdenum property may be difficult, even with the assistance
of Kobex,
and like any mining operation, capital requirements for a molybdenum
mining operation will be substantial. There is a history of opposition
by
local government entities and environmental organizations to the
prior
owners seeking permits to mine this property. This opposition has
been
expressed in litigation from time to time. Continued legal challenges
may
delay putting the Lucky Jack molybdenum property into
production.
|
| · |
We
have not yet obtained final (“bankable”) feasibility studies on any of our
mineral properties. These studies would establish the economic
viability,
or not, of the different properties based on extensive drilling
and
sampling; the design and costs to build and operate mills; the
cost of
capital, and other factors. Feasibility studies can take many months
to
complete. These studies are conducted by professional third party
consulting and engineering firms, and will have to be completed,
at
considerable cost, to determine if the deposits contain proved
reserves
(amounts of minerals in sufficient grades that can be extracted
profitably
under current pricing assumptions for development and operating
costs and
commodity prices). A feasibility study usually (but not always)
must be
completed in order to raise the substantial capital needed to put
a
mineral property into production. We have not established any reserves
(economic deposits of mineralized materials) on any of our properties,
and
future studies may indicate that some or all of the properties
will not be
economic to put into production.
|
Compliance
with environmental regulations may be costly.
Our
business is intensely regulated by government agencies. Permits are required
to
explore for minerals, operate mines, build and operate processing plants. The
regulations under which permits are issued change from time to time to reflect
changes in public policy or scientific understanding of issues. If the economics
of a project cannot withstand the cost of complying with changed regulations,
we
might decide not to move forward with the project.
USE
must
comply with numerous environmental regulations on a continuous basis, to
comply
with the United States: Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act ("RCRA"), and the Comprehensive Environmental
Response Compensation Liability Act ("CERCLA"). For example, water and dust
discharged from mines and tailings from prior mining or milling operations
must
be monitored and contained and reports filed with federal, state and county
regulatory authorities. Additional monitoring and reporting is required by
the
Utah Division of Radiation Control for uranium mills even if not currently
operating (like the Shootaring Canyon uranium mill at Ticaboo, Utah). The
Abandoned Mine Reclamation Act in Wyoming and similar laws in other states
where
we have properties impose reclamation obligations on abandoned mining
properties, in addition to or in conjunction with federal statutes.
Environmental regulatory programs create potential liability for our operations,
and may result in requirements to perform environmental investigations or
corrective actions under federal and state laws and federal and state Superfund
requirements.
Failure
to comply with these regulations could result in substantial fines,
environmental remediation orders and/or potential shut down of the project
until
compliance is achieved. Failure to timely obtain required permits to start
operations at a project could cause delay and/or the failure of the project
resulting in a potential write-off of the investments therein.
Possible
dilution to shareholders.
Because
we don’t have enough capital to put our properties into production, shareholders
may be diluted in their ownership if we raise capital. Direct dilution would
occur if we sell preferred stock, common stock, or debt convertible into common
stock, with conversion and other terms which large institutions can negotiate
for substantial capital financings which result in more favorable terms than
buying stock in the market. Indirect dilution would occur if institutional
financing is raised for a subsidiary company. In this scenario, the percentage
of the subsidiary held by us would be diluted.
The
Company's poison pill could discourage some advantageous
transactions.
We have
adopted a shareholder rights plan, also known as a poison pill (see "Description
of Securities"). The plan is designed to discourage a takeover of the Company
at
an unfair low price. However, it is possible that the board of directors
and the
takeover acquirer would not agree on a higher price, in which case the takeover
might be abandoned, even though the takeover price was at a significant premium
to market prices. Therefore, as a result of the mere existence of the plan,
shareholders would not receive the premium price.
Risks
Related to Owning Our Common Stock
The
price of U.S. Energy’s stock will continue to be volatile due to several
factors.
In the
12 months ended January 15, 2007, our stock has traded as low as $3.32 and
as
high as $7.20. Some of the factors leading to this volatility include:
• price
and
volume fluctuations in the stock market generally;
• relatively
small amounts of our stock trading on any given day;
• fluctuations
in our financial operating results; and
• price
swings in the minerals commodities markets.
The
price of U.S. Energy’s shares may be adversely affected by the public sale of a
significant number of the shares eligible for future sale.
At
January 15, 2007, 19,747,912 shares of common stock are issued and outstanding,
including 1,565,538 shares held by officers and directors and the Company’s
ESOP, most of which could be sold under the SEC’s rule 144. A substanital number
of additional shares are registered for sale under Form S-3 resale registration
statements, which have been filed for the benefit of prior investors and
financers; these shares include outstanding shares as well as shares issuable
on
exercise of options and warrants. Sales of large amounts of common stock
in the
market could materially adversely affect the market price, as well as our
ability to obtain future equity related financing on acceptable terms.
Future
equity transactions, including exercise of options or warrants, could result
in
dilution; and registration for public resale of the common stock in these
transactions may depress stock prices.
From
time to time, the Company sells restricted stock and warrants, and convertible
debt (or stock in subsidiary companies, convertible to stock in the Company),
to
investors in private placements conducted by broker-dealers, or in negotiated
transactions. Because the stock is restricted, the stock is often sold at a
discount to market prices compared to a public stock offering, and the exercise
price of the warrants sometimes (and/or the conversion price for stock in
subsidiaries) is at or may be lower than market prices. These transactions
cause
dilution to existing shareholders. Also, from time to time, options are issued
to employees, directors and third parties as incentives, with exercise prices
equal to market. Exercise of in-the-money options and warrants will result
in
dilution to existing shareholders; the amount of dilution will depend on the
spread between market and exercise price, and the number of shares involved.
The
Company will continue to grant options to employees and directors with exercise
prices equal to market price at the grant date, and in the future may sell
restricted stock and warrants (or stock in subsidiary companies convertible
to
stock in the Company), all of which may result in dilution to existing
shareholders.
Public
resale (pursuant to registration statements) of such restricted stock, and
of
stock issued in conversion of debt or stock of subsidiary companies, may depress
the market price of the stock.
Possible
issuance of shares to acquire minority shares of Crested Corp. may dilute
your
ownership. We
may
seek to merge Crested Corp. into U.S. Energy Corp., by the issuance of up
to an
additional (approximate) 2,800,000 shares of USE common stock to acquire
the
common stock of Crested Corp. (approximately 29%) not already owned by USE.
The
2,800,000 shares would include shares issued to acquire the Crested stock
presently underlying options to purchase Crested common stock (which options
are
held by officers, directors, and employees of USE). The USE stock would be
issued based upon an exchange ratio of one USE share for every two Crested
shares. Consummation of the proposed transaction is subject to execution
of a
plan and agreement of merger, and to satisfaction of certain conditions,
including but not limited to the SEC declaring effective a registration
statement on Form S-4 to be filed by USE for the transaction, and approval
of
the transaction by the holders of a majority of the minority shares of Crested
at a special meeting of the Crested shareholders to be convened pursuant
to the
prospectus/proxy statement that will be included in the Form S-4.
The
exchange ratio and principal terms of the proposed transaction have been
approved by the full boards of directors of both companies, upon the
recommendation of special committees of independent directors established
by
each company. Each company has been advised by their separate independent
financial advisory firms that the firms will issue opinions to the effect
that
the terms of the transaction are fair to the shareholders of USE, and to
the
minority shareholders of Crested, respectively. For further information,
see the
Form 8-K filed December 26, 2006.
If
the
proposed merger is consummated, the additional shares would dilute the
percentage ownership of the current shareholders of USE. Resale to the market
of
a substantial number of the newly issued shares could adversely impact USE’
market price.
Timing
of
consummation of the proposed merger is not predicted.
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 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.
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, using assumptions and available information. These
statements involve risks that are both known and unknown, including unexpected
economic and market factors, changes in operating and capital expenditures,
changes in timing or conditions for getting regulatory approvals to explore
mineral properties and put them into production, and other business factors.
The
use of the words "anticipate," "believe," "estimate," "expect," "may," "will,"
"should," "continue," "intend" and similar words or phrases, are intended by
us
to identify forward looking statements (also known as "cautionary statements"
because you should be cautious in evaluating such statements in the context
of
all the information in this prospectus and the information incorporated by
reference into this prospectus). These statements reflect our current views
with
respect to future events. They are subject to the realization in fact of
assumptions, but what we now think will happen, may turn out much different,
and
our assumptions may prove to have been inaccurate or incomplete.
The
investment risks discussed under "Risk Factors" specifically address all of
the
material risk factors that may influence future operating results and financial
performance. Those investment risks are not "boiler plate" but are intended
to
tell you about the uncertainties and risks inherent in our business at the
present time which you need to evaluate before making your investment
decision.
In
addition, you should note that this prospectus incorporates information about
the Company which has been, and in the future will be, contained in reports
filed with the SEC. See "Incorporation of Certain Information by Reference."
Those reports will identify forward looking statements and specify the risks
to
which those forward looking statements are subject. You should read the reports
carefully.
Description
of Securities
Common
Stock.
We are
authorized by our articles of incorporation to issue an unlimited number of
shares of common stock, $0.01 par value, and 100,000 shares of preferred stock,
$0.01 par value.
Shares
of
common stock may be issued for such consideration and on such terms as
determined by the board of directors, without shareholder approval. Holders
are
entitled to receive dividends when and as declared by the board of directors
out
of funds legally available therefore. There are no restrictions on payment
of
cash dividends. Cash dividends have not been declared on the common stock,
although a 1 for 10 stock dividend was declared in November 1990. It is
anticipated that future earnings would be reinvested into operations and not
declared as dividends on the common stock. All holders of shares of common
stock
have equal voting rights, and the shares of common stock sold in this offering
will have the same rights. Holders of shares of common stock are entitled to
one
vote per share on all matters upon which such holders are entitled to vote,
and
further have the right to cumulate their votes in elections of directors.
Cumulation means multiplying the number of shares held, by the number of
nominees to the board of directors, then voting the product among the nominees
as desired. Directors are elected by a plurality of the votes cast.
Shares
of
common stock sold in this offering are fully-paid and nonassessable shares
of
U.S. Energy Corp.
Pursuant
to our articles of incorporation and as permitted by Wyoming law, shares of
common stock held by our subsidiaries may be voted by such subsidiaries as
determined by the board of directors of each, in elections of directors and
other matters brought before shareholders.
In
September 2001, the Company adopted a shareholder rights plan ("poison pill")
and filed the plan with the Securities and Exchange Commission as an exhibit
to
Form 8-A. The following three paragraphs briefly state principal features of
the
plan, which are qualified by reference to the complete plan, which is
incorporated by reference into this prospectus.
Under
the
plan, the holder of each share of common stock has the right to purchase (when
the rights become exercisable) from the Company one-one thousandth (1/1,000th)
of one (1) share of Series P preferred stock at a price of $200.00 for each
one-one thousandth (1/1,000th) share of such preferred stock. The purpose of
the
plan is to deter an unfairly low priced hostile takeover of the Company, by
encouraging a hostile party to negotiate a fair offer with the board of
directors and thus eliminate the poison pill.
The
rights trade with the common stock and aren't separable therefrom; no separate
certificate for the rights is issued unless and until there is a hostile
takeover attempted, after which time separate and tradable rights certificates
would be issued.
The
rights are not exercisable and never can be unless and until a hostile (not
negotiated with the board) takeover of the Company is initiated with the
objective of acquiring 15% of the Company's voting stock. If before the takeover
is launched the hostile party comes to agreement with the board of directors
about price and terms and makes a "qualified offer" to buy the stock of the
Company, then the board of directors may redeem (buy back) the rights for $0.01
each. But, if such a "qualified offer" isn't agreed upon, then the rights are
exercisable for preferred stock, which in turn would enable the holder to
convert the preferred stock into voting common stock of the Company at a price
equal to one-half the market price.
Preferred
Stock.
Shares
of preferred stock may be issued by the board of directors with such dividend,
liquidation, voting and conversion features as may be determined by the board
of
directors without shareholder approval. In June 2000, we established a Series
A
Convertible Preferred Stock, for which 1,000 shares of preferred stock were
reserved for sale at $10,000 per share. In 2001, 200 shares were issued, and
converted to shares of common stock in 2002. No shares of preferred stock are
outstanding as of the date of this prospectus.
Warrants
Held by Selling Shareholders and Others; and Options Held by Employees and
Directors.
Warrants
Held by Selling Shareholders and Others.
As of
the date of this prospectus, warrants held by the selling shareholders ,
and by
other persons or entities (not including employees and officers) are issued
and
outstanding to purchase a total of 1,820,838 shares of common stock at exercise
prices from $2.00 to $7.15 per share.
Options
held by Employees and Officers.
The
Company has granted options to employees and officers to purchase a total
of3,927,880shares at exercise prices from $2.00 to $4.09 per
share.
Use
of Proceeds
We
will
not receive any of the proceeds from the sale of the shares by the selling
shareholders pursuant to this prospectus, but we will receive up to $2,584,300
(net of estimated registration costs) from exercise of all the selling
shareholders’ warrants. Proceeds will be used for working
capital.
Selling
Shareholders
This
prospectus covers the offer and sale by the selling shareholders of up to
1,296,519 shares of common stock: 619,166 outstanding shares; and 677,353 shares
issuable on exercise of warrants (at prices from $2.87 to $7.15 per share).
Of
the
outstanding shares, 1,013 were issued on exercise of a warrant held by Bourne
Capital, LLC, and 506,329 shares were transferred from Crested Corp. to Rocky
Mountain Gas, Inc. (“RMG”) to pay a $2 million obligation to Enterra Energy
Trust (RMG was sold to Enterra in June 2005, and now is a subsidiary of
Enterra). For information related to payment of the $2 million obligation,
see
the Form 8-K filed on October 19, 2006 under “Incorporation of Certain
Information by Reference.”
41,894
shares were issued to Bourne Capital under anti-dilution provisions of warrants
previously exercised, and a 2002 subscription agreement. All of these shares
were issued at the same time the warrant coverage and exercise prices on certain
of the warrants held by Bourne were adjusted (see below).
An
additional 68,531 shares were issued in April 2006 to Cornell Capital Partners,
LP and 1,399 shares were issued to Newbridge Securities Corporation, in
connection with a Standby Equity Distribution Agreement (the “SEDA”) between the
Company and Cornell. We also issued to Cornell a warrant (expiring June 5,
2009)
to purchase 100,000 shares of common stock at $7.15 per share. The SEDA and
related agreements were terminated as of October 31, 2006 (see “Incorporation of
certain Information by Reference”). Although the registration rights agreement
with Cornell and Newbridge was terminated along with the SEDA and other
agreements, we are registering resale of the shares and warrant shares for
the
convenience of these entities.
Of
the
remaining warrants,
| · |
1,921
are held by mezzanine lenders D.B Zwirn and Drawbridge, who provided
secured debt to a subsidiary of the Company to purchase coalbed methane
properties in 2005 (the subsidiary was sold in 2005); these warrants
(exercisable at $3.20 per share, expiring March 31, 2008) were issued
in
2006 as a result of the anti-dilution provisions in the original
warrants
issued to the lenders;
|
| · |
150,000
and 75,000 (exercisable at $3.25 per share, expiring August 25, 2009)
were
issued in August 2006 to Bourne Capital, LLC and Tsunami Partners,
L.P.,
respectively, in full settlement of certain disputes which arose
between
those prior investors and the Company; and
|
-
350,432
(exercisable at prices from $2.87 to $4.23) represent warrants issued
to
Bourne Capital, LLC and Tsunami Partners, L.P. at various times beginning
in
June 2003, which have been amended and now cover additional shares
and reduced
exercise prices because of the operation of anti-dilution provisions
in the
old warrants.
None
of
the selling shareholders are affiliates of the Company or any subsidiary of the
Company. The selling shareholders may offer their shares for sale on a
continuous basis pursuant to rule 415 under the 1933 Act. The footnotes to
the
table give information about such shares. All shares will be issued as
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 is removed in accordance
with rule 144(k).
The
following information on share ownership has been provided to us by the selling
shareholders. There are 19,747,912 shares issued and outstanding as of January
15, 2007; on a pro forma basis as of that date, there would be 20,425,265
shares
outstanding, assuming all warrants covered by this prospectus are exercised.
Percentage ownership for each warrant holder assumes exercise of all warrants
held by each seller (including shares held or issuable on exercise of warrants
which are not covered by this prospectus).
The
information does not reflect exercise of any other options or
warrants.
| |
Shares
of Common Stock Owned
|
|
Number
of Shares Registered
For
Sale
|
|
Percent
Owned Before Offering
|
|
Percent
Owned After Offering*
|
|
Bourne
Capital, LLC
|
455,621(1)
|
|
455,621
|
|
%
|
|
%
|
|
Tsunami
Partners, L.P.
|
162,718(2)
|
|
162,718
|
|
**
|
|
**
|
|
Rocky
Mountain Gas, Inc.
|
506,329
|
|
506,329
|
|
?
|
|
?
|
|
D.B.
Zwirn Special
|
57,807(3)
|
|
961(4)
|
|
?
|
|
?
|
|
Drawbridge
Special
|
57,806(5)
|
|
960(6)
|
|
**
|
|
**
|
|
Cornell
Capital Partners, LP
|
168,531(7)
|
|
168,531
|
|
**
|
|
**
|
|
Newbridge
Securities Corporation
|
1,399(8)
|
|
1,399
|
|
**
|
|
**
|
| |
1,410,211
|
|
1,296,519
|
|
|
|
|
* Reflects
only sale of shares covered by this prospectus.
** Less
than
1%.
|
(1)
|
Includes
42,907 issued shares and 412,714 shares underlying warrants (150,000
shares at $3.25 (expiring August 25, 2009); 35,014 shares at
$3.56
(expiring October 31, 2007); 177,700 shares at $2.87 (expiring
April 30,
2010); and 50,000 shares at $4.23 (expiring November 28, 2008)).
|
|
(2)
|
Includes
62,718 shares underlying a warrant (at $2.87 per share, expiring
January
31, 2008); 75,000 shares underlying a warrant (at $3.25 per share,
expiring August 25, 2009); and 25,000 shares (at $4.23 per share,
expiring
November 28, 2008).
|
|
(3)
|
Includes
31,846 shares underlying a warrant (at $3.20 per share, expiring
March 31,
2008); 25,000 shares underlying a warrant (at $3.81 per share,
expiring
July 31, 2009) and 961 shares underlying warrant (at $3.20 per
share,
expiring March 31, 2008).
|
|
(4)
|
961
shares underlying warrant (at $3.20 per share, expiring March
31,
2008).
|
|
(5)
|
Includes
31,846 shares underlying a warrant (at $3.20 per share, expiring
March 31,
2008); 25,000 shares underlying a warrant (at $3.81 per share,
expiring
July 31, 2009) and 960 shares underlying warrant (at $3.20 per
share,
expiring March 31, 2008).
|
|
(6)
|
960
shares underlying warrant (at $3.20 per share, expiring March
31,
2008).
|
|
(7)
|
Includes
68,531 issued shares and 100,000 shares underlying a warrant
(at $7.15 per
share, expiring June 5, 2009).
|
|
(8)
|
Includes
1,399 issued
shares.
|
Resale
of
the shares covered by this prospectus and owned or to be owned by the selling
shareholders are registered under rule 415 of the general rules and regulations
of the Securities and Exchange Commission, concerning delayed and continuous
offers and sales of securities. In regard to the offer and sale of such shares,
we have made certain undertakings in Part II of the registration statement
of
which this prospectus is part, by which, in general, we have committed to keep
this prospectus current during any period in which the selling shareholders
make
offers to sell the covered securities pursuant to rule 415.
Plan
of Distribution
The
selling shareholders and any of their pledges, 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, or in private transactions. These sales may be at fixed
or
negotiated prices. The selling shareholders may use any one or more of the
following methods when selling shares:
| |
*
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
| |
*
|
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;
|
| |
*
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
| |
*
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
| |
*
|
privately
negotiated transactions;
|
| |
*
|
settlement
of short sales entered into after the date of this
prospectus;
|
| |
*
|
broker-dealers
may agree with the selling shareholder to sell a specified number
of such
shares at a stipulated price per
share;
|
| |
*
|
a
combination of any such methods of
sale;
|
| |
*
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
| |
*
|
any
other method permitted pursuant to applicable
law.
|
The
selling shareholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities Act”), if available, rather than under
this prospectus.
Broker-dealers
engaged by the selling shareholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling shareholders (or, if any broker-dealer acts as agent for the selling
shareholder, from the selling shareholder) in amounts to be negotiated. Each
selling shareholder does not expect these commissions and discounts relating
to
its sales of shares, to exceed what is customary in the types of transactions
involved. In connection with the sale of our common stock, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling shareholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each selling shareholder has informed the
Company that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the common stock.
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the selling shareholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities 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.
Because
selling shareholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be
sold
under Rule 144 rather than under this prospectus. Each selling shareholder
has
advised us that they have not entered into any agreements, understandings or
arrangements with any underwriter or broker-dealer regarding the sale of the
resale shares. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the selling
shareholders.
The
shares will be sold only through registered or licensed brokers or dealers
if
required under applicable state securities laws. In addition, in certain states,
the resale shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to our common stock for a period of two business
days prior to the commencement of the distribution. In addition, the selling
shareholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including Regulation M, which may limit
the timing of purchases and sales of shares of our common stock by the selling
shareholders or any other person. We will make copies of this prospectus
available to the selling shareholders and have informed them of the need to
deliver a copy of this prospectus at or prior to the time of the sale, as
required by law.
In
order
to comply with the securities laws of certain states, if applicable, the shares
will be sold in such jurisdictions, if required, only through registered or
licensed brokers or dealers. In addition, in certain states the shares may
not
be sold unless the shares have been registered or qualified for sale in such
state or an exemption from registration or qualification is
available.
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
Our
articles of incorporation and bylaws provide that we shall indemnify directors
provided that the indemnification shall not eliminate or limit the liability
of
a director for breach of the director's duty or loyalty to the corporation
or
its stockholders, or for acts of omission not in good faith or which involve
intentional misconduct or a knowing violation of law.
Wyoming
law permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorney's
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought
by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if these directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be
in
or not opposed to the best interests of the corporation and, with respect to
any
criminal action or proceedings, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agent in connection
with the defense or settlement of an action or suit, and only with respect
to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent
that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or 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 (www.sec.gov).
Incorporation
of Certain Information by Reference
Our
common stock is registered with the Commission under section 12(g) of the
Securities Exchange Act of 1934 (the "1934 Act"). Under the 1934 Act, we file
with the Commission periodic reports on Forms 10-K, 10-Q and 8-K, and proxy
statements, and our officers and directors file reports of stock ownership
on
Forms 3, 4 and 5. These filings may be viewed and downloaded from the
Commission's internet website (http://www.sec.gov) at the EDGAR location, and
also may be inspected and copied at the Public Reference Section of the
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates;
the
telephone number for the Public Reference Section is 1.800.SEC.0330. Information
on the operation of the Public Reference Room can be obtained by calling the
Commission at 1.800.SEC.0330.
All
of
the information contained in the following documents filed with the Commission
is incorporated by reference into this prospectus:
-
Form
10-K for the twelve months ended December 31, 2005 (filed April 11, 2006).
-
Form
10-Q for the nine months ended September 30, 2006 (filed November 14,
2006).
-
Form
10-Q for the six months ended June 30, 2006 (filed August 14,
2006).
-
Form
10-Q for the three months ended March 31, 2006 (filed May 16,
2006).
-
Definitive
proxy statement for June 23, 2006 annual meeting of shareholders (filed May 9,
2006).
-
Forms
8-K:
-
Extension
of term of Exclusivity Agreement with sxr Uranium One to April 6, 2007
(filed
January 8, 2007).
-
Announcement
of exchange ratio for proposed merger of Crested Corp. into U.S. Energy
Corp.,
the ratio being one share of U.S. Energy Corp. for each two shares of
Crested
Corp. not already owned by U.S. Energy Corp., the proposed merger being
subject to certain conditions (filed December 26, 2006).
-
Amendment
to the Letter Agreement with Kobex Resources (filed December 8,
2006)
-
Press
release on third quarter 2006 earnings (filed November 16, 2006)
-
Confirmation
by 10th
Circuit Court of Appeals of lower court dismissal of third party challenges
to
BLM issuance of patents on the molybdenum mining claims within the Lucky
Jack
property in Colorado (filed November 9, 2006)
-
Termination
of agreements with Cornell Capital Partners, LP, and notification to
Crested
Corp. that U.S. Energy Corp. has established a special committee to evaluate
whether and on what terms an offer might be made to acquire the public
stock
of Crested Corp. not already owned by U.S. Energy Corp. (filed November
2,
2006)
-
Appointment
of new director and payment of obligation to Enterra Energy Trust (filed
October 19, 2006).
Letter
agreement with Kobex Resources for the molybdenum property (filed October
10,
2006),
Sale
of
Pinnacle Gas Resources shares, settlement of litigation with Phelps-Dodge,
and
completion of sale of Enterra Energy Trust Units (filed September 27,
2006).
Amendment
to registration rights agreement with Cornell Capital Partners, LP (filed
September 6, 2006.
Phelps-Dodge
litigation - award for fees and costs against USE (filed July 28, 2006).
Exclusivity
agreement with sxr Uranium One (filed July 13, 2006).
Annual
meeting of shareholders vote, and amendment to articles of incorporation
(filed
June 26, 2006).
Sutter
Gold Mining Inc. Financing (filed May 31, 2006).
Decision
in Nukem Arbitration (filed May 19, 2006).
Agreement
with Uranium Power Corp. (filed May 12, 2006).
Amended
agreement with Cornell Capital Partners, LP (filed May 8, 2006).
Agreement
with Cornell Capital Partners, LP (filed April 13, 2006).
Update
on
Shootaring Canyon uranium mill license, and activities on uranium properties
(filed March 24, 2006).
Reacquisition
of Mt. Emmons molybdenum property (filed March 2, 2006).
Reacquisition
of Ticaboo, Utah townsite assets through foreclosure on promissory note (filed
February 28, 2006).
Amendment
of Purchase and Sale Agreement with Uranium Power Corp. (filed January 17,
2006).
Form
8-A
(filed September 20, 2001, and amended November 17, 2005) registering the
preferred stock purchase rights (in connection with the shareholder rights
plan).
The
SEC
file number for all of these filings is 000-6814.
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, will also be 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 Steven R.
Youngbauer, Assistant Secretary. You also may request these documents by
telephone: 1.307.856.9271. Our internet address is www.usnrg.com. Except
for
reports filed by officers and directors under section 16(a) of the 1934 Act,
our
1934 Act filings are not directly available through our internet address
(website), but you can access those filings through the link at our internet
address (website) or at sec.gov.
Legal
Matters
The
validity of the issuance of the shares offered has been passed upon by The
Law
Office of Stephen E. Rounds, Denver, Colorado.
Experts
Our
consolidated balance sheet as of December 31, 2005 and the related consolidated
statements of operations, shareholders' equity and cash flows for the two years
ended December 31, 2005, incorporated by reference in this prospectus and
registration statement, have been audited by Epstein Weber & Conover, PLC,
Scottsdale, Arizona, as indicated in their report with respect thereto, and
are
incorporated along with their report, from the Annual Report on Form 10-K for
the twelve months ended December 31, 2005, in reliance upon the authority of
such firm as experts in accounting and auditing.
Our
consolidated statements of operations, shareholders' equity and cash flows
for
the year ended December 31, 2003, and Schedule II for the year ended December
31, 2003, incorporated by reference in this prospectus and registration
statement, have been audited by Grant Thornton LLP, independent
registered public accounting firm, as indicated in their reports with respect
thereto and are incorporated by reference,
in
reliance upon the authority of such firm as experts in accounting and
auditing.
1,296,519
Shares Common Stock
U.S.
Energy Corp.
___________________
PROSPECTUS
___________________
January
___, 2007
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.
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
|
|
$
|
94
|
|
|
National
Association of Securities Dealers, Inc. examination fee
|
|
|
n/a
|
|
|
Accounting
|
|
|
2,000
|
|
|
Legal
fees and expenses
|
|
|
2,500
|
|
|
Printing
|
|
|
n/a
|
|
|
Blue
Sky fees and expenses
|
|
|
n/a
|
|
|
Transfer
agent
|
|
|
n/a
|
|
|
Escrow
agent
|
|
|
n/a
|
|
|
Miscellaneous
|
|
|
n/a
|
|
|
Total
|
|
$
|
4,594
|
|
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.
Item
16. Exhibits and Financial Statement Schedule.
|
Exhibit
No.
|
Title
of Exhibit
|
|
| |
|
|
| |
|
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|
| |
(Epstein,
Weber & Conover)
|
**
|
| |
|
|
|
23.2
|
Consent
of Independent Registered Public Accounting Firm
|
|
| |
(Grant
Thornton LLP)
|
**
|
| |
|
|
|
23.3
and 5
|
Consent
and Opinion re Legality
|
**
|
| |
|
|
| |
|
|
|
**
|
Previously
filed
|
|
Item
17. Undertakings.
(a) Rule
415 Offering.
The
undersigned registrant hereby undertakes:
(1) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or in the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
Provided,
however, that paragraphs (1)(i) and (1)(ii) do not apply to this registration
statement if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or 15(d)
of
the Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That,
for
the purpose of determining any liability under the Act, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the
offering.
(b) Filing
incorporating subsequent Exchange Act documents by
reference.
The
undersigned registrant hereby undertakes that for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a
new registration statement relating to the securities offered therein, and
the
offering of such securities at that time shall be deemed to be the initial
bona
fide
offering
thereof.
(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.
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 amendment to registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized
in the
city of Riverton, State of Wyoming, on January 19, 2006.
U.S.
ENERGY CORP. (Registrant)
|
Date:
January 19, 2007
|
By:
|
/s/
Keith G. Larsen
|
| |
|
Keith
G. Larsen, CEO
|
| |
|
|
|
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:
January 19, 2007
|
By:
|
/s/
Keith G. Larsen
|
| |
|
Keith
G. Larsen, Director
|
| |
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Mark J. Larsen
|
| |
|
Mark
J. Larsen, Director
|
| |
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Harold F. Herron
|
|
|
|
Harold
F. Herron, Director
|
| |
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Michael H. Feinstein
|
| |
|
Michael
H. Feinstein, Director
|
|
|
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Don C. Anderson
|
| |
|
Don
C. Anderson, Director
|
|
|
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
H. Russell Fraser
|
| |
|
H.
Russell Fraser, Director
|
| |
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Michael Anderson
|
| |
|
Michael
Anderson, Director
|
| |
|
|
| |
|
|
|
Date:
January 19, 2007
|
By:
|
/s/
Robert Scott Lorimer
|
| |
|
Robert
Scott Lorimer,
|
| |
|
Principal
Financial Officer/
|
| |
|
Chief
Accounting Officer
|