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 December 31, 2020, U.S. Energy Corp. (“U.S. Energy”, the “Company”, “we” or “us”), entered into and closed the transactions contemplated by an Exchange Agreement (the “Exchange Agreement”) with Mt. Emmons Mining Company (“Mt. Emmons”). At the time of the entry into the Exchange Agreement, Mt. Emmons owned all 50,000 shares of the Company’s outstanding Series A Convertible Preferred Stock (the “Series A Shares”), which, as of September 30, 2020, had an aggregate liquidation preference of $3,537,982.

to the Exchange Agreement, Mt. Emmons returned the Series A Shares to the Company, which shares were subsequently cancelled, in exchange for $2 million in cash and 328,000 shares of the Company’s common stock (the “Common Shares”).

The Exchange Agreement contains customary representations and warranties. The Exchange Agreement also includes a contractual lock-up, to which Mt. Emmons agreed not to sell or transfer any of the Common Shares until April 1, 2021 without the prior written consent of the Company, except to an affiliate of Mt. Emmons which also must agree to be bound by the same lock-up terms.

As a result of the transactions disclosed above, the Company no longer has any Series A Convertible Preferred Stock issued or outstanding.

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

Item 1.02. Termination of Material Definitive Agreement.

In connection with the entry into the Exchange Agreement, Mt. Emmons agreed to terminate that certain Investor Rights Agreement by and between the Company and Mt. Emmons dated as of February 11, 2016.

Item 3.02. Unregistered Sales of Equity Securities.

As noted in Item 1.01 above, on December 31, 2020, the Company issued Mt. Emmons the Common Shares to the terms of the Exchange 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 Common 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.

Item 8.01. Other Events.

On January 7, 2021, the Company issued a press release announcing the closing of the Exchange Agreement. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1*# Exchange Agreement by and between U.S. Energy Corp. and Mt. Emmons Mining Company dated as of December 31, 2020
99.1** Press release dated January 7, 2021

*Filed herewith.

**Furnished herewith.

# Certain schedules and exhibits have been omitted to Item 601(b)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that U.S. Energy Corp. may request confidential treatment
EX-10.1 2 ex10-1.htm EXCHANGE AGREEMENT (SERIES A PREFERRED)   Exhibit 10.1       EXCHANGE AGREEMENT   by and between   U.S. ENERGY CORP.   and   MT. EMMONS MINING COMPANY   Dated as of December 31,…
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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.

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