SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 22, 2004 (March 2,
2004)
U.S. ENERGY CORP.
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(Exact Name of Registrant as Specified in its Charter)
Wyoming 0-6814 83-205516
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(State or other jurisdiction Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
Glen L. Larsen Building
877 North 8th West
Riverton, WY 82501
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (307) 856-9271
Not Applicable
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(Former Name, Former Address or Former Fiscal Year,
if Changed From Last Report)
ITEM 5. OTHER MATERIAL EVENTS.
(a) U.S. Energy Corp.'s majority-owned subsidiary Rocky Mountain Gas, Inc.
("RMG") has obtained $1,800,000 of equity funding (600,000 shares of Series A
Preferred Stock, at $3.00 per share) from three institutional investors. In
connection with this funding, the investors also acquired warrants to purchase
150,000 shares of common stock of U.S. Energy Corp. ("USE"). Proceeds will be
used for development work on the producing coalbed methane properties, located
in the Powder River Basin of Wyoming (which properties recently were purchased
from Hi - Pro Production, LLC), and for working capital.
All of the securities are restricted under rule 144. In the second quarter
of 2004, USE will file a re-sale registration statement with the Securities and
Exchange Commission to permit public sale (when the registration statement is
declared effective by the SEC) by the investors of the shares of USE common
stock issued to pay dividends on (and in conversion of) the Series A Preferred
Stock, and the shares underlying the warrants.
The Series A stock bears an annual dividend of 10%, and is convertible to
USE common stock at 90% of volume weighted average pricing (VWAP) on Nasdaq for
the 5 trading days before conversion. Dividends are payable in cash or USE stock
(at RMG's election) on each dividend payment date (March 1, beginning in 2005),
with USE stock calculated in the same manner. Series A stock not converted on
the second anniversary of investment will be converted into shares of RMG common
stock. The Series A stock has a liquidation preference of $4.05 per share.
The USE warrants will be exercisable 25% per quarter (fully exercisable
after one year, then expiring in February 2007, at 90% of VWAP for USE during
the 5 trading days before exercise). If USE's VWAP stock price is over $6.00 for
15 consecutive trading days, USE may give a call notice to the holders; the
unexercised warrants will expire 10 days after notice.
Sanders Morris Harris Inc., Houston, Texas, has acted as financial advisor
to USE and RMG in these transactions. For its placement services in connection
with these transactions, SMH (a registered broker-dealer) was paid a 7%
commission, and issued a five year warrant to purchase 60,000 shares of common
stock of RMG at $3.00 per share.
(b) Separate from the RMG financing, USE has obtained $350,000 of equity
funding, for working capital purposes, from an accredited investor ($300,000 for
100,000 shares of common stock at $3.00 per share, and, for no additional
consideration, three year warrants to purchase 50,000 shares exercisable at
$3.00 per share; and $50,000 for five year warrants to purchase 200,000 shares,
exercisable at $3.00 per share). A cash commission of $22,500 was paid to a
broker-dealer in connection with this transaction. If USE's closing stock price
is at or more than $7.50 for any consecutive 10 trading days, then all of the
unexercised warrants shall expire on the 30th day after such 10th trading day.
These securities are restricted under rule 144. The re-sale registration
statement to be filed covering the investors in the RMG financing also will
cover public sale (when the registration statement is declared effective by the
SEC) by the $350,000 investor in USE, of the shares of common stock purchased,
and the shares of common stock issuable on exercise of the Class A and Class B
warrants.
FORWARD LOOKING STATEMENTS
This Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical fact
included in this Report, are forward-looking statements. In addition, whenever
words like "expect," "anticipate" or "believe" are used, we are making
forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. ENERGY CORP.
Dated: March 22, 2003 By: /s/ Keith G. Larsen
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President