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PROSPECTUS SUMMARY
Unless the context otherwise requires, all references in this
prospectus to the “Company,” “Yuma,”
“our,” “us,” and “we” refer to
Yuma Energy, Inc., a Delaware corporation, and its subsidiaries, as
a common entity, and “Yuma California” prior to our
reincorporation from California to Delaware. Unless otherwise
noted, all information in this prospectus relating to oil, natural
gas and natural gas liquids reserves and the estimated future net
cash flows attributable to those reserves are based on estimates
prepared by independent reserve engineers and are net to our
interest. Throughout this prospectus we make statements that
may be classified as “forward-looking.” Please refer to
the ”Cautionary Statement Regarding Forward-Looking
Statements” section above for an explanation of these
types of statements.
Overview
Yuma
Energy, Inc., a Delaware corporation, is an independent
Houston-based exploration and production company focused on
delivering competitive returns to shareholders by acquiring,
developing and exploring for conventional and unconventional oil
and natural gas resources. We are committed to conducting our
business in a manner that protects the environment and public
health while upholding our values of integrity, trust, and open
communications in all business activities. Our operations are
currently focused on onshore properties located in central and
southern Louisiana, south, east and west Texas, and Kern and Santa
Barbara Counties in California. In addition, we have non-operated
positions in the South Texas Eagle Ford, East Texas Woodbine and
the Bakken Shale in North Dakota. Our common stock is traded on the
NYSE MKT under the trading symbol “YUMA.”
Recent Developments
Reincorporation Merger and Davis Merger
On
October 26, 2016, Yuma Energy, Inc., a California corporation
(“Yuma California”), merged with and into the Company
resulting in the reincorporation from California to Delaware (the
“Reincorporation Merger”). In connection with the
Reincorporation Merger, Yuma California converted each outstanding
share of its 9.25% Series A Cumulative Redeemable Preferred Stock,
no par value per share (the “Yuma California Series A
Preferred Stock”), into 35 shares of its common stock, no par
value per share (the “Yuma California Common Stock”),
and then each share of Yuma California Common Stock was exchanged
for one-twentieth of one share of common stock, $0.001 par value
per share, of the Company (the “common
stock”). Immediately after the Reincorporation Merger on
October 26, 2016, a wholly owned subsidiary of the Company merged
(the “Davis merger”) with and into Davis Petroleum
Acquisition Corp., a Delaware corporation (“Davis”), in
exchange for approximately 7,455,000 shares of common stock and
1,754,179 shares of Series D Convertible preferred stock, $0.001
par value per share (the “Series D preferred stock”).
The Series D preferred stock had an aggregate liquidation
preference of approximately $19.4 million and a conversion rate of
$11.0741176 per share at the closing of the Davis Merger, and will
be paid dividends in the form of additional shares of Series D
preferred stock at a rate of 7% per annum. As a result of the Davis
merger, the former holders of Davis common stock received
approximately 61.1% of the then outstanding common stock of the
Company and thus acquired voting control. Although the Company was
the legal acquirer, for financial reporting purposes the Davis
Merger was accounted for as a reverse acquisition of the Company by
Davis.
As part
of the closing of the Davis Merger, we entered into a registration
rights agreement (the “Registration Rights Agreement”)
with Sam L. Banks, RMCP PIV DPC, LP, RMCP PIV DPC II, LP, Davis
Petroleum Investment, LLC, Sankaty Davis, LLC, Paul-ECP2 Holdings,
LP, HarbourVest Partners VIII – Buyout Fund L.P., Dover
Street VII L.P., Michael S. Reddin, Thomas E. Hardisty, Susan J.
Davis, Gregory P. Schneider, and Steven Enger (collectively, the
“Stockholders”), pursuant to which we agreed to
register, at our cost, with the SEC the resale of the common stock
issued to such holders of common stock and the common stock issued
upon conversion of the Series D Preferred Stock. We agreed to file
a shelf registration statement (the “Shelf Registration
Statement”) with the SEC on or before April 24, 2017, subject
to certain exceptions. The Stockholders may request registration no
more than three times during any twelve (12) consecutive months, of
shares having an estimated offering price of greater than $5.0
million. No request may be made after the fourth anniversary of the
effectiveness of the Shelf Registration Statement. In addition, if
we file a registration statement within four years of the
effectiveness of the Shelf Registration Statement, we must offer to
the Stockholders the opportunity to include the resale of their
shares in the registration statement, subject to customary
qualifications and limitations.
Senior Credit Agreement
On
October 26, 2016, the Company and three of its subsidiaries, as the
co-borrowers, entered into a credit agreement providing for a $75.0
million three-year senior secured revolving credit facility (the
“credit agreement”) with Société
Générale (“SocGen”), as administrative agent,
SG Americas Securities, LLC (“SG Americas”), as lead
arranger and bookrunner, and the Lenders signatory thereto
(collectively with SocGen, the “Lender”).
The borrowing base of
the credit facility was reaffirmed on May 19, 2017 at $44.0 million
and subsequently reduced by $3.5 million to $41.5 million after we
completed the sale of certain oil and gas properties for $5.5
million. The borrowing base is generally subject to redetermination
on April 1st and October 1st of each year, but the next
redetermination is scheduled for September 15, 2017, as well as
special redeterminations described in the credit agreement. The
amounts borrowed under the credit agreement bear annual interest
rates at either (a) the London Interbank Offered Rate
(“LIBOR”) plus 3.00% to 4.00% or (b) the prime lending
rate of SocGen plus 2.00% to 3.00%, depending on the amount
borrowed under the credit facility and whether the loan is drawn in
U.S. dollars or Euro dollars. Principal amounts outstanding under
the credit facility are due and payable in full at maturity on
October 26, 2019. All of the obligations under the credit
agreement, and the guarantees of those obligations, are secured by
substantially all of our assets. Additional payments due under the
credit agreement include paying a commitment fee to the Lender in
respect of the unutilized commitments thereunder. The commitment
rate is 0.50% per year of the unutilized portion of the borrowing
base in effect from time to time. We are also required to pay
customary letter of credit fees.
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The credit
agreement contains a number of covenants that, among other things,
restrict, subject to certain exceptions, our ability to incur
additional indebtedness, create liens on assets, make investments,
enter into sale and leaseback transactions, pay dividends and
distributions or repurchase our capital stock, engage in mergers or
consolidations, sell certain assets, sell or discount any notes
receivable or accounts receivable, and engage in certain
transactions with affiliates.
Preferred Stock
On
October 26, 2016 as part of the closing of the Davis Merger, we
issued 1,754,179 shares of Series D Preferred Stock. The Series D
Preferred Stock had an aggregate liquidation preference of
approximately $19.4 million and a conversion rate of $11.0741176
per share at the closing of the Davis Merger, and will be paid
dividends in the form of additional shares of Series D Preferred
Stock at a rate of 7% per annum.
Risk Factors
An
investment in our common stock involves a number of risks that
include the speculative nature of oil and natural gas exploration,
competition, volatile commodity prices and other material factors.
Importantly, due to an abundance of supply in the global crude oil
market and the domestic natural gas market, oil and natural gas
prices have decreased significantly. While we continue to believe
our inventory of drilling opportunities is repeatable and
relatively low-risk, should oil and natural gas prices materially
decrease even further, we may reevaluate our development drilling
program. Any postponement or elimination of our development
drilling program could result in a reduction of proved reserve
volumes and related standardized measure. You should carefully
consider, in addition to the other information contained in this
prospectus, the risks described or incorporated by reference in
“Risk Factors” before investing in our common stock.
These risks could materially affect our business, financial
condition and results of operations and cause the trading price of
our common stock to decline. You could lose part or all of your
investment. You should bear in mind, in reviewing this prospectus,
that past experience is no indication of future performance. You
should read “Cautionary Statement Regarding Forward-Looking
Statements” for a discussion of what types of statements are
forward-looking statements, as well as the significance of such
statements in the context of this prospectus.
The
Offering
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Common
stock offered by the selling stockholders
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10,917,957 shares
(1)
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Common
stock to be outstanding after the offering
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14,358,374 shares
(2)
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Use of
proceeds
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We
will not receive any proceeds from the sale of shares of common
stock by the selling stockholders.
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Dividend
policy
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We
do not anticipate paying any cash dividends on our common stock. In
addition, our credit facility prohibits the payment of cash
dividends.
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You should
carefully read and consider the information set forth under the
heading “Risk Factors” and the risk factors set forth
in documents incorporated by reference herein and all other
information set forth in this prospectus before deciding to invest
in our common stock.
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NYSE
MKT symbol
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“YUMA”
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(1)
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Includes 9,118,474
shares of common stock held by the selling stockholders and
1,799,483 shares of common stock issuable upon conversion of
1,799,483 shares our Series D Preferred Stock also held by certain
selling
stockholders.
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(2)
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Assumes 1,799,483
shares of Series D Preferred Stock are converted into 1,799,483
shares of common
stock.
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Corporate Information
Our
principal executive offices are located at 1177 West Loop South,
Suite 1825, Houston, Texas 77027. Our telephone number is (713)
768-7000. You can find more information about us at our website
located at www.yumaenergyinc.com. Our Annual Report on Form 10-K,
our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K
and any amendments to those reports are available free of charge on
or through our website, which is not part of this prospectus. These
reports are available as soon as reasonably practicable after we
electronically file these materials with, or furnish them to, the
SEC. Information filed with the SEC may be read or copied at the
SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. Information on operation of the Public
Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website at www.sec.gov
that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the
SEC, including us.
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RISK FACTORS
Investing in our
common stock involves a high degree of risk. Before deciding
whether to purchase shares of our common stock, you should
carefully consider the risks and uncertainties described under
“Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2016, any subsequent
Quarterly Report on Form 10-Q and our other filings with the
SEC, all of which are incorporated by reference herein. If any of
these risks actually occur, our business, financial condition and
results of operations could be materially and adversely affected
and we may not be able to achieve our goals, the value of our
securities could decline and you could lose some or all of your
investment. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
If any of these risks occur, the trading price of our common stock
could decline materially and you could lose all or part of your
investment
.
The
common stock to be offered and sold using this prospectus will be
offered and sold by the selling stockholders named in this
prospectus. See “Principal and Selling Stockholders.”
Accordingly, we will not receive any proceeds from the sale of
shares of our common stock in this offering.
MARKET PRICE OF OUR COMMON STOCK
Our
common stock is listed for trading on the NYSE MKT under the symbol
“YUMA.” The following table sets forth, for the periods
indicated, the high and low sales prices per share of our common
stock on the NYSE MKT, adjusted to reflect the 1-for-20 reverse
stock split that was completed on October 26, 2016 as part of the
closing of the Davis Merger and our reincorporation from California
to Delaware
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Quarter
Ended
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2015
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March 31
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$
42.20
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$
20.20
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June
30
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$
23.40
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$
9.80
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September
30
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$
16.60
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$
6.00
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December
31
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$
12.00
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$
2.60
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2016
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March 31
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$
6.60
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$
3.00
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June
30
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$
7.40
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$
3.80
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September
30
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$
6.20
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$
3.98
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December
31
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$
5.40
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$
1.94
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2017
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March 31
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$
3.91
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$
2.06
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June 30
(through June 22, 2017)
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$
3.17
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$
1.01
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As of
June 22, 2017, there were approximately 200 stockholders of record
of our common stock. On June 22, 2017, the last sale price of our
common stock as reported on the NYSE MKT was $1.04 per
share.
Dividends
We have
not paid cash dividends on our common stock in the past two years
and we do not anticipate that we will declare or pay dividends on
our common stock in the foreseeable future. Payment of dividends,
if any, is within the sole discretion of our Board of Directors and
will depend, among other factors, upon our earnings, capital
requirements and our operating and financial condition. In
addition, our credit facility does not permit us to pay dividends
on our common stock.
DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
The
following table sets forth certain information as of June 22, 2017,
regarding our directors and executive officers:
Name
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Age
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Position
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Sam L.
Banks
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67
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Director
and Chief Executive Officer
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James
W. Christmas
(1)(3)
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69
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Director
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Frank
A. Lodzinski
(2)
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67
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Director
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Neeraj
Mital
(3)
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50
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Director
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Richard
K. Stoneburner
(2)
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63
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Chairman
of the Board
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J.
Christopher Teets
(1)(2)
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44
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Director
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Paul D.
McKinney
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58
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President
and Chief Operating Officer
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James
J. Jacobs
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39
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Executive
Vice President, Chief Financial Officer, Treasurer and Corporate
Secretary
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(1)
Member of the Audit
Committee.
(2)
Member of the
Compensation Committee.
(3)
Member of the
Nominating and Governance Committee.
Below
is information about each of our directors and executive officers,
including biographical data for at least the past five years and an
assessment of the skills and qualifications of each
director.
Sam L. Banks
has been our Chief
Executive Officer and a member of the Board of Directors since the
closing of the Davis Merger on October 26, 2016. He served as
President of the Company from October 26, 2016 through April 2017.
He was the Chief Executive Officer and Chairman of the Board of
Directors of Yuma California from September 10, 2014 and also our
President since October 10, 2014 through October 26, 2016. He was
the Chief Executive Officer and Chairman of the Board of Directors
of Yuma Co. and its predecessor since 1983. He was also the founder
of Yuma Co. He has 39 years of experience in the oil and natural
gas industry, the majority of which he has been leading Yuma Co.
Prior to founding Yuma Co., he held the position of Assistant to
the President of Tomlinson Interests, a private independent oil and
gas company. Mr. Banks graduated with a Bachelor of Arts from
Tulane University in New Orleans, Louisiana, in 1972, and in 1976
he served as Republican Assistant Finance Chairman for the
re-election of President Gerald Ford, under former Secretary of
State, Robert Mosbacher.
The Board of Directors,
in reviewing and assessing the contributions of Mr. Banks to the
Board, determined that his leadership and intimate knowledge of the
oil and gas industry, the Company’s structure, history, and
operations, provide the Board of Directors with company-specific
experience and expertise.
James W. Christmas
has served as a
director and a member of the audit and nominating committees of the
Board since the closing of the Davis Merger on October 26, 2016. He
served as a director and member of the audit and compensation
committees of Yuma California from September 10, 2014 through
October 26, 2016. He has served as a director of The Yuma
Companies, Inc. (predecessor to Yuma California) (“Yuma
Co.”) since November 2013. Mr. Christmas began serving as a
director of Petrohawk Energy Corporation (“Petrohawk”)
on July 12, 2006, effective upon the merger of KCS Energy, Inc.
(“KCS”) into Petrohawk. He continued to serve as a
director, and as Vice Chairman of the Board of Directors, for
Petrohawk until BHP Billiton acquired Petrohawk in August 2011. He
also served on the audit committee and the nominating and corporate
governance committee. Mr. Christmas served as a member of the Board
of Directors of Petrohawk, a wholly-owned subsidiary of BHP
Billiton, and as chair of the financial reporting committee of such
board from August 2013 through September 2014. Since February 2012,
Mr. Christmas has served on the board of directors of Halcón
Resources Corporation (“Halcón”) as Lead Outside
Director and serves as chairman of its audit committee. On January
29, 2014, Mr. Christmas was appointed to the Board of Directors of
Rice Energy, Inc., and serves as chairman of its audit committee
and as a member of its compensation committee and governance
committee. He also serves on the Board of Governors of St.
John’s University. He served as President and Chief Executive
Officer of KCS from 1988 until April 2003 and Chairman of the Board
and Chief Executive Officer of KCS until its merger into Petrohawk.
Mr. Christmas was a Certified Public Accountant in New York and was
with Arthur Andersen & Co. from 1970 until 1978 before leaving
to join National Utilities & Industries (“NUI”), a
diversified energy company, as Vice President and Controller. He
remained with NUI until 1988, when NUI spun out its unregulated
activities that ultimately became part of KCS. As an auditor and
audit manager, controller and in his role as CEO of KCS, Mr.
Christmas was directly or indirectly responsible for financial
reporting and compliance with SEC regulations, and as such has
extensive experience in reviewing and evaluating financial reports,
as well as in evaluating executive and board performance and in
recruiting directors. He has extensive experience in oil and gas
company growth issues, with a focus on capital structure and
business development strategies. Prior to his appointment as a
Director, Mr. Christmas was a Board Advisor to Yuma Co. from August
2012 through November 2013. Mr. Christmas received a
bachelor’s degree in accounting and an honorary degree of
commercial science from St. John’s University.
The Board of Directors,
in reviewing and assessing the contributions of Mr. Christmas to
the Board, determined that his prior experience as an executive and
director and his past audit, accounting and financial reporting
experience provide significant contributions and expertise to the
Company’s Board of Directors.
Frank A. Lodzinski
has served as a
director and a member of the compensation committee of the Board
since the closing of the Davis Merger on October 26, 2016. He
served as a director and member of the audit committee of Yuma
California from September 10, 2014 through October 26, 2016. He has
served as a director of Yuma Co. since August 2012. He has more
than 43 years of oil and gas industry experience, including the
successful completion of several strategic combinations. In 1984,
Mr. Lodzinski formed Energy Resource Associates, Inc., which
acquired management and controlling interests in oil and gas
limited partnerships, joint ventures and producing properties.
Certain partnerships were exchanged for common shares of Hampton
Resources Corporation in 1992, which was ultimately sold to
Bellwether Exploration in 1995. In 1996, Mr. Lodzinski acquired
Cliffwood Oil and Gas and then a controlling interest in Texoil
where he served as President, CEO, and a Director. Texoil was sold
to Ocean Energy in 2001. From 2001 to 2004, Mr. Lodzinski served as
President, CEO, and Director of AROC to direct the restructuring
and ultimate liquidation of the company in 2004. In 2004, Mr.
Lodzinski formed Southern Bay Energy and merged that company into
GeoResources, Inc. He served as President, CEO, and a Director
until GeoResources was sold to Halcón Resources Corporation
for $1.0 billion in 2012. He served as President and Chief
Executive Officer of Oak Valley Resources, LLC from its formation
in December 2012 until the closing of its strategic combination
with Earthstone Energy, Inc. (“Earthstone”) in December
2014. Since December 2014, Mr. Lodzinski has served as
Chairman, President and Chief Executive Officer of Earthstone. He
holds a BSBA degree in Accounting and Finance from Wayne State
University in Detroit, Michigan. The Board of Directors, in
reviewing and assessing Mr. Lodzinski’s contributions to
the Board, determined that his industry experience, intimate
knowledge of the oil and gas industry, and prior roles in building
and managing publicly traded oil and gas companies provide
significant contributions to the Company’s Board of
Directors.
Neeraj Mital
has served as a director
and a member of the nominating committee of the Board since the
closing of the Davis Merger on October 26, 2016. Previously, he
served as a director of Davis from 2009 through October 26, 2016.
Since 2016, he has been a consultant to Evercore Partners Inc., a
New York-based global investment banking advisory and investment
firm. From 1999 to 2016, he was a Senior Managing Director of
Evercore Partners Inc., including Co-Head of its private equity
business from 2008 to 2016. Mr. Mital has twenty-seven years of
experience in principal investing and mergers and acquisitions.
Prior to joining Evercore in 1998, he was a Managing Director at
The Blackstone Group. From 1989 through 1991, Mr. Mital was with
Salomon Brothers Inc. Prior to joining Salomon Brothers, he was a
CPA with Price Waterhouse. Mr. Mital has also served on the Board
of Directors of MBI Holdings, Inc. since 2006 and alliantgroup, LP
since 2006. He received a B.S. in economics from The Wharton School
at the University of Pennsylvania. The Board of Directors, in
reviewing and assessing the contributions of Mr. Mital to the
Board, determined that his past experience makes him uniquely
positioned to provide the Board with insight and advice on a broad
range of corporate strategic, financial, and governance
matters.
Richard K. Stoneburner
has served as
Chairman of the Board and member of the compensation committee of
the Board since the closing of the Davis Merger on October 26,
2016. He served as a director and member of the compensation
committee of Yuma California from September 10, 2014 through
October 26, 2016. He has served as a director of Yuma Co. since
November 2013. He began his career as a geologist in 1977. Mr.
Stoneburner joined Petrohawk Energy in 2003, where he led
Petrohawk’s exploration program from 2005 to 2007 prior to
serving as the company’s President and COO from 2007 to 2011.
When BHP Billiton acquired Petrohawk in 2011, he was appointed
President of the North America Shale Production Division where he
managed operations in the Fayetteville Shale, the Haynesville
Shale, the Eagle Ford Shale, and the Permian Basin divisions. Mr.
Stoneburner currently serves on the Board of Directors of Tamboran
Resources Limited and serves as a Managing Director to the private
equity firm Pine Brook Partners. Prior to his appointment as
Director, Mr. Stoneburner was a Board Advisor to Yuma Co. from July
2013 through November 2013. Mr. Stoneburner has a bachelor’s
degree in geology from the University of Texas and a master’s
degree in geological sciences from Wichita State
University.
The Board of Directors,
in reviewing and assessing Mr. Stoneburner’s
contributions to the Board, determined that his prior industry
experience ranging from staff geologist, corporate owner,
exploration manager to C-level executive, his leading role in
exploring for and developing some of the most successful resource
plays in the United States; his significant experience in the
challenges of resource play operations and development; and playing
a key role in implementing a comprehensive health, safety,
environment and community management system for unconventional
shale plays while at BHP Billiton Petroleum, provide significant
contributions to the Company’s Board of
Directors.
J. Christopher Teets
has served as a
director and a member of the audit and compensation committees of
the Board since the closing of the Davis Merger on October 26,
2016. He has been a partner of Red Mountain Capital Partners LLC
(“Red Mountain”), an investment management firm, since
February 2005. Before joining Red Mountain, Mr. Teets was an
investment banker at Goldman, Sachs & Co. Mr. Teets
joined Goldman, Sachs & Co. in 2000 and was made a Vice
President in 2004. Prior to Goldman, Sachs & Co.,
Mr. Teets worked in the investment banking division of
Citigroup. Mr. Teets has also served as a director of Marlin
Business Services Corp., since May 2010, as a director of
Nature’s Sunshine Products, Inc., since December 2015 and as
a director of Air Transport Services Group, Inc. since February
2009. Mr. Teets also previously served as a director of Encore
Capital Group, Inc. from May 2007 until June 2015, and Affirmative
Insurance Holdings, Inc. from August 2008 until September 2011. He
holds a bachelor’s degree from Occidental College and an MSc
degree from the London School of Economics. The Board of Directors,
in reviewing and assessing the contributions of Mr. Teets to the
Board, determined that his significant business and investment
banking experience as well as public company board experience make
him uniquely positioned to provide the Board with insight and
advice on a broad range of corporate strategic, financial and
governance matters.
James J. Jacobs
has been our Chief
Financial Officer, Treasurer and Corporate Secretary since the
closing of the Davis Merger on October 26, 2016. He was the Chief
Financial Officer, Treasurer and Corporate Secretary of Yuma
California from December 2015 through October 26, 2016. He served
as Vice President – Corporate and Business Development of
Yuma California immediately prior to his appointment as Chief
Financial Officer in December 2015 and has been with us since 2013.
He has 15 years of experience in the financial services and energy
sector. In 2001, Mr. Jacobs worked as an Energy Analyst at Duke
Capital Partners. In 2003, Mr. Jacobs worked as a Vice President of
Energy Investment Banking at Sanders Morris Harris where he
participated in capital markets financing, mergers and
acquisitions, corporate restructuring and private equity
transactions for various sized energy companies. From 2006 through
2013, Mr. Jacobs was the Chief Financial Officer, Treasurer and
Secretary at Houston America Energy Corp., where he was responsible
for financial accounting and reporting for U.S. and Colombian
operations, as well as capital raising activities. Mr. Jacobs
graduated with a Master’s Degree in Professional Accounting
and a Bachelor of Business Administration from the University of
Texas in 2001.
Paul D. McKinney
has been our President
and Chief Operating Officer since April 2017 and was our Executive
Vice President and Chief Operating Officer from the closing of the
Davis Merger on October 26, 2016 through April 2017. He was the
Executive Vice President and Chief Operating Officer of Yuma
California from October 2014 through October 26, 2016. Mr. McKinney
served as a petroleum engineering consultant for Yuma
California’s predecessor from June 2014 to September 2014 and
for Yuma California from September 2014 to October 2014. Mr.
McKinney served as Region Vice President, Gulf Coast Onshore, for
Apache Corporation from 2010 through 2013, where he was responsible
for the development and all operational aspects of the Gulf Coast
region for Apache. Prior to his role as Region Vice President, Mr.
McKinney was Manager, Corporate Reservoir Engineering, for Apache
from 2007 through 2010. From 2006 through 2007, Mr. McKinney was
Vice President and Director, Acquisitions & Divestitures for
Tristone Capital, Inc. Mr. McKinney commenced his career with
Anadarko Petroleum Corporation and held various positions with
Anadarko over a 23 year period from 1983 to 2006, including his
last title as Vice President of Reservoir Engineering, Anadarko
Canada Corporation. Mr. McKinney has a Bachelor of Science degree
in Petroleum Engineering from Louisiana Tech
University.
Board of Directors
Our
Board of Directors is divided into three classes, with each class
serving staggered three-year terms. Each of our three classes of
directors has two members. Messrs. Christmas and Stoneburner are
Class I directors, Messrs. Mital and Teets are Class II directors,
and Messrs. Banks and Lodzinski are Class III directors. This
classification of our Board could have the effect of increasing the
length of time necessary to change the composition of a majority of
the Board of Directors. In general, at least two annual meetings of
stockholders will be necessary for stockholders to effect a change
in a majority of the members of the Board of
Directors.
Director Independence
The
current Board consists of six directors, one of whom is currently
employed by the Company (Mr. Banks). In March 2017, the Board
conducted an annual review and affirmatively determined that our
five non-employee directors (Messrs. Christmas, Lodzinski, Mital,
Stoneburner and Teets) are “independent” as that term
is defined in the listing standards of the NYSE MKT. The Board made
a subjective determination as to each independent director that no
relationship exists, which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. In making these
determinations, the Board reviewed and discussed information
provided with regard to each director’s business and personal
activities as they may relate to the Company and its
management. Further, the Board determined that Mr. Banks is
not independent because he is the Chief Executive Officer of the
Company.
Board Committees
To
assist it in carrying out its duties, the Board has delegated
certain authority to an Audit Committee, a Compensation Committee,
and a Nominating and Governance Committee as the functions of each
are described below. Each member of the Audit, Compensation and
Nominating Committees has been determined by the Board to be
“independent” for purposes of the listing standards of
NYSE MKT and the rules of the SEC, including the heightened
“independence” standard required for members of the
Audit Committee. Additionally, our Board has determined that each
member of the Compensation Committee is an “outside
director” as defined for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the
“Code”), and is a “Non-Employee Director”
as defined in Rule 16b-3 under the Securities Exchange
Act.
Audit
Committee
.
The Audit
Committee provides oversight of the Company’s accounting
policies, internal controls, financial reporting practices and
legal and regulatory compliance. Among other things, the Audit
Committee: appoints our independent auditor and evaluates its
independence and performance; maintains a line of communication
between the Board, our management and the independent auditor; and
oversees compliance with the Company’s policies for
conducting business, including ethical business standards. Our
Board of Directors has determined that Mr. Christmas qualifies
as an “audit committee financial expert” as that term
is defined in the listing standards of NYSE MKT and the applicable
rules of the SEC.
The
members of our Audit Committee prior to the closing of the Davis
Merger were Ben T. Morris (Chairperson), James W. Christmas and
Frank A. Lodzinski. The Board determined that Mr. Morris was an
“audit committee financial expert” prior to the closing
of the Davis Merger. In 2016, the Audit Committee held four
meetings prior to the closing of the Davis Merger. The members of
our Audit Committee as of the closing of the Davis Merger were
James W. Christmas (Chairperson), Stuart E. Davies and J.
Christopher Teets. In 2016, after the closing of the Davis Merger,
the Audit Committee held one meeting. Mr. Davies resigned from the
Board and the Audit Committee on December 22, 2016.
The audit committee has adopted a
charter that is posted on our website.
Compensation
Committee.
The Compensation Committee oversees the
development and administration of the Company’s compensation
policies and programs. The primary function of this Committee is to
review and approve executive compensation and benefit
programs. Additionally, this Committee approves the
compensation of our named executive officers, including the Chief
Executive Officer. The Compensation Committee has retained a
compensation consultant to assist the Committee in oversight and
review of compensation policies of the Company. Our Chief Executive
Officer is expected to recommend to the Compensation Committee the
compensation for our other named executive officers.
The
members of our Compensation Committee prior to the closing of the
Davis Merger were Messrs. Stoneburner (Chairperson), Christmas and
Morris. During 2016 and prior to the Davis Merger, the Compensation
Committee two meetings. The members of our Compensation Committee
as of the closing of the Davis Merger were Messrs. Teets
(Chairperson), Lodzinski and Stoneburner. In 2016, after the
closing of the Davis Merger, the Compensation Committee did not
hold any meetings.
The
compensation committee has adopted a charter that is posted on our
website.
Nominating and Governance
Committee.
Prior to the closing of the Davis Merger, we did
not have a Nominating and Governance Committee because we were not
required to have one as a “controlled company” as
defined under the corporate governance rules of the NYSE MKT. After
the closing of the Davis Merger, we were no longer a
“controlled company” and established a Nominating and
Governance Committee for the purpose recommending prospective
directors to fill vacancies that may arise from time to time and to
propose individuals for election to the Board. The members of our
Nominating and Governance Committee as of the closing of the Davis
Merger were Messrs. Mital (Chairperson), Christmas and Davies.
After the closing of the Davis Merger, the Nominating and
Governance Committee did not hold any meetings.
The Nominating and Governance
Committee has adopted a charter that is posted on our
website.
Compensation Committee Interlocks and Insider
Participation
The
members of our Compensation Committee until the Davis Merger were
Messrs. Stoneburner, Christmas and Morris and the members since the
closing of the Davis Merger are Messrs. Teets, Lodzinski and
Stoneburner. There are no members of our Compensation Committee who
were officers or employees of the Company or any of our
subsidiaries during fiscal year 2016. No members were formerly
officers of the Company or had any relationship otherwise requiring
disclosure hereunder. During fiscal year 2016, no interlocking
relationships existed between any of our named executive officers
or members of our Board or Compensation Committee, on the one hand,
and the executive officers or members of the board of directors or
compensation committee of any other entity, on the other
hand.
PRINCIPAL AND SELLING STOCKHOLDERS
The
shares of our common stock covered by this prospectus (the
“Shares”) were issued by us to the selling stockholders
in connection with the Davis Merger or prior to the Davis Merger to
Mr. Banks. The selling stockholders may from time to time offer and
sell pursuant to this prospectus any or all of the Shares owned by
them, but make no representation that any of the Shares will be
offered for sale. The following table sets forth the
beneficial ownership of our common stock that is currently owned
by:
●
each of the selling
stockholders;
●
each person known
to us beneficially own more than 5% of any class of our outstanding
common stock;
●
each member of our
Board of Directors;
●
each of our named
executive officers; and
●
all of our
directors and executive officers as a group.
For
further information regarding material transactions between us and
certain of our stockholders, see “Certain Relationships and
Related Party Transactions.”
All
information with respect to common stock ownership of the selling
stockholders has been furnished by or on behalf of the selling
stockholders and is as of June 22, 2017. We believe, based on
information supplied by the selling stockholders, that except as
may otherwise be indicated in the footnotes to the table below, the
selling stockholders have sole voting and dispositive power with
respect to the common stock reported as beneficially owned by them,
except to the extent this power may be shared with a spouse.
Because the selling stockholders identified in the table may sell
some or all of the Shares owned by them which are included in this
prospectus, no estimate can be given as to the number of Shares
available for resale hereby that will be held by the selling
stockholders upon termination of this offering. In addition, the
selling stockholders may have sold, transferred or otherwise
disposed of, or may sell, transfer or otherwise dispose of, at any
time and from time to time, the common stock they hold in
transactions exempt from the registration requirements of the
Securities Act after the date on which they provided the
information set forth on the table below. We have, therefore,
assumed for the purposes of the following table, that the selling
stockholders will sell all of the Shares beneficially owned by them
that are covered by this prospectus, but will not sell any other
shares of our common stock that they may presently own. The percent
of beneficial ownership for the selling stockholders prior to this
offering is based on 14,358,374 shares of our common stock
outstanding as of the date of this prospectus, including 1,799,483
shares of our common stock included in this prospectus that are
underlying the outstanding shares of Series D Preferred
Stock.
All
information with respect to beneficial ownership has been furnished
by the respective 5% or more stockholders, selling stockholders,
directors, or executive officers, as the case may be. We have not
sought to verify such information.
|
Shares of Common Stock
Beneficially Owned Prior to this Offering
(1)
|
Shares of Common
Stock Offered Hereby
|
Shares of Common Stock
Beneficially Owned After this Offering
(3)
|
Name of
Beneficial Owner
|
|
|
|
|
|
Selling
Stockholders
|
|
|
|
|
|
Sam L. Banks
(4)
|
2,116,013
|
14.7
%
|
2,073,766
|
37,909
|
*
|
Susan J.
Davis
|
5,698
|
*
|
5,698
|
-
|
-
|
Thomas E.
Hardisty
|
46,244
|
*
|
46,244
|
-
|
-
|
Michael S.
Reddin
|
219,379
|
1.5
%
|
219,379
|
-
|
-
|
Red Mountain
Capital Partners, LLC
(6)
|
4,399,242
|
30.7
%
|
4,321,242
|
78,000
|
*
|
Davis Petroleum
Investment, LLC
(7)
|
2,027,444
|
14.1
%
|
2,027,444
|
-
|
-
|
Sankaty Davis, LLC
(8)
|
1,607,301
|
11.2
%
|
1,607,301
|
-
|
-
|
Dover Street VII,
L.P.
(9)
|
230,852
|
1.6
%
|
230,852
|
-
|
-
|
Harbourvest
Partners VIII-Buyout Fund L.P.
(10)
|
230,852
|
1.6
%
|
230,852
|
-
|
-
|
Paul-ECP2 Holdings,
LP
(11)
|
150,841
|
1.1
%
|
150,841
|
-
|
-
|
TOTAL
|
11,033,866
|
|
10,917,957
|
115,909
|
|
|
|
|
|
|
|
Named
Executive Officers
|
|
|
|
|
|
Sam L. Banks
(4)
|
2,116,013
|
14.7
%
|
|
|
|
Paul D. McKinney
(4)
|
57,498
|
*
|
|
|
|
James J. Jacobs
(4)
|
35,172
|
*
|
|
|
|
|
|
|
|
|
|
Non-Employee
Directors
|
|
|
|
|
|
James W. Christmas
(4)
|
85,586
|
*
|
|
|
|
Frank A. Lodzinski
(4)(5)
|
41,595
|
*
|
|
|
|
Neeraj Mital
(4)
|
17,045
|
*
|
|
|
|
Richard K.
Stoneburner
(4)
|
38,479
|
*
|
|
|
|
J. Christopher
Teets
(4)
|
17,045
|
*
|
|
|
|
|
|
|
|
|
|
Named
Executive Officers and Directors as a Group (eight
total):
|
2,408,433
|
|
|
|
|
*
|
Represents
less than one percent.
|
|
|
(1)
|
Includes
9,118,474 shares of our common stock currently owned and 1,799,483
shares of common stock underlying the outstanding shares of our
Series D Preferred Stock.
|
|
|
(2)
|
The
percentage is based upon 12,558,891 shares of common stock issued
and outstanding on June 22, 2017 and 1,799,483 shares of common
stock underlying the outstanding shares of our Series D Preferred
Stock.
|
|
|
(3)
|
We do
not know when or in what amounts the selling stockholders may offer
shares for sale. The selling stockholders might not sell any or all
of the shares offered by this prospectus. Because the selling
stockholders may offer all or some of the shares pursuant to this
offering and because there are currently no agreements or
understandings with respect to the sale of any shares, we cannot
estimate the number of shares that will be held by the selling
stockholders after completion of this offering. However, for
purposes of this table, we have assumed that, after completion of
this offering, none of the shares covered by this prospectus will
be held by the selling stockholders.
|
|
|
(4)
|
Includes
unvested shares of restricted stock subject to forfeiture for Mr.
Banks – 11,613; Mr. Jacobs – 5,461; Mr. McKinney
– 10,247, Mr. Christmas – 12,783; Mr. Lodzinski –
12,783; Mr. Mital – 12,783; Mr. Stoneburner – 12,783;
Mr. Teets – 12,783; and all directors and named executive
officers as a group — 91,236, and stock appreciation rights
that are exercisable within 60 days from the date hereof for Mr.
Banks – 19,020; Mr. Jacobs – 8,944; and Mr. McKinney
– 15,652, and all named executive officers as a group —
43,616.
|
|
|
(5)
|
Includes
21,923 shares of common stock held in the name of Azure Energy, LLC
(“Azure”). Mr. Lodzinski disclaims beneficial ownership
of the shares held by Azure, except to the extent of his pecuniary
interests therein.
|
|
|
(6)
|
Red
Mountain Capital Partners LLC, a Delaware limited liability company
(“RMCP LLC”), provides that: (i) RMCP PIV DPC, LP, a
Delaware limited partnership (“DPC PIV”), beneficially
owns, in the aggregate, 2,525,052 shares of common stock and has
the power to vote or direct the vote, and the power to dispose or
direct the disposition of, all such shares; (ii) RMCP PIV DPC II,
LP, a Delaware limited partnership (“DPC PIV II” and,
together with DPC PIV, the “DPC Funds”), beneficially
owns, in the aggregate, 1,796,190 shares of Series D Preferred
Stock and has the power to vote or direct the vote, and the sole
power to dispose or direct the disposition of, all such shares;
(iii) RMCP DPC LLC, a Delaware limited liability company, is the
general partner of DPC PIV and, in such capacity, controls DPC PIV
and thus may be deemed to beneficially own, and to have the power
to vote or direct the vote, or dispose or direct the disposition
of, all of the common stock beneficially owned by DPC PIV; (iv)
RMCP DPC II LLC, a Delaware limited liability company, is the
general partner of DPC PIV II and, in such capacity, controls DPC
PIV II and thus may be deemed to beneficially own, and to have the
power to vote or direct the vote, or dispose or direct the
disposition of, all of the Series D Preferred Stock beneficially
owned by DPC PIV II; (v) RMCP DPC LLC is controlled by its managing
member, RMCP GP LLC, a Delaware limited liability company
(“RMCP GP”); (vi) each of RMCP GP and RMCP DPC II LLC
is controlled by its managing member, RMCP LLC; (vii) RMCP LLC
beneficially owns, in the aggregate, 78,000 shares of common stock
and has the power to vote or direct the vote, and the power to
dispose or direct the disposition of, all such shares; (viii) RMCP
LLC is controlled by its managing member, Red Mountain Capital
Management, Inc., a Delaware corporation (“RMCM”); (ix)
RMCM is controlled by its sole executive officer, sole director and
sole shareholder, Willem Mesdag, a natural person and citizen of
the United States of America; and (ix) accordingly, in his capacity
as the sole executive officer and sole director of RMCM and through
the indirect control exercised by RMCM, RMCP LLC and RMCP GP over
the DPC Funds and RMCP LLC, Mr. Mesdag may be deemed to have voting
and investment power over all of the common stock and Series D
Preferred Stock owned by the DPC Funds and RMCP LLC. Each of RMCM
and Mr. Mesdag disclaims beneficial ownership of all shares of
common stock and Series D Preferred Stock directly held by the DPC
Funds and RMCP LLC.
|
|
|
(7)
|
Evercore
Partners II LLC, is the managing member of Davis Petroleum
Investment, LLC. Evercore Partners II LLC is managed by its
managing members, which have voting and dispositive control over
the securities owned by Evercore Partners II LLC and which consist
of Roger C. Altman, Paul D. Billyard, Ciara A. Burnham, Jane
Gladstone, William O. Hiltz, John E. Honts, Timothy G. Lalonde,
Daniel B. Mendelow, Eduardo G. Mestre, Michael J. Price, Jason
Sobol and David Ying. Each of Evercore Partners II LLC, Roger C.
Altman, Paul D. Billyard, Ciara A. Burnham, Jane Gladstone, William
O. Hiltz, John E. Honts, Timothy G. Lalonde, Daniel B. Mendelow,
Eduardo G. Mestre, Michael J. Price, Jason Sobol and David Ying
disclaim beneficial ownership of such securities. The address of
each of these entities, Roger C. Altman, Paul D. Billyard, Ciara A.
Burnham, Jane Gladstone, William O. Hiltz, John E. Honts, Timothy
G. Lalonde, Daniel B. Mendelow, Eduardo G. Mestre, Michael J.
Price, Jason Sobol and David Ying is 55 East 52nd Street, New York,
New York 10055.
|
|
|
(8)
|
Bain Capital Credit Member, LLC (“BCCM”), a Delaware
limited liability company, is the administrative member of Sankaty
Davis, LLC (“Sankaty Davis”), a Delaware limited
liability company. Voting and dispositive rights over the
securities owned by Sankaty Davis is held by
Timothy
Barns, Jonathan DeSimone, Mike Ewald, Sally Dornaus, Jeffrey
Hawkins, James Kellogg III, Jonathan Lavine, Christopher Linneman,
Jeffrey Robinson, Ranesh Ramanathan, and Kathleen Rockey, in their
capacities as members of BCCM. Each of BCCM, Timothy Barns,
Jonathan DeSimone, Mike Ewald, Sally Dornaus, Jeffrey Hawkins,
James Kellogg III, Jonathan Lavine, Christopher Linneman, Jeffrey
Robinson, Ranesh Ramanathan, and Kathleen Rockey disclaim
beneficial ownership of such securities. The address of each of
these entities, Timothy Barns, Jonathan DeSimone, Mike Ewald, Sally
Dornaus, Jeffrey Hawkins, James Kellogg III, Jonathan Lavine,
Christopher Linneman, Jeffrey Robinson, Ranesh Ramanathan, and
Kathleen Rockey is 200 Clarendon Street, Boston, Massachusetts
02116.
|
|
|
(9)
|
Voting
and investment power over the securities owned by Dover Street VII
L.P. (“Dover Street”) is exercised by the Investment
Committee of HarbourVest Partners VIII-Buyout Fund L.P.
(“HarbourVest”), which currently consists of Mr. John
M. Toomey, Jr., Mr. Robert Wadsworth, Mr. Gregory V. Stento, and
Ms. Kathleen M. Bacon. HarbourVest and the members of the
HarbourVest Investment Committee disclaim beneficial ownership of
the shares held by Dover Street. The address for Dover Street and
HarbourVest is One Financial Center, Boston, MA 02111.
|
|
|
(10)
|
Voting
and investment power over the securities owned by HarbourVest is
exercised by the Investment Committee of HarbourVest , which
currently consists of Mr. John M. Toomey, Jr., Mr. Robert
Wadsworth, Mr. Gregory V. Stento, and Ms. Kathleen M. Bacon.
HarbourVest and the members of the HarbourVest Investment Committee
disclaim beneficial ownership of the shares held by HarbourVest.
The address for HarbourVest is One Financial Center, Boston, MA
02111.
|
|
|
(11)
|
Randall
Schwed has voting and investment control of the securities. The
address is 575 Market Street, Suite 2500, San Francisco, California
94105.
|
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Approval of Related Party
Transactions
Our
officers and directors are required to obtain Audit Committee
approval for any proposed related party transactions. In addition,
our Code of Ethics requires that each director, officer and
employee must do everything he or she reasonably can to avoid
conflicts of interest or the appearance of conflicts of interest.
Our Code of Ethics states that a conflict of interest exists when
an individual’s private interest interferes in any way or
even appears to interfere with our interests and sets forth a list
of broad categories of the types of transactions that must be
reported to our Board. Under our Code of Ethics, we reserve the
right to determine when an actual or potential conflict of interest
exists and then to take any action we deem appropriate to prevent
the conflict of interest from occurring.
Registration Rights Agreement
As part
of the closing of the Davis Merger, we entered into a registration
rights agreement (the “Registration Rights Agreement”)
with Sam L. Banks, a director and our Chief Executive Officer,
affiliates of Red Mountain Capital Partners, LLC, Davis Petroleum
Investment, LLC, Sankaty Davis, LLC, and certain other former
stockholders of Davis (collectively, the
“Stockholders”), pursuant to which we agreed to
register, at our cost, with the SEC the resale of the common stock
issued to such holders of common stock and the common stock
issuable upon conversion of the Series D Preferred Stock. We agreed
to file a shelf registration statement (the “Shelf
Registration Statement”) with the SEC on or before April 24,
2017, subject to certain exceptions. The Stockholders may request
registration no more than three (3) times during any twelve (12)
consecutive months, of shares having an estimated offering price of
greater than $5.0 million. No request may be made after the fourth
anniversary of the effectiveness of the Shelf Registration
Statement. In addition, if we file a registration statement within
four years of the effectiveness of the Shelf Registration
Statement, we must offer to the Stockholders the opportunity to
include the resale of their shares in the registration statement,
subject to customary qualifications and limitations.
DESCRIPTION OF CAPITAL STOCK
General
The
following description summarizes certain important terms of our
capital stock. Because it is only a summary, it does not contain
all the information that may be important to you. For a complete
description of the matters set forth in this section entitled
“Description of Capital Stock,” you should refer our
amended and restated certificate of incorporation, which is
sometimes referred to as the “Certificate of
Incorporation,” and our amended and restated bylaws, which is
sometimes referred to as the “Bylaws,” and to the
applicable provisions of Delaware law. Our authorized capital stock
consists of 120,000,000 shares of capital stock, $0.001 par value
per share, of which:
●
100,000,000 shares
are designated as common stock; and
●
20,000,000 shares
are designated as preferred stock.
As of
June 22, 2017, there were 12,558,891 shares of common stock
outstanding and 1,807,385 shares of Series D Preferred Stock
outstanding. The Board of Directors is authorized, without
stockholder approval except as required by the listing standards of
the NYSE MKT, to issue additional shares of capital
stock.
Common Stock
Dividend Rights
Subject
to preferences that may apply to any shares of preferred stock
outstanding at the time, the holders of common stock are entitled
to receive dividends out of funds legally available if the Board of
Directors, in its discretion, determines to issue dividends and
then only at the times and in the amounts that the Board of
Directors may determine.
Voting Rights
Holders
of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders. However, each holder
of preferred stock will be entitled to vote equally with the
holders of the common stock on an as-converted basis (initially
each share of preferred stock is convertible into one share of
common stock).We have not provided for cumulative voting for the
election of directors in the Certificate of Incorporation. The
Certificate of Incorporation establishes a classified Board of
Directors that is divided into three classes with staggered
three-year terms. Only the directors in one class will be subject
to election by a majority of the votes cast at each annual meeting
of stockholders, with the directors in the other classes continuing
for the remainder of their respective three-year terms. In the
event that the number of nominees for director exceeds the number
of directors to be elected, directors shall be elected by a
plurality of the votes cast.
No Preemptive or Similar Rights
Common
stock is not entitled to preemptive rights, and is not subject to
conversion, redemption or sinking fund provisions.
Right to Receive Liquidation Distributions
If we
become subject to a liquidation, dissolution or winding-up, the
assets legally available for distribution to our stockholders would
be distributable ratably among the holders of common stock and any
participating preferred stock outstanding at that time, subject to
prior satisfaction of all outstanding debt and liabilities and the
preferential rights of and the payment of liquidation preferences,
if any, on any outstanding shares of preferred stock.
Fully Paid and Non-Assessable
All of
the outstanding shares of common stock are fully paid and
non-assessable.
Preferred Stock
The
Board of Directors is authorized, subject to limitations prescribed
by Delaware law, to issue preferred stock in one or more series, to
establish from time to time the number of shares to be included in
each series and to fix the designation, powers, preferences and
rights of the shares of each series and any of its qualifications,
limitations or restrictions, in each case without further vote or
action by our stockholders. Our Board of Directors can also
increase or decrease the number of shares of any series of
preferred stock, but not below the number of shares of that series
then outstanding, without any further vote or action by our
stockholders. The Board of Directors may authorize the issuance of
preferred stock with voting or conversion rights that could
adversely affect the voting power or other rights of the holders of
common stock. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, have the effect of
delaying, deferring or preventing a change in control of us and
might adversely affect the market price of common stock and the
voting and other rights of the holders of common stock. We have no
current plan to issue any shares of preferred stock.
We have
created a series of preferred stock, the Series D Convertible
Preferred Stock (the “Series D Preferred Stock”) with
the terms set forth in the Certificate of Designation of Series D
Convertible Preferred Stock of the Company (the “Certificate
of Designation”).
General
Pursuant to our
Certificate of Incorporation, we are currently authorized to
designate and issue up to 20,000,000 shares of preferred stock,
$0.001 par value per share, in one or more classes or series and,
subject to the limitations prescribed by our Certificate of
Incorporation and Delaware law, with such rights, preferences,
privileges and restrictions of each class or series of preferred
stock, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences and the number of
shares constituting any class or series as the Board of Directors
may determine, without any vote or action by our stockholders. The
Board of Directors has designated a series of preferred stock with
the rights described herein consisting of up to 7,000,000
authorized shares, designated as Series D Convertible Preferred
Stock, which we refer to as the “Series D Preferred
Stock.” Following the designation of the Series D Preferred
Stock by the Board of Directors, we have available 13,000,000
shares of undesignated preferred stock authorized under the terms
of our Certificate of Incorporation. The Board of Directors may,
without the approval of holders of the preferred stock or its
common stock, designate additional series of authorized preferred
stock ranking junior to or on parity with the Series D Preferred
Stock or designate additional shares of the Series D Preferred
Stock and authorize the issuance of such shares.
Maturity
The
Series D Preferred Stock has no stated maturity and will not be
subject to any sinking fund or mandatory redemption. Shares of the
Series D Preferred Stock will remain outstanding indefinitely
unless converted into common stock.
Ranking
The
Series D Preferred Stock will generally rank, with respect to
rights to the payment of dividends and the distribution of assets
upon our liquidation, dissolution or winding up senior to all
classes or series of our common stock and to all other equity
securities issued by us.
Dividends
The
holders of shares of Series D Preferred Stock are entitled to
receive, in preference to all of our common stock, a 7.0% per annum
dividend on the original issue price of each share of Series D
Preferred Stock held by such holder that is cumulative and payable
in kind per share in such number of shares of Series D Preferred
Stock determined using a price per share equal to approximately
$11.0741176 per share (adjusted appropriately for stock splits,
stock dividends, recapitalizations, consolidations, mergers,
reclassifications and the like with respect to the Series D
Preferred Stock) (the “original issue price’’)
and calculated on actual number of days elapsed in a year of 365
days. In lieu of the issuance of a fractional share of Series D
Preferred Stock as a dividend, we will issue a whole share of
Series D Preferred Stock (rounded to the nearest whole share),
determined on the basis of the total number of shares of Series D
Preferred Stock held by the holder with respect to which such
dividends are being calculated. Such dividends will be cumulative
and compound on a quarterly basis to the extent not paid for any
reason. Dividends will accrue and be cumulative from the date that
the Series D Preferred Stock is issued under the Certificate of
Designation, whether or not we have earnings or profits, whether or
not there are funds legally available for the payment of such
dividends and whether or not such dividends are declared or paid.
Quarterly dividends will be paid on the last business day of the
fiscal quarter (the “payment date”). Dividends paid in
an amount less than the total amount of such accrued dividends at
the time shall be allocated pro rata on a share-by-share basis
among all shares of Series D Preferred Stock at the time
outstanding. The record date for determination of the holders of
Series D Preferred Stock entitled to receive payment of a dividend
thereon shall be fifteen (15) days before the payment date, or such
other date that we establish no less than ten (10) days and no more
than thirty (30) days preceding the payment date. In
addition, if and when any dividend is declared or paid by the board
with respect to the common stock, the board will also declare and
pay the same dividend on each share of the Series D Preferred Stock
then outstanding on an as-if-converted to common stock
basis.
Liquidation Preference
In the
event of a triggering event, the holders of Series D Preferred
Stock shall be entitled to receive, prior and in preference to any
distribution of any of our assets to the holders of Common Stock by
reason of their ownership thereof, the preference amount payable
with respect to each outstanding share of Series D Preferred Stock
held by them. If, upon the occurrence of such triggering event, the
assets and funds thus distributed or the consideration paid to the
holders of our capital stock, as the case may be, among the holders
of Series D Preferred Stock shall be insufficient to permit the
payment to such holders of the full preference amounts, then the
entire assets and funds of the Company legally available for
distribution or the consideration paid to the holders of our
capital stock, as the case may be, shall be distributed ratably
among the holders of Series D Preferred Stock in proportion to the
preference amounts each such holder is otherwise entitled to
receive.
The
term “triggering event” means a transaction or series
of related transactions that results in (i) the sale, conveyance,
transfer or other disposition of all or substantially all of the
property, assets or business of the Company or its subsidiaries,
taken as a whole, (ii) the merger of the Company with or into or
the consolidation of the Company with any other corporation,
limited liability company or other entity (other than our
wholly-owned subsidiary), (iii) a third party or a group of related
third parties (other than pursuant to an offering registered under
the Securities Act) acquiring from the Company, or from the holders
of our capital stock, shares representing 50% or more of our
outstanding voting power, or (iv) the liquidation, dissolution or
winding up of the Company, either voluntary or involuntary;
provided that none of the following shall be considered a
triggering event: (A) a merger effected exclusively for the purpose
of changing the domicile of the Company or (B) a transaction in
which the our stockholders immediately prior to the transaction own
50% or more of the voting power of the surviving corporation
following the transaction.
The
term “preference amount” means, with respect to each
outstanding share of Series D Preferred Stock, the greater of (x)
the original issue price for each outstanding share of Series D
Preferred Stock then held by them, plus accrued but unpaid
dividends and (y) the amount distributable or the consideration
payable with respect to common stock on the number of shares of
common stock into which such share of Series D Preferred Stock is
convertible in the event of a triggering event if all outstanding
shares of Series D Preferred Stock were deemed to have converted
into shares of common stock immediately prior to such triggering
event.
Redemption
The
Series D Preferred Stock is not redeemable.
Conversion Rights
Optional Conversion
. Each
share of Series D Preferred Stock (including any shares of Series D
Preferred Stock payable as dividends that have accrued but are
unpaid) is convertible, at the option of the holder thereof, at any
time after the date of issuance of such share, at our principal
corporate offices or any transfer agent for such stock, into such
number of fully paid and nonassessable shares of common stock as is
determined by dividing (i) the original issue price ($11.0741176,
subject to adjustment), by (ii) the conversion price (the
“conversion price”) applicable to such share in effect
on the date the stock certificate is surrendered for conversion.
The initial conversion price per share of Series D Preferred Stock
is $11.0741176, subject to adjustment as set forth in Certificate
of Designation.
Mandatory
Conversion
. Each share of Series D
Preferred Stock shall, at our election, automatically be converted
into shares of common stock at the conversion price then in effect
for such share immediately upon a mandatory conversion event. The
term “mandatory conversion event” means any of: (i) the
date specified, if any, by vote or written consent of the holders
of a majority of the outstanding shares of Series D Preferred
Stock; (ii) with respect to any holder, any time that less than 10%
of the original number of shares of Series D Preferred Stock issued
to such holder (as adjusted for stock splits, stock dividends,
reclassification and the like) are held by such holder together
with its affiliates on combined basis; or (iii) with respect to any
holder, when such holder, together with its affiliates on combined
basis, is no longer a holder of shares of common stock (or any
securities received in consideration for such common stock in the
event of merger, reorganization, reclassification or similar
transaction).
Voting Rights
General Voting Rights
. The
holders of the Series D Preferred Stock are entitled to notice of
all stockholder meetings at which holders of common stock are
entitled to vote and are entitled to vote equally with the holders
of the common stock as a single class on an as-converted basis on
any matter presented to our stockholders for their action or
consideration.
Special Voting Rights
. In
addition to any other vote required by law, the Certificate of
Incorporation or the Certificate of Designation, the holders of
shares of Series D Preferred Stock are entitled to vote as a
separate class on all matters specifically affecting the Series D
Preferred Stock. Without limiting the foregoing, we
shall not, either directly or indirectly, by amendment, merger,
consolidation or otherwise, do any of the following without first
obtaining the approval (by vote or written consent, as provided by
law) of the holders of at least a majority of the outstanding
shares of Series D Preferred Stock, and any such act or transaction
entered into without such approval shall be null and void ab
initio, and of no force or effect:
(i) amend
or repeal any provision of, or add any provision to, the
Certificate of Incorporation or the Certificate of Designation if
such action would adversely alter or change the relative rights,
preferences, privileges or powers of the Series D Preferred
Stock;
(ii) authorize
or issue, or obligate itself to issue, any other equity security,
including any security convertible into or exercisable for any
equity security, having a preference over, or being on a parity
with, the Series D Preferred Stock with respect to voting (other
than the pari passu voting rights of common stock), dividends,
redemption, conversion or upon liquidation;
(iii) redeem,
purchase or otherwise acquire (or pay into or set aside for a
sinking fund for such purpose) any share of common stock or any
security (other than Series D Preferred Stock) convertible into or
exchangeable or exercisable for shares of common stock; provided,
however, that this restriction shall not apply to the repurchase of
shares of common stock at fair market value from employees,
officers, directors, consultants or other persons performing
services for us or any subsidiary pursuant to agreements under
which we have the option to repurchase such shares under existing
agreements and/or upon the occurrence of certain events, such as
the termination of employment or service, or pursuant to a right of
first refusal; or
(iv) declare,
pay or set aside any dividends on any class of our capital stock
(other than the payment of dividends on the Series D Preferred
Stock).
Preemptive Rights
No
holders of the Series D Preferred Stock will, as holders of Series
D Preferred Stock, have any preemptive rights to purchase or
subscribe for common stock or any other security.
Anti-Takeover Provisions
The
provisions of Delaware law, the Certificate of Incorporation and
the Bylaws, which are summarized below, may have the effect of
delaying, deferring or discouraging another person from acquiring
control of the Company. They are also designed, in part, to
encourage persons seeking to acquire control of us to negotiate
first with the Board of Directors. We believe that the benefits of
increased protection of our potential ability to negotiate with an
unfriendly or unsolicited acquirer outweigh the disadvantages of
discouraging a proposal to acquire us because negotiation of these
proposals could result in an improvement of their
terms.
Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws
The
Certificate of Incorporation and the Bylaws include a number of
provisions that could deter hostile takeovers or delay or prevent
changes in control of the Board of Directors or management team,
including the following:
Board of Directors Vacancies
. The
Certificate of Incorporation and the Bylaws authorize only our
Board of Directors to fill vacant directorships, including newly
created seats. In addition, the number of directors constituting
the Board of Directors will be permitted to be set only as provided
in, or in the manner provided by the Bylaws. The Bylaws provide
that the number of directors will be no fewer than two and no more
than seven, as determined by resolution of the Board of Directors
from time to time. These provisions would prevent a stockholder
from increasing the size of our Board of Directors and then gaining
control of our Board of Directors by filling the resulting
vacancies with its own nominees. This will make it more difficult
to change the composition of our Board of Directors and will
promote continuity of management.
Stockholder Action; Special Meeting of
Stockholders
. The Certificate of Incorporation provides that
our stockholders may take action by written consent. As a result, a
holder controlling a majority of our capital stock would be able to
amend the Bylaws or remove directors without holding a meeting of
our stockholders called in accordance with the Bylaws. The Bylaws
further provide that special meetings of our stockholders may be
called only by a majority of our Board of Directors, the chairman
of our Board of Directors, our Chief Executive Officer, our
President or by our Corporate Secretary upon request to do so by
holders or at least 10% of the voting power of our outstanding
shares.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations.
The Bylaws provide
advance notice procedures for stockholders seeking to bring
business before our annual meeting of stockholders or to nominate
candidates for election as directors at our annual meeting of
stockholders. The Bylaws will also specify certain requirements
regarding the form and content of a stockholder’s notice.
These provisions might preclude our stockholders from bringing
matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders if
the proper procedures are not followed. We expect that these
provisions may also discourage or deter a potential acquirer from
conducting a solicitation of proxies to elect the acquirer’s
own slate of directors or otherwise attempting to obtain control of
the Company.
No Cumulative Voting
. The Delaware
General Corporation Law (the “DGCL”) provides that
stockholders are not entitled to cumulate votes in the election of
directors unless a corporation’s certificate of incorporation
provides otherwise. The Certificate of Incorporation does not
provide for cumulative voting.
Directors Removed Only for Cause
. The
Certificate of Incorporation provides that stockholders may remove
directors only for cause.
Amendment of Certificate of Incorporation
Provisions
. Any amendment of the above provisions in the
Certificate of Incorporation require approval by holders of at
least a majority of the voting power of our then outstanding
capital stock.
Issuance of Undesignated Preferred
Stock
. The Board of Directors will have the authority,
without further action by our stockholders, to issue up to
20,000,000 shares of undesignated preferred stock with rights and
preferences, including voting rights, designated from time to time
by our Board of Directors. The existence of authorized but unissued
shares of preferred stock would enable our Board of Directors to
render more difficult or to discourage an attempt to obtain control
of the Company by means of a merger, tender offer, proxy contest or
other means.
Forum Selection Provision
. The
Certificate of Incorporation provides that unless we consent to the
selection of an alternative forum, the Court of Chancery of the
State of Delaware shall be the sole and exclusive forum for any (i)
derivative action or proceeding brought on behalf, to the fullest
extent permitted by law, of the Company, (ii) action asserting a
claim of breach of a fiduciary duty owed by any of our directors or
officers to us or our stockholders, creditors or other
constituents, (iii) action asserting a claim against us or any of
our directors or officers arising pursuant to any provision of the
DGCL or the Certificate of Incorporation or the Bylaws, or (iv)
action asserting a claim against us or any of our directors or
officers governed by the internal affairs doctrine, in each such
case subject to the Court of Chancery having personal jurisdiction
over the indispensable parties named as defendants therein. Any
person or entity purchasing or otherwise acquiring any interest in
shares of our capital stock shall be deemed to have notice of and
consented to the forum provisions in the Certificate of
Incorporation.
While
we believe that adoption of a Delaware forum selection provision is
in our best interests and our stockholders, currently, several
legal challenges to forum selection provisions of other companies
are pending, and such cases may result in the invalidation of such
provisions. Further, state or federal courts in other jurisdictions
may not be willing to adhere to our forum selection
provision.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A., 250 Royall Street, Canton, Massachusetts
02021. Its telephone number is (800) 962-4284.
Limitations of Liability and Indemnification
Our
Certificate of Incorporation contains provisions that limit the
liability of our directors for monetary damages to the fullest
extent permitted by Delaware law. Consequently, our directors are
not be personally liable to us or our stockholders for monetary
damages for any breach of fiduciary duties as directors, except
liability for the following:
●
any breach of their
duty of loyalty to us or our stockholders;
●
any act or omission
not in good faith or that involves intentional misconduct or a
knowing violation of law;
●
unlawful payments
of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the DGCL; or
●
any transaction
from which they derived an improper personal benefit.
Any
amendment to, or repeal of, these provisions will not eliminate or
reduce the effect of these provisions in respect of any act,
omission or claim that occurred or arose prior to that amendment or
repeal. If the DGCL is amended to provide for further limitations
on the personal liability of directors of corporations, then the
personal liability of our directors will be further limited to the
greatest extent permitted by the DGCL.
The
Bylaws provide that we will indemnify, to the fullest extent
permitted by law, any person who is or was a party or is threatened
to be made a party to any action, suit or proceeding by reason of
the fact that he or she is or was one of our directors or officers
or is or was serving at our request as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise. The Bylaws provide that we may indemnify to the fullest
extent permitted by law any person who is or was a party or is
threatened to be made a party to any action, suit or proceeding by
reason of the fact that he or she is or was one of our employees or
agents or is or was serving at its request as an employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. The Bylaws also provide that we must advance expenses
incurred by or on behalf of a director or officer in advance of the
final disposition of any action or proceeding, subject to limited
exceptions.
Further, we have
entered into indemnification agreements with each of our directors
and executive officers that may be broader than the specific
indemnification provisions contained in the DGCL. These
indemnification agreements require us, among other things, to
indemnify our directors and executive officers against liabilities
that may arise by reason of their status or service. These
indemnification agreements also require us to advance all expenses
incurred by the directors and executive officers in investigating
or defending any such action, suit or proceeding. We believe that
these agreements are necessary to attract and retain qualified
individuals to serve as directors and executive
officers.
The
limitation of liability and indemnification provisions that are
expected to be included in the Certificate of Incorporation, the
Bylaws and in indemnification agreements that we have entered into
or will enter into with our directors and executive officers may
discourage stockholders from bringing a lawsuit against our
directors and executive officers for breach of their fiduciary
duties. They may also reduce the likelihood of derivative
litigation against our directors and executive officers, even
though an action, if successful, might benefit us and our
stockholders. Further, a stockholder’s investment may be
adversely affected to the extent that we pay the costs of
settlement and damage awards against directors and executive
officers as required by these indemnification provisions. At
present, we are not aware of any pending litigation or proceeding
involving any person who is or was one of our directors, officers,
employees or other agents or is or was serving at our request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, for which
indemnification is sought, and we are not aware of any threatened
litigation that may result in claims for
indemnification.
We have
obtained or will obtain insurance policies under which, subject to
the limitations of the policies, coverage is provided to our
directors and executive officers against loss arising from claims
made by reason of breach of fiduciary duty or other wrongful acts
as a director or executive officer, including claims relating to
public securities matters, and to us with respect to payments that
may be made by us to these directors and executive officers
pursuant to its indemnification obligations or otherwise as a
matter of law.
Certain
of our non-employee directors may, through their relationships with
their employers, be insured and/or indemnified against certain
liabilities incurred in their capacity as members of our Board of
Directors.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that,
in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is therefore
unenforceable.
Listing
Our
common stock currently trades on the NYSE MKT under the symbol
“YUMA.”
PLAN OF DISTRIBUTION
The
selling stockholders may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares or interests in the
shares on any stock exchange, market or trading facility on which
the shares are traded or in private transactions. The selling
stockholders may sell their shares of common stock from time to
time at the prevailing market price or in privately negotiated
transactions.
The
selling stockholders may use any one or more of the following
methods when disposing of shares or interests therein:
●
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;
●
short sales
effected after the date the registration statement of which this
prospectus is a part is declared effective by the SEC;
●
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
●
broker-dealers may
agree with the selling stockholders to sell a specified number of
such shares at a stipulated price per share;
●
any other method
permitted pursuant to applicable law and the terms of the
Registration Rights Agreement; and
●
a combination of
any such methods of sale.
The
selling stockholders may sell the shares at fixed prices, at prices
then prevailing or related to the then current market price or at
negotiated prices. The offering price of the shares from time to
time will be determined by the selling stockholders and, at the
time of the determination, may be higher or lower than the market
price of our common stock on the NYSE MKT or any other exchange or
market.
The
shares may be sold directly or through broker-dealers acting as
principal or agent, or pursuant to a distribution by one or more
underwriters on a firm commitment or best-efforts basis. The
selling stockholders may also enter into hedging transactions with
broker-dealers. In connection with such transactions,
broker-dealers of other financial institutions may engage in short
sales of our common stock in the course of hedging the positions
they assume with the selling stockholders. The selling stockholders
may also enter into options or other transactions with
broker-dealers or other financial institutions 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). In connection with an underwritten offering,
underwriters or agents may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders
or from purchasers of the offered shares for whom they may act as
agents. In addition, underwriters may sell the shares to or through
dealers, and those dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents.
The selling stockholders and any underwriters, dealers or agents
participating in a distribution of the shares may be deemed to be
underwriters within the meaning of the Securities Act, and any
profit on the sale of the shares by the selling stockholders and
any commissions received by broker-dealers may be deemed to be
underwriting commissions under the Securities Act.
The
selling stockholders may agree to indemnify an underwriter,
broker-dealer or agent against certain liabilities related to the
selling of their shares, including liabilities arising under the
Securities Act. Under the Registration Rights Agreement entered
into with the selling stockholders, we have agreed to indemnify the
selling stockholders against certain liabilities related to the
sale of the common stock, including certain liabilities arising
under the Securities Act. Under the Registration Rights Agreement,
we have also agreed to pay the costs, expenses and fees of
registering the shares of common stock. All other expenses of
issuance and distribution will be borne by the selling
stockholders.
The
selling stockholders are subject to the applicable provisions of
the Exchange Act, and the rules and regulations under the
Exchange Act, including Regulation M. This regulation may limit the
timing of purchases and sales of any of the shares of common stock
offered in this prospectus by the selling stockholders. The
anti-manipulation rules under the Exchange Act may apply to
sales of shares in the market and to the activities of the selling
stockholders and their affiliates. Furthermore, Regulation M may
restrict the ability of any person engaged in the distribution of
the shares to engage in market-making activities for the particular
securities being distributed for a period of up to five business
days before the distribution. The restrictions may affect the
marketability of the shares and the ability of any person or entity
to engage in market-making activities for the shares.
To the
extent required, this prospectus may be amended and/or supplemented
from time to time to describe a specific plan of distribution.
Instead of selling the shares of common stock under this
prospectus, the selling stockholders may sell the shares of common
stock in compliance with the provisions of Rule 144 under the
Securities Act, if available, or pursuant to other available
exemptions from the registration requirements of the Securities
Act. Under the securities laws of some states, if applicable, the
securities registered hereby may be sold in those states only
through registered or licensed brokers or dealers. In addition, in
some states such securities may not be sold unless they have been
registered or qualified for sale or an exemption from registration
or qualification requirements is available and is complied
with.
We
cannot assure you that the selling stockholders will sell all or
any portion of our common stock offered hereby.
Under
the Registration Rights Agreement entered into with the selling
stockholders, we agreed to, subject to the terms, conditions and
limitations of the Registration Rights Agreement, keep the
registration statement of which this prospectus constitutes a part
continuously effective under the Securities Act until the date when
all of the shares covered by such registration statement have been
sold or cease to be Registrable Securities thereunder (as such term
is defined in the Registration Rights Agreement).
LEGAL MATTERS
The
validity of our common stock offered by this prospectus will be
passed upon for us by Jones & Keller, P.C., Denver,
Colorado.
EXPERTS
The
financial statements of Yuma Energy, Inc. as of December 31,
2016 and for the year then ended, incorporated by reference in this
prospectus and elsewhere in this registration statement, have been
so incorporated by reference in reliance on the report of Grant
Thornton LLP, registered public accountants, upon the authority of
said firm as experts in auditing and accounting.
The
financial statements for the year ended December 31, 2015
incorporated in this Prospectus by reference to the Annual Report
on Form 10-K for the year ended December 31, 2016 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and
accounting.
Information about
the estimated net proved reserves and the future net cash flows
attributable to the oil and natural gas reserves of Yuma Energy,
Inc. as of December 31, 2016 and for the year ended December 31,
2016 and included in this prospectus was prepared by Netherland,
Sewell & Associates, Inc., an independent reserve
engineering firm, and is included herein in reliance upon their
authority as experts in reserves and present values.
WHERE YOU CAN FIND MORE INFORMATION
We are
required to file annual and quarterly reports and other information
with the SEC. You may read and copy any materials we file with the
SEC at the SEC’s Public Reference Room at 100 F Street,
N.E., Room 1580, Washington, D.C., 20549. Please call
1-800-SEC-0330 for further information on the operation of the
Public Reference Room. Our filings will also be available to the
public from commercial document retrieval services and at the web
site maintained by the SEC at http://www.sec.gov. Our reports and
other information that we have filed, or may in the future file,
with the SEC are not incorporated by reference into and do not
constitute part of this prospectus.
We have
filed with the SEC a registration statement on Form S-1
(including the exhibits, schedules and amendments thereto) under
the Securities Act, with respect to the shares of our common stock
offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the
exhibits and schedules thereto. For further information with
respect to the common stock offered hereby, we refer you to the
registration statement and the exhibits and schedules filed
therewith. Statements contained in this prospectus as to the
contents of any contract, agreement or any other document are
summaries of the material terms of such contract, agreement or
other document and are not necessarily complete. With respect to
each of these contracts, agreements or other documents filed as an
exhibit to the registration statement, reference is made to the
exhibits for a more complete description of the matter
involved.
INCORPORATION BY REFERENCE
We
“incorporate by reference” information from other
documents that we file with the SEC into this prospectus, which
means that we disclose important information to you by referring
you to those documents. The information incorporated by reference
is deemed to be part of this prospectus except for any information
that is superseded by information included directly in this
prospectus, and the information that we file later with the SEC
will automatically supersede this information. Any statement
contained in this prospectus or any prospectus supplement or a
document incorporated by reference in this prospectus or in any
prospectus supplement will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement
contained in this prospectus or in any other subsequently filed
document that is incorporated by reference in this prospectus
modifies or superseded the statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded,
to constitute a part of this prospectus. You should not assume that
the information in this prospectus is current as of the date other
than the date on the cover page of this prospectus.
The
following documents previously filed by us with the SEC are
incorporated by reference in this prospectus:
●
Our Annual Report
on Form 10-K for the year ended December 31, 2016 filed with the
SEC on April 12, 2017;
●
Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2017 filed with
the SEC on May 11, 2017;
●
Our Current Reports
on Form 8-K, as filed with the SEC on April 26, 2017, May 1, 2017,
May 23, 2017 and June 19, 2017; and
●
The description of
our common stock contained in our Registration Statement on Form
8-A, as filed with the SEC on October 25, 2016, including any
amendment to that form that we may file in the future for the
purpose of updating the description of our common
stock.
We are
also incorporating by reference into this prospectus any additional
documents that we may file with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act on or after the effective
date of the registration statement and prior to the termination of
this offering.
You may
request a copy of any document incorporated by reference in this
prospectus and any exhibit specifically incorporated by reference
in those documents, at no cost, by writing or telephoning us at the
following address or telephone number:
Yuma
Energy, Inc.
Attention:
Corporate Secretary
1177
West Loop South, Suite 1825
Houston,
Texas 77027
(713)
968-7000
Yuma Energy (AMEX:YUMA)
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