SEC File No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Registration Statement Under Securities Act of 1933
U.S. ENERGY CORP.
(Exact Name of registrant as specified in its charter)
Wyoming 83-0205516
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
877 North 8th West, Riverton, Wyoming 82501, Tel. 307/856-9271
(Address and telephone of registrant's principal executive offices)
Daniel P. Svilar (same address and telephone number)
(Name, address and telephone of agent for service of process)
Approximate date of commencement of proposed sale to public: As
soon as practicable after this registration statement is declared
effective.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933,or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to Section 8(a), may
determine.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. _____
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered in
connection with dividend or interest reinvestment plans, check the
following box. X
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offerings. _____
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. _____
<PAGE>
Calculation of Registration Fee
Title of each Proposed
class of Proposed maximum Amount
securities Amount maximum aggregate of
to be to be offering offering regis.
registered registered per share price fee
Common stock, 812,432 $3,75 $3,046,620(2) $1,051.00
$.01 par shares(1)
Warrants(3) 81,243 n/a n/a -0-
Common stock,
underlying
warrants 81,243 $4.80(4) 389,966 135.00
shares
Totals $3,436,586 $1,186.00
(1) Shares registered are held by current nonaffiliated
shareholders of the Registrant; such shares are being registered
for public resale. (2) Pursuant to Rule 457(c), the registration
fee is based on last sale price of Registrant's common stock
(traded on NASDAQ/NMS) on November 29, 1995. (3) Warrants are held
by placement agent for prior private offering, and by an officer of
former placement agent. (4) The fee for the underlying shares is
based on the warrant exercise price of $4.80, pursuant to Rule
457(g).
<PAGE>
Prospectus Subject to Completion
December _____, 1995
U.S. ENERGY CORP.
893,675 COMMON SHARES
__________________________________________
812,432 shares of common stock (the "Placement Shares") are offered
for sale by shareholders ("Selling Shareholders") of U.S. Energy
Corp. ("USE", the "Company" or "Registrant"), a Wyoming
corporation. The Selling Shareholders purchased the Placement
Shares from USE in July 1995. The Placement Shares have been
registered for sale to the public by the Selling Shareholders, by
the filing of the Registration Statement (of which this Prospectus
is a part) with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933, as amended ("1933
Act").
Warrants to purchase 81,243 shares of common stock, and the 81,243
shares underlying the warrants, are offered for sale by RAF
Financial Corporation and one of its officers (together, "RAF").
RAF was the placement agent for the USE private offering of the
Placement Shares in July 1995, and as compensation therefor,
acquired warrants ("Warrants") to purchase the 81,243 shares of USE
common stock (the "RAF Shares") in connection with such private
offering. The Warrants are exercisable until July 25, 2000, for
$4.80 per share of common stock. By filing this Registration
Statement with the Commission under the 1933 Act, USE has
registered the Warrants, and the underlying RAF Shares, for sale to
the public by RAF. As of November 25, 1995, none of the Warrants
have been exercised. The Placement Shares and the RAF Shares are
hereinafter collectively referred to as the "Common Shares."
Common stock of USE is traded on the NASDAQ/NMS quotation system.
At November 29, 1995, the closing bid price was $3.75 per share.
The Common Shares will be offered by the Selling Shareholders, and
by RAF, at market prices from time to time. RAF may offer the
Warrants from time to time after July 24, 1996. Selling
commissions will be paid by the Selling Shareholders and RAF for
Common Shares and Warrants sold by them. No sales proceeds will be
paid to RAF or to the Company or any affiliate of the Company with
respect to Common Shares sold by the Selling Shareholders. No
sales proceeds will be paid to the Company or any affiliate of the
Company with respect to the RAF Shares. See "Plan of Distribution."
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. The securities
may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective This Prospectus shall
not constitute and offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any State in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
<PAGE>
_______________________________________________
These are Speculative Securities.
Such Securities Involve a High Degree of Risk.
See "Risk Factors."
_______________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION, OR ANY
STATE SECURITIES COMMISSION, PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_____________________________________________________
The date of this Prospectus is December _____, 1995.
_____________________________________________________
No one is authorized to give any information, or make any
representation on behalf of USE, RAF or the Selling Shareholders,
or any of them, if not contained or incorporated by reference in
this Prospectus and if given or made, such information or
representation must not be relied upon as having been authorized by
USE, RAF or any of the Selling Shareholders. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to
purchase, the securities offered hereby, by any person in any
jurisdiction in which such an offer or solicitation is not
authorized or in which the person making such offer or solicitation
is not qualified to do so, or to any person to whom it is unlawful
to make such an offer or solicitation.
Neither delivery of this Prospectus nor sale of the securities
offered hereby, shall create an implication that there has been no
change in the information set forth herein since date of this
Prospectus.
AVAILABLE INFORMATION
USE is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other statements and
information with the Commission. The reports and other documents
so filed can be inspected and copied at the Commission's public
reference room located at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's public reference
facilities at Commission regional offices located at: 7 World Trade
Center, 13th Floor, New York, New York 10048; and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such documents can be obtained at
prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
<PAGE>
This Prospectus does not contain all of the information set forth
in the Registration Statement and its exhibits, covering the Common
Shares offered hereby, certain portions of which have been omitted
pursuant to Commission rules and regulations. Each statement made
in this Prospectus concerning a document filed as an exhibit to the
Registration Statement, is qualified in its entirety by reference
to such exhibit for a complete statement of its provisions. Any
interested party may inspect the Registration Statement (and any
amendments thereto) and its exhibits, without charge, at the public
reference facilities of the Commission at its offices as stated
above.
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference documents not presented
herein or delivered herewith. Documents relating to USE are
available without charge upon request to Secretary, U.S. Energy
Corp., 877 North 8th West, Riverton, Wyoming 82501. Telephone
requests may be directed to Sharon Miller at (307) 856-9271.
The following documents filed with the Commission by USE
(Commission File No. 0-6814) are incorporated herein by reference:
(a) USE Annual Report on Form 10-K for fiscal year ended May 31,
1995; (b) USE Quarterly Report on Form 10-Q for the quarter ended
August 31, 1995; and (c) USE Proxy Statement for Annual Meeting
held on November 29, 1995.
All documents filed by USE under Section 13(a) or 13(b), or Section
14 of the Exchange Act subsequent to date of this Prospectus and
prior to the termination date of the offering shall be deemed to be
incorporated herein by reference and to be a part hereof from the
date of such filing. Any statement contained herein or in a
document all or a portion of which is incorporated by reference, or
deemed to be incorporated herein by reference, shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is, or is deemed to be,
incorporated herein by reference modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed to constitute a part of this Prospectus, except as so
modified or superseded.
SUMMARY OF THE OFFERING
The following summary is not intended to be complete and is
qualified in all respects by the more detailed information included
in the information contained in documents which are incorporated by
reference into this Prospectus. See "Incorporation of Certain
Documents by Reference."
<PAGE>
The Company
U.S. Energy Corp. ("USE", the "Company" or "Registrant") is in the
general minerals business of acquiring, developing, exploring
and/or selling or leasing of mineral properties and, from time to
time, mining and marketing of minerals. USE is now engaged in two
principal mineral sectors: uranium and gold. Interests are held in
other mineral properties (principally molybdenum), but are either
non-operating interests or undeveloped claims. It also carries on
a small oil and gas operation. Other USE business segments are
commercial operations (real estate and general aviation),
manufacturing and marketing of professional and recreational
outdoor products, and construction operations.
Most USE operations are conducted through a joint venture with
Crested Corp. a majority-owned Colorado corporation ("Crested"),and
various joint subsidiaries of USE and Crested. The joint venture
with Crested is hereafter referred to as "USECC." Construction
operations are carried on primarily through USE's subsidiary Four
Nines Gold, Inc. ("FNG"). Manufacturing and/or marketing of
professional and recreational outdoor products is conducted through
The Brunton Company ("Brunton"), a wholly-owned USE subsidiary.
USE and Crested also own oil and gas operations in Montana and
Wyoming, which are carried on through Energx, Ltd., a subsidiary of
the Company and Crested.
USE and Crested originally were independent companies, with two
common affiliates (John L. Larsen and Max T. Evans). In 1980, USE
and Crested formed a joint venture to do business together (unless
one or the other elected not to pursue an individual project). As
a result of USE funding certain of Crested's obligations from time
to time (due to Crested's lack of cash on hand), and later payment
of the debts by Crested issuing common stock to USE, Crested became
a majority owned subsidiary of USE in fiscal 1993.
USE was incorporated in Wyoming in 1966. All operations are in the
United States. Principal executive offices are located at 877
North 8th Street West, Riverton, Wyoming 82501, telephone (307)
856-9271.
Except for approximately 1,400 ounces of gold recovered in fiscal
1992 in a bulk sampling program at the Sutter gold property in
California, USE has not received revenues from the mining of either
uranium or gold during its five fiscal years ended May 31, 1995.
Mineral revenues have been received from sales of mineral
properties, advance royalties in respect of the Company's
molybdenum property, and from sales of uranium under certain of the
utility supply contracts held by Sheep Mountain Partners ("SMP", a
partnership), by USE and Crested delivering their one-half share of
uranium and receiving sales proceeds therefrom. In the future,
such uranium contract revenues will be affected by the outcome of
the SMP litigation (see "Risk Factor 2 - Litigation/Arbitration -
Sheep Mountain Partners") because gross revenues from future
performance of all the SMP contracts will flow to the prevailing
parties (USE and Crested, or CRIC and its parent Nukem). However,
regardless of the outcome of such proceedings, commencement of
uranium mining at Green Mountain, Wyoming and/or Ticaboo, Utah may
result in utility supply contracts for Green Mountain Mining
Venture (of which USE and Crested are joint venture partners with
Kennecott Uranium Company), and/or Plateau Resources Limited
("Plateau"), a subsidiary of USE. There is no assurance such
mining operations will commence, or that new utility supply
contracts will result.
For the fiscal year ended May 31, 1995, USE commercial,
recreational product sales and construction operations provided 77%
of net revenues to USE. For a discussion of why revenues from
mineral sales decreased in this period, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations for Fiscal 1995 Compared to
Fiscal 1994, in Registrant's Form 10-K, for fiscal year ended May
31, 1995 ("1995 Form 10-K")."
Risk Factors
An investment in the Common Shares of USE involves substantial
risks, including the risks of failure to obtain necessary capital
to put principal properties into production, continued low uranium
prices, litigation and competition. See "RISK FACTORS."
The Offering
Securities Offered (1). . . . . . . . . . 893,675 Common Shares(2)
Common Shares Outstanding
Before and After Offering . . . . . . . 6,424,708 Shares(3)
NASDAQ/NMS Symbol . . . . . . . . . . . "USEG"
________________
(1) See "Description of Securities." (2) 812,432 Common Shares
are offered for sale by the Selling Shareholders; 81,243 Common
Shares underlying the Warrants may be offered for sale by RAF upon
or following exercise of the Warrants (exercise price $4.80 per
share), and 81,243 Warrants held by RAF which may not be sold prior
to July 25, 1996. See "Plan of Distribution." (3) Assumes the
81,243 Warrants are exercised by RAF. No Warrants have been
exercised at November 25, 1995.
SELLING SECURITY HOLDERS
Neither RAF, its officer who holds Warrants, nor any Selling
Shareholder (i) has held any position, office or material
relationship with the Company or any of its affiliates within the
past three years, or (ii) to the knowledge of the Company, owns one
percent or more of the Company's outstanding Common Shares. It is
anticipated each seller will own none of the securities of the
Company after completion of the offering.
<PAGE>
No. of Common Number of
Shares Owned Shares Owned by
Name Prior to Offering Selling Shareholder
Robert Abelman 5,000 5,000
Michael J. Alfano 7,500 7,500
Amantea Restaurant 10,000 10,000
Michael R. Andriani 5,000 5,000
Dennis C. Artzer 5,000 5,000
Robert Eugene &
Deidre M. Barnett 2,500 2,500
Jerald W. Blosfeld 5,000 5,000
Samuel D. Boney 5,000 5,000
Shirley D. Branch 10,000 10,000
John R. Carvell 5,000 5,000
Phyllis M. Chancy 2,500 2,500
Robert Coker 5,000 5,000
Consulting on Gov't Trust 20,000 20,000
Cotton-O'Neil
Profit Trust 15,000 15,000
Cotton-O'Neil Trust
for Howard N. Ward 10,000 10,000
J. L. Courembis 5,000 5,000
Robert Croonquist 10,000 10,000
Eleanor Crosswait 55,982 55,982
M. M. DeCourcey 5,000 5,000
Diaman Assocs. Ltd.
Inc. Pension Plan 10,000 10,000
Equity L.P. 34,000 34,000
Stephen A. &
Diane Folio 2,500 2,500
Dennis Ford 2,500 2,500
F. L. Fowler, Jr. 5,000 5,000
Cecil Franseen 5,000 5,000
Fundamental Growth
Partners, Ltd. 25,000 25,000
Cary B. Gilman 5,000 5,000
GMJ Family Trust 3,700 3,700
Kennith L. Goddard 5,000 5,000
William B. Goodwin 10,000 10,000
N. Gottenberg 2,500 2,500
Ronald P. Green 5,000 5,000
Jeffrey M. Groh 1,500 1,500
F. E. Grundeman 2,500 2,500
Fred M. Harris 25,000 25,000
Hedge Fund
Partners, Ltd. 25,000 25,000
R. L. Johnson, Jr. 5,000 5,000
J. F. Kenefick 25,000 25,000
Floyd L. Kittrell 5,000 5,000
Komatz Joint Acct. 5,000 5,000
Jack D. Koser 5,000 5,000
R. T. Kruger
Profit Plan 5,000 5,000
Joseph Lazzara 5,000 5,000
Forrest Walton Lee 3,000 3,000
F. Walton Lee, Jr. 5,000 5,000
Donald J. Lippert 1,500 1,500
M. W. Longman 2,000 2,000
M. A. Lowenstein 5,000 5,000
James. H. Lutz 2,500 2,500
John M. Madfis 5,000 5,000
John F. & Paula J.
Mahaney 1,250 1,250
Ramon & Bridget
Martin-Busutil 13,000 13,000
Wm I. & Barbara T.
McClanahan 5,000 5,000
Merwin Assoc. L.P. 14,000 14,000
John L. Moran 10,000 10,000
T. Nakamura 60,000 60,000
C. E. Nightengale 10,000 10,000
C. E. & B. Jeanne
Nightengale 5,000 5,000
A. L. Park 5,000 5,000
Samuel Peak 1,250 1,250
Vannette F. Poole 10,000 10,000
Robert C. Pyle 1,250 1,250
Stephen A. &
Lynden L. Rader 5,000 5,000
Tony L. Rampey 5,000 5,000
Richard &
Sidney Rasure 3,500 3,500
Rand Redfern 5,000 5,000
Ralph M. Reitan 75,000 75,000
Harvey D. Rhoads 1,250 1,250
R. J. & Maryanne
Ruggiero 1,250 1,250
Wm. B. Saeger 5,000 5,000
George Sauble 1,250 1,250
E. P. Schumacher 5,000 5,000
J. R. Serafini 5,000 5,000
J. R. Serafini, Jr. 5,000 5,000
Patrick J. &
Nellie E. Sharkitt 5,000 5,000
A. J. Schelich Trust 5,000 5,000
Fred Simmons 5,000 5,000
Barry Slosberg 15,000 15,000
Larry B. Smith 5,000 5,000
Charles D. &
Bonnie Belle Snow 5,000 5,000
Robt. W. Streett 10,000 10,000
Garner R. Stroud 3,750 3,750
William R. Teele 5,000 5,000
J. David Thompson 1,500 1,500
United Sovereign
Trust Co. Ltd. 10,000 10,000
John F. & Paula J.
Mary F. Virden 5,000 5,000
James F. &
Kathryn J. Wagner 2,500 2,500
Luther M. Wikle 5,000 5,000
M. G. Williams, Jr. 5,000 5,000
James M. Wilson 5,000 5,000
Deborah Wolfson 25,000 25,000
Takuwa Yamamoto 5,000 5,000
812,432 812,432
No. of
Warrants Owned No. of
Name Prior to Offering Warrants Offered
RAF Financial Corporation 40,922 40,922
Robert Long 40,921 40,921
Plan of Distribution
The Common Shares will be offered from time to time by the Selling
Shareholders and RAF (i) in transactions in the over-the-counter
market, automated inter-dealer system on which the Common Shares
are then listed in negotiated transactions or a combination of such
methods of sale, and (ii) at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, or at
negotiated prices. The Selling Shareholders and RAF may effect
such transactions directly with the broker-dealers. Such broker-
dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the
purchasers of the Common Shares for whom such broker-dealers may
act as agents or to whom they sell as principals, or both (which
compensation as to a particular broker-dealer might be in excess of
customary commissions). Sales of the Common Shares and Warrants
may be made pursuant to this Prospectus or pursuant to Rule 144
adopted under the 1933 Act. No underwriting arrangements exist as
of the date of this Prospectus. Upon being advised of any
underwriting arrangements that may be entered into by the Selling
Shareholders or RAF after the date of this Prospectus, the Company
will prepare a supplement to this Prospectus to disclose the name
of such underwriters and such arrangements. Expense of any sales
pursuant to this Prospectus will be borne by the parties as they
may agree. See "Selling Shareholders."
RAF and its officer are not permitted by the terms of the Warrants
issued by the Company to sell or transfer the Warrants prior to
July 25, 1996. They are permitted, however, to exercise the
Warrants and sell the underlying Common Shares prior to July 25,
1996.
The Company is paying certain of the expenses, which are estimated
at $14,500, of registering the Selling Shareholders' Common Shares
under the 1933 Act consisting of all costs incurred in connection
with the preparation of the registration statement (except for any
fees of counsel for the Selling Shareholders or RAF). The Selling
Shareholders and RAF will pay or assume brokerage commissions, or
underwriting discounts, incurred in the sale of the Common Shares,
which commissions or discounts are not being paid or assumed by the
Company.
<TABLE>
Selected Financial Data
<CAPTION>
May 31,
--------------------------------------------------------
1994 1993 1992 1991
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets $ 3,866,600 $ 1,650,300 $ 3,260,500 $ 7,302,300
Current liabilities 1,291,700 1,592,100 681,900 816,000
Working capital 2,574,900 58,200 2,578,600 6,486,300
Total assets 33,090,300 24,037,200 24,583,000 20,500,100
Long-term
obligations(1) 16,612,500 2,900,000 4,540,400 3,244,100
Shareholders' equity 12,559,100 15,063,200 14,982,900 15,045,500
</TABLE>
<TABLE>
<CAPTION>
August 31,1995
May 31, 1995 (unaudited)
------------ --------------
<S> <C> <C>
Current assets $ 4,058,000 $ 4,260,300
Current liabilities 4,036,000 1,492,500
Working capital 22,000 2,767,800
Total assets 34,165,000 34,506,100
Long-term
obligations(1)(2) 15,882,300 16,056,300
Shareholders' equity 12,168,400 14,988,200
</TABLE>
(1)Includes $3,951,800, $3,951,800, $1,695,600, $1,695,600, and $725,900
of reclamation liabilities, and additional amounts of other accrued
liabilities, on uranium properties at May 31, 1995, 1994, 1993, 1992,
and 1991, respectively. See Notes F and K to the Consolidated Financial
Statements contained in Registrant's 1995 Form 10-K.
(2) See Notes 4 and 5 to the unaudited Condensed Consolidated Financial
Statements contained in Registrant's Form 10-Q for fiscal quarter ended
August 31, 1995.
<PAGE>
<TABLE>
<CAPTION>
For Years Ended May 31,
-----------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues $ 9,148,000 $ 8,776,300 $ 9,045,500 $ 6,353,600 $ 9,569,100
Income (loss) before
equity in income
(loss) of affiliates,
provision for
income taxes and
extraordinary item (2,281,500) (3,587,900) (103,100) 819,200 6,082,900
Equity in (loss) of
affiliates (442,300) (390,700) (444,700) (324,900) (96,100)
Net income (loss) (2,070,600) (3,370,800) (221,900) 613,200 6,164,900
Income (loss) per
share before
extraordinary item $ (.42) $ (.70) $ (.05) $ .09 $ .93
Extraordinary item -- -- -- .06 .62
Income (loss) per
share before
cumulative effect
of accounting change (.42) (.70) (.05) .15 1.55
Cumulative effect at
June 1, 1993 of income
tax accounting change -- (.06) -- -- --
Net income (loss)
per share $ (.42) $ (.76) $ (.05) $ .15 $ 1.55
Cash dividends
per share $ -0- $ -0- $ -0- $ -0- $ -0-
</TABLE>
<TABLE>
<CAPTION>
For Three Months Ended August 31,
-------------------------------------
1995 1994
(Unaudited) (Unaudited)
------------- ------------
<S> <C> <C>
Revenues $ 5,665,300 $ 2,652,000
Income (loss) before
equity in
loss of affiliates
and provision for
income taxes 88,800 (496,000)
Equity in loss
of affiliates (75,600) (96,400)
Net loss (22,400) (453,200)
Net loss per share * (.09)
Cash dividends per share -0- -0-
* Less than $.01 per share.
</TABLE>
<PAGE>
RISK FACTORS
Prospective investors should note that the business of USE is
subject to certain risks, including the following:
1. Working Capital Requirements. Cash requirements of USE for
fiscal 1996 are the funding of on-going general and administrative
expenses, including legal costs incurred as a result of the SMP
proceedings described in risk factor 2 below; mine development and
holding costs of the Sutter gold property described below; Plateau
mill holding (standby) costs; SMP mines standby costs; and costs to
acquire uranium oxide which USE may be obligated to deliver under
the SMP contracts.
If additional amounts of working capital are not received, USE and
Crested will need to either sell equity or interests in various
assets to raise the necessary funds to sustain operations. Monthly
operating expense to hold properties and fund general and
administrative expense is estimated at $300,000 to $350,000 for the
last three quarters of fiscal 1996, of which approximately $150,000
is expected to be provided from current commercial and construction
operations. These estimates reflect elimination of most legal
expenses associated with the SMP proceedings, because a decision is
expected from the arbitration panel in March 1996 (see "Material
Changes"). Conventional lending sources and possible equity sales
are expected to be sufficient to cover the operating deficits
(estimated at $1,800,000 for property holding and general and
administrative expense). However, significant funding in excess of
such sources will be required to put the principal mineral
properties into production (Plateau's uranium mines and mill and
the Sutter gold property).
Continued operating losses without offsetting replacements of
working capital will adversely affect USE's ability to continue to
operate its business as described in this Prospectus. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Registrant's 1995 Form 10-K, and
Registrant's Form 10-Q for fiscal quarter ended August 31, 1995 for
information on future working capital requirements and capital
resources.
2. Litigation/Arbitration - Sheep Mountain Partners. Because of
USE and Crested litigation/arbitration against Nukem/CRIC, their
partner in the Sheep Mountain Partners Partnership ("SMP"), USE and
Crested have been required to fund $4,521,600 in standby mine
maintenance and related costs of the SMP mines from June 1991
through May 31, 1995. Another $147,800 was spent on such costs in
the three months ended August 31, 1995. USE and Crested are
seeking to recover these amounts from Nukem and its wholly owned
subsidiary, Cycle Resource Investment Corporation ("CRIC"), along
with accrued interest of approximately $999,000 through May 31,
1995, for a total of $5,520,600 at May 31, 1995.
<PAGE>
Recovery by USE and Crested of their funds advanced to the SMP
partnership will depend on the outcome of the litigation/
arbitration, which presently is uncertain. See Item 3 - "Legal
Proceedings - Sheep Mountain Partners Arbitration/Litigation" in
Registrant's 1995 Form 10-K, and the audited USE Consolidated
Financial Statements contained in Registrant's 1995 Form 10-K and
"Legal Proceedings" in USE's Form 10-Q for the quarter ended August
31, 1995.
On July 3, 1991, USE and Crested ("plaintiffs") filed a complaint
in the United States District Court for the District of Colorado
against CRIC, Nukem and various affiliates of CRIC and Nukem
(together, the "defendants"), alleging that CRIC and Nukem
misrepresented material facts to and concealed material information
from the plaintiffs to induce their entry into the SMP Partnership
Agreement and various related agreements. Plaintiffs also claim
CRIC and Nukem have wrongfully pursued a plan to obtain ownership
of the USE-Crested interests in SMP through various means,
including overcharging SMP for uranium "sold" to SMP by defendants.
Plaintiffs further allege that defendants refused to provide a
complete accounting with respect to dealings in uranium with and on
behalf of SMP, and that certain defendants misappropriated SMP
property and engaged in other wrongful acts relating to the
acquisition of uranium by SMP.
Plaintiffs requested that the court order rescission of the SMP
Agreement and related contracts, and asked the court to determine
the amounts payable to CRIC by USECC as a result of any such
rescission order to place the parties in status quo. USE and
Crested also requested that the court order defendants to make a
complete accounting to them concerning the matters alleged in the
amended complaint. They requested an award of damages (including
punitive, exemplary and treble damages, interest, costs and
attorneys' fees) in an amount to be determined at trial.
Plaintiffs further requested imposition of a constructive trust on
all property of SMP held by defendants and on profits wrongfully
realized by defendants on transactions with SMP.
The defendants filed various motions, an answer and counterclaims
against plaintiffs, claiming plaintiffs misappropriated a
partnership opportunity by being involved with Kennecott on the
Green Mountain uranium properties. Defendants also requested
damages (including punitive, exemplary and treble damages, interest
costs and attorney fees).
The plaintiffs and defendant agreed to proceed with exclusive,
binding arbitration before a panel of three arbitrators with
respect to any and all post-December 21, 1988 disputes, claims and
controversies, that any party may assert against the other. All
pre-December 21, 1988 claims, disputes and controversies pending
before the U.S. District Court have been stayed by stipulation
between the parties, until the arbitrators enter an order and award
in the arbitration proceedings.
An unfavorable outcome to the litigation and/or arbitration could
result in loss of the funds advanced for standby maintenance at the
SMP mines and loss of the utility supply contracts held by SMP. In
addition, Nukem and CRIC are seeking $47 million in damages from
USE and Crested in these proceedings. Although Management of USE
does not expect Nukem and CRIC to prevail in such proceedings and,
in fact, USE and Crested are seeking approximately $258 million in
damages from Nukem and CRIC (with a request that such amount be
trebled under the Racketeer Influenced and Corrupt Organization
Act), an award of damages against USE and Crested in any
substantial amount could have a material adverse effect on the
ability of USE and Crested to carry on their business in the manner
described in this Prospectus.
3. Sutter Gold - No Current Mining Operations or Gold Production.
As of May 31, 1995, USE and Crested have invested more than
$10,374,400 in capitalized costs to acquire, permit and develop a
gold property in California, held through subsidiary Sutter Gold
Mining Company. This investment represents a significant portion
of USE's consolidated assets. However, there is no assurance
current efforts will be successful in financing the mill
construction and mine development costs needed to put the property
into full production. There presently are no agreements to obtain
such financing. If third-party financing cannot be obtained and/or
USE is unable to fund development and production costs from
internally generated funds over the next two years the property may
be sold for a loss. See Item 1 "Description of Business - Gold -
Lincoln Project (California)" in Registrant's 1995 Form 10-K.
4. Additional Shares to Market. In addition to the Common Shares
sold to the Selling Shareholders (in the first quarter of fiscal
1996), USE sold 400,000 redeemable Common Shares to private
investors in fiscal 1995. Such 400,000 Common Shares were
redeemable in August 1995 by USE paying cash therefor ($3.50 per
share); however, in lieu of cash redemption, USE had the right to
issue one additional Common Share for every three Common Shares
originally purchased. In the second quarter of fiscal 1996, USE
elected to issue an additional 133,336 Common Shares to the holders
of the 400,000 Common Shares, in lieu of paying cash redemptions.
Pursuant to the terms of the private placement offering to the
investors, USE has agreed to register (by February 28, 1996) all
533,336 Common Shares for public resale, by filing with the
Commission a registration statement therefor under the 1933 Act
with the Commission. Public sale of such shares by the investors
may depress market prices for the Company's Common Shares.
In addition the Company intends to register and sell prior to
December 31, 1995, 150,000 Common Shares (held by its wholly owned
subsidiary, The Brunton Company) for its own account.
5. Mineral Industry Risks. Generally, the business of USE is
subject to the risks of the minerals industry, including
unanticipated delay and expense in putting properties into
production, commodity price fluctuations, and variable
environmental compliance costs. In addition, recent legislation
has increased unpatented federal mining claim holding costs. Other
legislation has been proposed which, if enacted, would impose
percentage royalties on production from such lands. Any increase
in the cost of holding, or producing minerals from, federal land
would adversely affect operations on such lands. In addition
mining hazards may cause losses not covered by, or in excess of
coverage provided by, insurance policies. USE maintains policies
which it deems adequate for hazard losses, but there is no
assurance coverage would be adequate in any particular event.
Nearly all the uranium properties held by GMMV, SMP, and Plateau
are unpatented claims, title to which depends on numerous factual
matters including timely annual payments of $100 per claim to the
United States Bureau of Land Management ("BLM")and compliance with
technical requirements to establish a valid mining claim and to
preserve the right to possession of such claims. Although USE
believes the holding entity in each case has good title to all the
unpatented claims for the particular property, there are always
inherent uncertainties in owning unpatented claims which could
result in disputes.
6. Reclamation and Environmental Costs. USE is a joint venturer
in the GMMV, which entity is responsible for mine reclamation,
environmental restoration and decommissioning associated with
mineral properties on Green Mountain, in south central Wyoming, and
the Sweetwater Mill. Future costs to comply with these obligations
are now estimated at approximately $25,000,000. If actual costs
are higher, USE could be adversely impacted. There is no assurance
the properties will generate sufficient revenues to fund
reclamation, restoration and decommissioning costs in excess of
current estimates. See Note K to the audited USE Consolidated
Financial Statements in Registrant's 1995 Form 10-K, and the notes
to the unaudited USE Consolidated Financial Statements in
Registrant's Form 10-Q for fiscal quarter ended August 31, 1995,
for further information. Current bonds and funds in escrow are
deemed adequate for reclamation and decommissioning liabilities
associated with the Shootaring Mill in Utah.
USE and Crested have assumed the reclamation obligations,
environmental liabilities and contingent liabilities for employee
injuries, from mining the Crooks Gap and other properties in the
Sheep and Green Mountain Mining Districts. The reclamation
obligations, which are established by governmental regulators, were
most recently set at $1,451,800, which amount is shown on USE's
balance sheet as a long-term obligation.
To assure the reclamation work will be performed, regulatory
agencies require posting of a bond or other security. USE and
Crested satisfied this requirement with respect to SMP properties
by mortgaging their executive office building and a trailer park
in Riverton, Wyoming. A portion of the funds for the reclamation
of SMP's properties was to have been provided by SMP, which agreed
to pay up to $.50 per pound of uranium produced from its properties
to USE and Crested for reclamation work. The status of this
commitment could be impacted by the ultimate resolution of the
arbitration/litigation with Nukem/CRIC.
The GMMV and Sweetwater Mill reclamation liabilities are self
bonded by Kennecott, and accordingly are not recorded in the USE or
Crested financial statements. The SMP and Plateau reclamation
liabilities were recorded at $1,451,800 and $2,500,000 respectively
(total $3,951,00) in the audited USE Consolidated Financial
Statements. See the USE 1995 Form 10-K. A cash bond of
approximately $40,000 is posted for miscellaneous reclamation costs
at the Sutter gold property (carried under "Other Assets-Deposits
and Other" on the USE financial statements). Reclamation and
environmental obligations for the oil and gas properties held by
USE are deemed insignificant and manageable in the ordinary course
of business.
7. Possible Losses on Uranium Contracts. As of May 31, 1995, SMP
held contracts for delivery of an estimated 5.5 million pounds of
U3O8 to domestic utilities from 1996 through 2000. Actual
quantities of U3O8 purchased by utilities over that period of time
may vary by 10 to 25 percent, as provided in the contracts (see
Item 1 "Description of Business - Uranium - Sheep Mountain Partners
- - SMP Marketing" in Registrant's 1995 Form 10-K), and profit or
loss to SMP on the deliveries will depend on the cost of inventory.
Profits on such future deliveries cannot be predicted. Management
of the Company does not anticipate any material losses from the
sales of U3O8 pursuant to these contracts. As of the date of this
Prospectus, all contract prices exceed the current market price,
however, there is no assurance this situation will not change in
the future.
Increases in the spot market would increase USE's cost of
delivering on certain of the SMP contracts, thus reducing profits,
while spot market decreases would increase profits on such
contracts. USE recorded a loss of $162,900 in fiscal 1994 on
deliveries of its portion of certain of the SMP contracts, as the
cost of uranium exceeded the contracted price. Due to the SMP
dispute, earlier arrangements between the partners to deliver their
shares of the SMP contracts in spite of the dispute were abandoned,
and USE made no deliveries (and therefore recorded no revenues or
losses) on any SMP contracts during fiscal 1995.
All uranium supply contracts presently are held by SMP. USE could
lose the contracts if the SMP arbitration proceedings are decided
against USE and Crested.
8. Competition. There is keen competition in the domestic
minerals industry, and the oil and gas business, for properties and
capital. USE's competitors include major mining and oil and gas
companies, many of which are larger than USE in all respects. The
location and composition of mineral ore bodies are of great
importance to the competitive position of a mining company.
Producers of high-grade ore with readily extractable minerals are
in an advantageous position. Producers of one mineral may be able
to efficiently recover other minerals as by-products, with
significant competitive impact on primary producers. Substantial
capital costs for equipment and mine-works are often needed. As a
result, owners of producing properties, particularly if purchase
contracts for the production are in place, generally enjoy
substantial competitive advantages over organizations that propose
to develop non-producing properties.
In its other business segments, USE affiliate FNG encounters strong
competition with a number of larger civil engineering construction
firms in the western United States, and Brunton competes with
domestic and foreign sporting and professional equipment
manufacturers, some of which are larger and better capitalized.
9. Uranium Prices and Competition. Uranium market prices in the
United States have declined from as high as $17.00 per pound in
1988 to less than $8.00 per pound in 1992, and recovered to about
$11.80 per pound in November 1995. Further sustained price
increases in the spot market (to $14.00 per pound) are believed to
be required to impel United States utilities to seek long term
price stabilizing uranium supply contracts. There is no assurance
of this upward price movement. USE would be adversely affected if
the United States utilities with nuclear power plants do not seek
long term uranium supply contracts in the 1990s. See Item 1
"Description of Business - Uranium - Uranium Market Information" in
Registrant's 1995 Form 10-K. Although the extent of such adverse
impact cannot be predicted, if uranium prices remained so depressed
through the 1990s that USE's properties and facilities were not put
into operation, the book value of such assets might decrease and
USE could be required to reclaim or restore such properties.
USE believes that if and when market prices improve, it will be
able to compete with other uranium producers, primarily because it
holds significant uranium resources in place, along with the
necessary mining and milling facilities. Applications have been
submitted to upgrade the mill facilities' licenses to operating
levels, however, delays in final permitting may be encountered, as
the uranium refining industry is closely regulated by the U. S.
Nuclear Regulatory Commission.
Nonetheless, USE expects competition from other producers in
Canada, Australia and Africa (where uranium is a byproduct of other
mineral recovery processes), from the de-enrichment of highly
enriched uranium recovered from the dismantlement of U.S. nuclear
weapons, and from imports to the United States of uranium from the
Commonwealth of Independent States (formerly the Soviet Union).
See Item 1 "Description of Business - Uranium - Uranium Market
Information" and "NUEXCO Exchange Value" in Registrant's 1995 Form
10-K.
10. Variable Revenues and Recent Losses. Due to the nature of USE
business, there are from time to time major increases in gross
revenues from sale of mineral properties. During fiscal 1991,
$7,193,600 was recognized from sale of a partial interest in a
uranium property to Kennecott Uranium Company (a GMMV partner). No
such revenues were recognized from fiscal 1992 through fiscal 1995.
Further, USE realized a net gain in fiscal 1992 of $613,000, but
net losses were realized from fiscal 1993 through fiscal 1995 (in
the respective amounts of $221,900, $3,370,800 and $2,070,600). In
fiscal 1995, 77% of net revenues were provided by commercial,
recreational product sales and construction operations. Continued
operating losses without offsetting replacements of working capital
will adversely affect USE's ability to continue its operations as
described in this Prospectus. See Risk Factor 1 above.
See "Management's Discussion and Analysis of Financial Condition
and Results of Operations," in Registrant's 1995 Form 10-K for
discussion of such items for the last three fiscal years.
11. Bullfrog Litigation. The Company and Crested, and other third
parties are defendants and crossclaimants in certain litigation in
the District Court of Nye County, Nevada, brought by Bond Gold
Bullfrog Inc. ("BGBI") in July 1991. BGBI is an affiliate of
Barrack Corp., a large international gold producer headquartered in
Toronto, Canada. The litigation primarily concerns extralateral
rights associated with two patented mining claims owned by Parador
Mining Company Inc. ("Parador") and initially leased to a
predecessor of BGBI. USE and Crested assert certain interests in
the claims under an April 1991 assignment and lease with Parador,
which claims are in and adjacent to BGBI's Bullfrog open pit and
underground mine.
Parador, USE and Crested had previously advised BGBI that they are
entitled to royalty payments with respect to extralateral rights of
the subject claims on minerals produced at the Bullfrog Mine,
claiming that the lode or vein containing the gold mineralization
apexes on the Parador claims and dips under the claims leased to
BGBI by a third party.
BGBI seeks to quiet title to its leasehold interest in the subject
claims, alleging that Parador's lease thereof to USE and Crested is
adverse to the interest claimed by BGBI, and that the assertions by
USE and Crested of an interest in the claims have no foundation.
BGBI seeks a determination that USE and Crested have no rights in
the claims, and an order enjoining USE and Crested from asserting
any interest in them. BGBI further asserts that in attempting to
lease an interest in the subject claims to USE and Crested, Parador
breached the provisions of its lease to BGBI, and that Parador is
responsible for the legal fees and costs incurred by BGBI in the
quiet title action, which many be offset against royalties. Under
an arrangement to pay certain legal expenses of Parador, USE and
Crested may be responsible for any such amounts.
BGBI alleges that by entering into the Assignment and Lease of
Mining Claims with Parador, USE and Crested disrupted the
contractual relationship between BGBI and Parador. In addition,
BGBI claims that the USECC-Parador agreement slanders BGBI's title
to the claims. BGBI seeks compensatory damages from Parador, USE,
and Crested; punitive damages from USE and Crested; and costs and
other appropriate relief from Parador, USE and Crested, all in
amounts to be determined.
Trial of the case is scheduled for December 11-14, 1995. USE and
Crested believe that they have rightfully acquired an interest in
extralateral rights concerning the subject claims. Nevertheless,
it is too early to determine a probable outcome of this case. If
USE's and Crested's position concerning extralateral rights is
sustained, substantial additional revenues and income may be
received by USE and Crested from royalties payable with respect to
gold produced from the Bullfrog Mine. If, however, the decision of
the court is adverse to USE and Crested, an award of damages
against USE and Crested in any substantial amount could have a
material adverse effect on the ability of USE and Crested to carry
on their business in the manner described in this Prospectus.
12. Potential Issuance of Preferred Stock. Under the USE Restated
Articles of Incorporation as amended ("Restated Articles") and as
permitted by the Wyoming Business Corporation Act ("WBCA"), the USE
Board of Directors has authority to create series of preferred
stock and to issue shares thereof, without the approval of any USE
shareholders. The creation and issue of USE preferred stock with
dividend rights senior to the USE Common Shares could adversely
affect common stockholder participation in future earnings through
dividends that otherwise would be available for distribution to
holders of the Common Shares.
Such preferred stock also could inhibit a takeover of USE. Under
the WBCA, separate voting approval by classes of stock is required
for certain substantive corporate transactions. If the interests
of preferred stockholders is perceived to be different from those
of the common stockholders, the preferred stockholders could
withhold approval of the transactions needed to effect the
takeover.
13. Potential Anti-Takeover Effects of Staggered Board. The USE
Board of Directors is presently divided into three classes of two
directors each. Pursuant to the USE Restated Articles and as
permitted by the WBCA, the directors in each class serve a three
year term, and only those directors in one class are reelected each
year. This board classification could stall a takeover of USE,
even if a majority of the common stock were to be held by persons
desiring a change in control of the Board. See "Description of
Securities to be Registered."
DESCRIPTION OF SECURITIES TO BE REGISTERED
The securities to be registered pursuant to this Registration
Statement consist of shares of the Company's $.01 par value common
stock, Warrants to Purchase Common Stock ("Warrants"), and the
shares of common stock underlying the Warrants.
Common Stock. The Company's Restated Articles authorize issuance of
20,000,000 shares of common stock, $.01 par value.
Holders of common stock are entitled to receive dividends when and
as declared by the Board of Directors out of funds legally
available therefor.
Holders of common stock are entitled to one vote per share on all
matters upon which such holders are entitled to vote, and further
have the right to cumulate their votes in elections of directors to
the Company's Board of Directors. Cumulation is effected by
multiplication of shares held by the number of director nominees,
and voting is by casting the product as desired among the nominees;
directors are elected by a plurality of votes cast. Pursuant to
the Company's Restated Articles and the Wyoming Management
Stability Act, shares of common stock held by Crested may be voted
by Crested in elections of USE directors, so long as USE conducts
substantial business in Wyoming and is "qualified" under such Act
as having assets in excess of $10,000,000, with a class of stock
listed on NASDAQ or on a principal exchange.
In the event of dissolution, liquidation or winding up of USE,
holders of common stock are entitled to share ratably in assets
remaining after creditors (including holders of any preferred
stock, as to liquidation preferences) have been paid.
All outstanding shares of common stock (including the Common Shares
offered for sale by this Prospectus) have been fully paid and are
nonassessable. All shares of common stock issued on exercise of
the Warrants, when paid for as required by the Warrants, will be
issued as fully paid and nonassessable.
Warrants. The Company has issued Warrants which entitle the holder
thereof to purchase a total of 81,243 Common Shares. The Warrants
are currently held by RAF and one of RAF's executive officers
(collectively, "RAF"). RAF is entitled to exercise its Warrants
and sell the underlying Common Shares at any time prior to the
expiration of the Warrants on July 25, 2000, but RAF is not
permitted, by the terms of its Warrants, to sell the Warrants prior
to July 25, 1996. The Warrants are exercisable at a price of $4.80
per share, subject to adjustment of the number of Common Shares and
the price to be paid for a Common Share upon the occurrence of
certain events described in the Warrants. Holders of the Warrants
are not entitled to any rights of a shareholder of the Company.
MATERIAL CHANGES
Update on Sheep Mountain Partners Arbitration
On October 23, 1995 the arbitration panel decided that the issuance
of its Order and Award by December 1995 would not be possible and
concluded that it will need a period of time up to and including
March 1, 1996 before such Award will be issued. The panel reserved
the right to extend that period of time further should it
unanimously decide such further extension is necessary.
Construction - Four Nines Gold, Inc.
The contract awarded to FNG by the City of Lead, South Dakota for
municipal road and drainage construction and rock slide area
stabilization has been increased as a result of change orders by
the City to $3,402,885 as of October 31, 1995. FNG had performed
74 percent of the contract, billing $2,518,728 (including 5 percent
retainage against completion of the project) of which $2,213,122
had been paid as of October 31, 1995. FNG continues to expect the
contract to be profitable.
On September 13, 1995 FNG was awarded a separate construction
contract for $618,270 by the United States Department of the
Interior, Bureau of Reclamation, for the Minor Laterals, North
Canal, Stage 5, Belle Fourche Unit, South Dakota. The work
consists of constructing 3.81 miles of pipeline, approximately 1.4
miles of gravel-surfaced road, removing existing reinforced
concrete hydraulic structures and constructing miscellaneous
concrete structures which include four inlets. Notice to proceed
with the work on this contract was given on September 29, 1995,
with final completion required by May 10, 1996.
EXPERTS
The consolidated financial statements of USE incorporated by
reference in this Prospectus from the Company's 1995 Form 10-K have
been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto,
and are included herein in reliance upon the authority of said firm
as experts in giving said reports. Reference is made to said
report which includes an explanatory paragraph that describes the
litigation discussed in Notes E and K to such Consolidated
Financial Statements.
LEGAL MATTERS
Stephen E. Rounds, Denver, Colorado, has acted as special counsel
to USE in connection with this offering.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Legal $ 8,000.00*
Audit 4,000.00*
SEC and state fees 2,500.00*
$ 14,500.00*
* Estimate
Item 15. Indemnification of Directors and Officers.
The Wyoming Business Corporation Act ("WBCA"), W.S. 17-16-850 et
seq., provides for indemnification of the Registrant's officers,
directors, employees, and agents against liabilities which they may
incur in such capacities. A summarization of circumstances in
which such indemnification may be available follows, but is
qualified by reference to Registrant's Restated Articles of
Incorporation and the text of the statute.
In general, any officer, director, employee, or agent may be
indemnified against expenses, fines, settlements, or judgments
arising in connection with a legal proceeding to which such person
is a party, as a result of such relationship, if that person's
actions were in good faith, believed by him or her to be in (or at
least not opposed to) the Registrant's best interests, and in the
case of any criminal proceeding, he or she had no reasonable cause
to believe his or her conduct was unlawful. Unless such person is
successful upon the merits in such an action, indemnification may
be awarded only after a determination by decision of the Board of
Directors (by directors not at the time parties to the proceeding)
or by majority shareholder vote (excluding shares held or
controlled by directors who are at the time parties to the
proceeding), or by opinion of special legal counsel.
The circumstances under which indemnification would be made in
connection with an action brought on behalf of the Registrant are
generally the same as stated above, except that indemnification is
permitted only for reasonable expenses.
In addition, Registrant has statutory authority to purchase
insurance to protect its officers, directors, employees, and agents
against any liabilities asserted against them, or incurred in
connection with their service in such capacities. Further, the
Registrant may advance or reimburse funds to a director who is a
party to a proceeding, for reasonable expenses incurred in
connection with a proceeding.
Item 16. Exhibits
5.1 and
23.2 Opinion and Consent of Stephen E. Rounds, Esq.*
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants*
* Filed herewith.
Item 17. Undertakings.
The Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registrations Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (ii) do not apply
if the information required to be included in a post-effective
amendment by such paragraphs, is contained in periodic reports
filed by the Registrant pursuant to Section 13 of the Securities
Exchange Act of 1934 that are incorporated by reference into this
Registration Statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement.
(a)(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(a)(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of this offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement, shall be
deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to
directors, officers, and controlling persons of the Registrant, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such officer, director, or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, duly authorized in the City of
Riverton, Wyoming, on November 29, 1995.
U.S. ENERGY CORP.
(Registrant)
Date: November 29, 1995 By: s/ John L. Larsen
JOHN L. LARSEN, President
and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement was signed by the following persons in
the capacities and on the dates stated.
Date: November 29, 1995 By: s/ John L. Larsen
JOHN L. LARSEN, President
and Director
Date: November 30, 1995 By: s/ Max T. Evans
MAX T. EVANS, Director
Date: November 29, 1995 By: s/ Harold F. Herron
HAROLD F. HERRON, Director
Date: November 20, 1995 By: s/ Don C. Anderson
DON C. ANDERSON, Director
Date: November ______, 1995 By: __________________________
DAVID W. BRENMAN, Director
Date: November 28, 1995 By: s/ Nick Bebout
NICK BEBOUT, Director
Date: November 30, 1995 By: s/ Robert Scott Lorimer
ROBERT SCOTT LORIMER,
Principal Financial
Officer and Chief
Accounting Officer
Exhibit 5.1 and 23.2
Stephen E. Rounds
4635 East Eighteenth Ave.
Denver, Colorado 80220
November 25, 1995
U.S. Energy Corp.
877 North 8th West
Riverton, Wyoming 82501
Re: Registration Statement on Form S-3
Gentlemen:
U.S. Energy Corp. ("Company") proposes to file a registration
statement for the offer and sale, to the public, of up to 893,675
shares of common stock, of which 812,432 are held by current
shareholders ("Selling Shareholders") and 81,243 shares underlying
warrants to purchase shares of common stock. The registration
statement also will register the sale of the warrants. The
warrants are held by RAF Financial Corp. and certain officers of
RAF Financial Corp. (hereafter, together referred to as "RAF"). My
opinion is required in connection with such transaction.
Documents Reviewed
I have examined originals, certified copies or other copies
identified to my satisfaction, of the following:
1. Restated Articles of Incorporation, and Amendment to Restated
Articles of Incorporation, of the Company.
2. Bylaws of the Company, as amended.
3. The Company's Annual Report on Form 10-K for fiscal year ended
May 31, 1995 (including the proxy statement for the annual meeting
of the Company shareholders, to be held on November 29, 1995); the
Company's Quarterly Report on Form 10-Q for the three months ended
August 31, 1995 (and the Quarterly Report on Form 10-Q for the
three months ended August 31, 1994); amendments filed to date to
the preceding; and all other reports filed by the Company with the
Commission under Section 13 of the Securities Exchange Act of 1934.
4. All exhibits listed as incorporated by reference in Part II of
the registration statement on Form S-3, prepared by the Company and
filed with this opinion as an exhibit.
5. The Company's registration statement on Form S-3, with which
this opinion is filed as an exhibit.
6. Minutes of the proceedings of the company board of directors
for the last four fiscal years.
<PAGE>
U.S. Energy Corp.
November 25, 1995
Page -2-
7. Warrants to purchase common shares of the Company, issued to
and held by RAF Financial Corp. and certain of its officers
("RAF").
I have also consulted with Company officers and representatives
(including but not limited to its transfer agent), and received
representations and assurances concerning disclosures in the
reports described in paragraph 3 and the registration statement
described in paragraph 5, as I have deemed advisable or necessary
under the circumstances. Although I have not undertaken
independent verification of the matters covered by this paragraph,
I have no reason to believe that the representations and assurances
received are materially inaccurate or false.
Opinion
Subject to compliance with applicable state securities laws, and to
declaration of effectiveness of the Company's Form S-3 registration
statement, and based on my review of the documents listed above, it
is my opinion that the common shares to be offered and sold by the
selling shareholders named in the registration statement, and
(subject to payment therefor in accordance with the terms of the
warrants) by RAF, are duly and validly issued, fully paid and non-
assessable common shares of the company
My opinion assumes that the selling shareholders, and RAF, as
applicable, deliver copies of the definitive prospectus to each
purchaser of the common shares, in compliance with the Securities
Act of 1933, as amended, and applicable rules of the Securities and
Exchange Commission.
Yours Sincerely,
Stephen E. Rounds
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 registration statement
of our report dated August 28, 1995 included in U.S. Energy Corp.'s
Form 10-K for the year ended May 31, 1995, and to all references to
our firm included in this registration statement.
s/ Arthur Andersen LLP
Denver, Colorado,
November 28, 1995.
Exhibit 23.2
CONSENT OF COUNSEL
I hereby consent to the filing of my opinion as an exhibit to the
registration statement on Form S-3. However, I do not admit that I
am in the category of those persons whose consent is required to be
so filed by Section 7(a) of the Securities Act of 1993.
Yours Sincerely,
s/ Stephen E. Rounds
Stephen E. Rounds
