U.S. ENERGY CORP. (NASDAQ:USEG) Files An 8-K Entry into a Material Definitive Agreement

U.S. ENERGY CORP. (NASDAQ:USEG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On March 4, 2021, U.S. Energy Corp. (“U.S. Energy”, the “Company”, “we” or “us”), entered into and closed the transactions contemplated by a Debt Conversion Agreement (the “Conversion Agreement”) with APEG Energy II, L.P. (“APEG”). Patrick E. Duke, a former director of the Company, has shared voting power and shared investment power over APEG. to the Conversion Agreement, APEG converted $412,500 of debt owed to it by the Company to the terms of that certain Secured Promissory Note issued by the Company to APEG on September 24, 2020, into 97,962 shares of restricted common stock of the Company, based on a conversion price of $4.21 per share, a 9.9% discount to the ten day volume weighted average price of the Company’s common stock on the 10 trading days immediately preceding the signing of Conversion Agreement (the “Discounted VWAP”). The Conversion Agreement contains customary representations and warranties of the parties.

Also, on March 4, 2021, APEG entered into a Subscription Agreement with the Company, whereby APEG subscribed to purchase 90,846 shares of restricted common stock of the Company for an aggregate of $382,536, based on the Discounted VWAP. The $382,536 subscription price was paid by way of the forgiveness by APEG of the same amount of funds owed by the Company to APEG in reimbursement of APEG’s legal costs in connection with those certain shareholder derivative actions brought by APEG against the Company and its former Chief Executive Officer in Texas and Colorado, which were dismissed in August 2020 and May 2020, respectively. The Subscription Agreement contains customary representations and warranties of the parties.

The foregoing summary description of the Conversion Agreement and Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Conversion Agreement and Subscription Agreement, which are incorporated by reference as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, and are incorporated by reference into this Item 1.01.

Item 3.02. Unregistered Sales of Equity Securities.

As noted in Item 1.01 above, which description is incorporated by reference into this Item 3.02 in its entirety, on March 4, 2021, the Company issued APEG 97,962 shares of restricted common stock of the Company to the Conversion Agreement. The issuance of the common shares was exempt from registration to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), because such shares were exchanged by the Company with an existing security holder of the Company exclusively where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.

As noted in Item 1.01 above, which description is incorporated by reference into this Item 3.02 in its entirety, on March 4, 2021, the Company sold APEG 90,846 shares of restricted common stock. The issuance of the common shares to the Subscription Agreement was exempt from registration to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act, since the foregoing issuance did not involve a public offering, the recipient was an “accredited investor”, and the recipient acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. The securities are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or to an exemption therefrom.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1* Debt Conversion Agreement by and between U.S. Energy Corp. and APEG Energy II, L.P. dated as of March 4, 2021
10.2* Subscription Agreement of APEG Energy II, L.P., dated as of March 4, 2021

*Filed herewith.


US ENERGY CORP Exhibit
EX-10.1 2 ex10-1.htm   Exhibit 10.1   DEBT CONVERSION AGREEMENT   This Debt Conversion Agreement (this “Agreement”) dated March 4,…
To view the full exhibit click here

Story continues below

About U.S. ENERGY CORP. (NASDAQ:USEG)

U.S. Energy Corp. (U.S. Energy) is an independent energy company focused on the acquisition and development of oil and gas producing properties in the continental United States. The Company’s business activities are focused on South Texas and the Williston Basin in North Dakota. The Company operates through Oil and Gas segment. The Company participates in oil and gas projects primarily as a non-operating working interest owner through exploration and development agreements with various oil and gas exploration and production companies. The Company is also pursuing acquisitions of exploration, development and production-stage oil and gas properties or companies. The Company holds a geographically and geologically diverse portfolio of oil-weighted prospects in varying-stages of exploration and development. The Company engages in the prospect stages either for its own account or with prospective partners to enlarge its oil and gas lease ownership base.

An ad to help with our costs