As filed with the Securities and Exchange Commission on April 23, 1999
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------------
COLUMBUS ENERGY CORP.
(Exact Name of Registrant as Specified in Its Charter)
Colorado 84-0891713
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264
(303) 861-5252
---------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-----------------------------------
Harry A. Trueblood, Jr.
1660 Lincoln Street
Suite 2400
Denver, Colorado 80264
(303) 861-5252
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------------
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration
Statement as determined by the selling shareholders.
-----------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Proposed Maximum Proposed Maximum
of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share(1) Price(1) Registration Fee
<S> <C> <C> <C> <C> <C>
Common Stock,
$.20 par value 673,583 Shares $5.8125 $3,915,202 $1,089.00
</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c); based upon the average of the high and low prices of the
Registrant's common stock, as reported by the American Stock Exchange, on
April 20, 1999. The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SHAREHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS DECLARED
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
SUBJECT TO COMPLETION, DATED APRIL 23, 1999
COLUMBUS ENERGY CORP.
673,583 Shares
Common Stock
($.20 Par Value)
This prospectus relates to 673,583 shares of common stock of Columbus
Energy Corp. that may be sold from time to time by the selling shareholders
named in this prospectus.
Columbus Energy Corp. will not receive any of the proceeds from the sales
by the selling shareholders.
The common stock is traded on the American Stock Exchange under the symbol
"EGY." On April __, 1999 the last reported sale price of the common stock
on the American Stock Exchange was $_____ per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS,"
BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
PROSPECTUS DATED ____________, 1999
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. These 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 an 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>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C>
Where You Can Find More Information............................................................2
Risk Factors...................................................................................3
Industry Conditions Impact Our Operating Results.........................................4
Drilling Risks Impact Our Ability to Find Commercially Productive Reservoirs.............4
Reliance on Development of Additional Reserves...........................................4
Operating Hazards and Uninsured Risks....................................................5
Our Competition..........................................................................5
Potential Adverse Impact of Environmental and Other Governmental Regulation .............5
Uncertainty of Estimates of Oil and Gas Reserves and Future Net Revenues ................5
Impact of the Year 2000 Issue on Our Operations .........................................6
Dividends Have Not Been Paid ............................................................7
Forward-Looking Statements ....................................................................7
The Company ...................................................................................7
Selling Shareholders ..........................................................................8
Plan of Distribution .........................................................................10
Description of Capital Stock .................................................................11
Legality .....................................................................................12
Experts .....................................................................................12
</TABLE>
-------------------------------
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have authorized no one to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this document.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our common stock is listed and traded
on the American Stock Exchange. Such reports, proxy statements and other
information can also be inspected and copied at the American Stock Exchange, 86
Trinity Place, New York, New York.
2
<PAGE>
This prospectus, which constitutes a part of a registration statement on
Form S-3 filed by us with the SEC under the Securities Act of 1933, omits
certain of the information set forth in the registration statement. Accordingly,
you should refer to the registration statement and its exhibits for further
information with respect to us and our common stock. Copies of the registration
statement and its exhibits are on file at the offices of the SEC. Furthermore,
statements contained in this prospectus concerning any document filed as an
exhibit are not necessarily complete and, in each instance, we refer you to the
copy of such document filed as an exhibit to the registration statement.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede the information in this
prospectus. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until the selling shareholders sell all of
the shares offered by this prospectus.
- Our Annual Report on Form 10-K for the year ended November 30, 1998; and
- Our Quarterly Report on Form 10-Q for the quarter ended February 28, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Ronald H. Beck
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, CO 80264
(303) 861-5252
RISK FACTORS
BEFORE YOU BUY ANY SHARES OF COMMON STOCK OFFERED BY THIS PROSPECTUS YOU
SHOULD BE AWARE THAT THERE ARE VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW.
YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF THE OTHER
INFORMATION IN THIS PROSPECTUS AND THE DOCUMENTS THAT ARE INCORPORATED BY
REFERENCE, BEFORE YOU DECIDE TO ACQUIRE ANY SHARES.
3
<PAGE>
Industry Conditions Impact Our Operating Results
Our revenues, operating results, cash flow and future rate of growth are
substantially dependent upon prevailing prices for oil and gas. For the fiscal
year ended November 30, 1998, approximately 70% of our revenue was from the sale
of natural gas. Historically, oil and gas prices and markets have been volatile,
and they are likely to continue to be volatile in the future. Prices for oil and
gas are subject to wide fluctuations in response to relatively minor changes in
the supply of and demand for oil and gas, market uncertainty and a variety of
additional factors that are beyond our control, including:
- political conditions in oil producing regions, including the Middle
East;
- domestic and foreign supply of oil and gas;
- the level of consumer demand;
- weather conditions;
- government regulations;
- the price and availability of alternative fuels; and
- overall economic conditions.
In addition, various factors may adversely affect our ability to market our
oil and gas production, including:
- the capacity and availability of oil and gas gathering systems and
pipelines;
- the effect of federal and state regulation of production and
transportation;
- general economic conditions;
- changes in supply due to drilling by other producers;
- the availability of drilling rigs; and
- changes in demand.
Drilling Risks Impact Our Ability to Find Commercially Productive Reservoirs
Our oil and natural gas operations subject us to all of the business risks
typically associated with drilling for oil and natural gas. Recently we have
invested an increased portion of our capital budget in drilling exploratory
wells which have higher risks than development wells. These risks often include
the expenditure of large amounts of money for identification and acquisition of
prospective leasehold acreage with no assurance that oil and natural gas will be
found in commercial quantities when a well is drilled. Even if commercial
quantities are located, we may not be able to economically develop and market
the oil and gas.
Reliance on Development of Additional Reserves
We historically have succeeded in replacing reserves that we produce
through exploitation, development and exploration. We have conducted such
activities on our existing oil and gas properties as well as on newly acquired
properties. However, we may not be able to continue to replace reserves at
acceptable costs. Unless we successfully replace the reserves that we produce,
our reserves will decline, resulting eventually in a decrease in oil and gas
production and lower revenues and cash flows from operations. In addition,
exploitation, development and exploration involve numerous risks, including
geologic uncertainties or other conditions that may result in dry holes, the
failure to produce oil and gas in commercial quantities and the inability to
fully produce discovered reserves.
4
<PAGE>
Operating Hazards and Uninsured Risks
Our oil and gas operations involve numerous operating risks and hazards
typically associated with the exploration, development and production of oil and
gas. These include, among others, fire, explosion, pipe failure, casing
collapse, abnormally pressured formations, environmental hazards such as oil
spills, natural gas leaks, and discharges of toxic gases. Any of these events
could result in loss of human life, significant damage to property,
environmental pollution, impairment of our operations and substantial losses to
us. We and the operators of our properties maintain insurance coverage against
some, but not all, potential losses. Insurance coverage is not always
economically feasible and cannot always be obtained, without significant
exclusions, in amounts sufficient to cover all types of operational risks. The
occurrence of a significant event that is not fully insured could have a
material adverse effect on our financial condition.
Our Competition
The oil and natural gas industry is highly competitive. We compete with
others for property acquisitions and for opportunities jointly to explore or to
develop and produce oil and natural gas. Our competitors include major companies
and other independent energy concerns, including individual operators. Many of
these competitors have substantially greater financial and other resources than
we have.
Potential Adverse Impact of Environmental and Other Governmental Regulation
Our oil and natural gas operations are subject to various regulation and
legislation of the federal and state governments, including environmental laws.
To date, we have not had to expend significant resources in order to satisfy
environmental laws and regulations presently in effect. However, compliance
costs under any new laws and regulations that might be enacted could adversely
affect our business and increase the costs of planning, designing, drilling,
installing, operating and abandoning our oil and gas wells and other facilities.
Additional matters that are, or have been from time to time, subject to
governmental regulation include land tenure, royalties, production rates,
spacing, completion procedures, water injection, unitization, and the maximum
price at which products could be sold.
Uncertainty of Estimates of Oil and Gas Reserves and Future Net Revenues
Our recent annual report on Form 10-K for fiscal year 1998 contained
estimates of our oil and natural gas reserves and the discounted future net
revenues to be realized from those reserves, as prepared by independent
petroleum engineers, for fiscal years 1998, 1997 and 1996.
5
<PAGE>
There are numerous uncertainties inherent in estimating quantities of proved oil
and natural gas reserves, including many factors beyond our control. The
estimates in our Form 10-K utilize assumptions the SEC requires for all public
companies, including us, such as using constant oil and gas prices with no
escalation allowed except as specifically provided for by contract. Such
estimates are inherently imprecise indications of future net revenues. Actual
future production, revenues, taxes, operating expenses, development expenditures
and quantities of recoverable oil and natural gas reserves might vary
substantially from those estimates and assumptions. Any significant variance in
these assumptions could materially affect the estimated quantity and value of
reserves set forth in such estimates. In addition, our reserves might be subject
to revision based upon future production results, future exploitation and
development successes or failures, actual prices received and other
unpredictable factors. If downward revisions in the estimated quantities of
proved reserves occur, it will have the effect of increasing the rates of
depreciation, depletion and amortization on the affected properties, and
decreasing our earnings through higher depreciation, depletion and amortization
expense. The revisions may also be sufficient to trigger impairment losses on
certain properties which would result in a further non-cash charge to earnings.
Impact of the Year 2000 Issue on Our Operations
The year 2000 issue is the result of computer programs being written using
two digits rather than four, or other methods, to define the applicable year.
Computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000 and could result in a system
failure or miscalculations causing disruptions of operations such as a temporary
inability to process transactions, transmit invoices or engage in similar normal
business activities.
We upgraded our major system computer software in 1997 to a new release of
a major software vendor that is compliant with the year 2000. We have started
our review of other less important systems as well as our significant suppliers,
purchasers, and transporters of oil and gas to determine the extent to which we
might still be vulnerable to other failures and what the impact might be on our
operations.
Our interest in wells operated by other companies is not considered to be
as important but our management is attempting to determine if those companies
are ready for the year 2000. Outside services are used for payroll and medical
benefits processing and those companies have provided updates to their software
that is year 2000 compliant. We are also somewhat dependent upon personal
computers as well as certain spreadsheet and word processing software programs
which may not be year 2000 compliant at present. Evaluations will be made to
establish which of those systems are critical and need to be remedied by
September 30, 1999.
We also rely on non-information technology systems, such as office
telephones, facsimile machines, air conditioning, heating and elevators in our
leased office building, which may have embedded technology such as micro
controllers and are generally outside of our control to assess or remedy. These
might adversely impact the our business but in our management's opinion would
not create a material disruption.
As previously disclosed, the major system computer software upgrade
performed in 1997 cost $16,000. Management expects that this represents the
majority of the costs, including replacement of any non-compliant information
technology system, required to meet our goal of being year 2000 ready for
mission-critical systems. We do not believe that any loss of revenue will occur
as a result of the year 2000 problem but regardless of efforts to identify and
remedy such problems, there could be year 2000 related failures that cause some
disruption to our operations or temporary delays in processing of certain data.
We have not established a contingency plan should year 2000 failures occur and
have not determined if we will in fact create a contingency plan.
6
<PAGE>
Dividends Have Not Been Paid
We have not paid and do not presently plan to pay cash dividends on our
common stock. We presently intend to use our available cash to expand our
business.
FORWARD-LOOKING STATEMENTS
Some statements made by us in this prospectus and incorporated by
reference from documents filed with the SEC are "forward-looking statements."
These prospective statements include projections related to:
- production and cash flows;
- number and location of planned wells;
- sources of funds necessary to conduct operations and complete
acquisitions;
- acquisition and development budgets;
- anticipated oil and gas price changes; and
- repurchases of our common stock.
In determining these projections, we have made numerous assumptions,
including assumptions with respect to:
- the quality of our properties;
- our potential for growth;
- the demand for oil and gas;
- sources of liquidity and bank credit availability;
- the impact of regulatory compliance; and
- the impact of changing an oil or gas purchaser.
Risks, uncertainties and other factors may cause actual results to differ
materially from anticipated results expressed or implied by these prospective
statements. The most significant of these risks, uncertainties and other factors
are discussed under "Risk Factors" in this prospectus and in sections of
documents we incorporate by reference, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business and
Properties." You are urged to carefully consider these factors.
THE COMPANY
We are an independent oil and gas company and engage in the production and
sale of crude oil, condensate and natural gas, as well as the acquisition and
development of leaseholds and other interests in oil and gas properties. We also
act as manager and operator of oil and gas properties for ourselves and others.
We also engage in the business of compression, transmission and marketing of
natural gas through our wholly owned subsidiary, Columbus Gas Services, Inc. Our
principal office is located at 1660 Lincoln Street, Suite 2400, Denver, Colorado
80264 and our telephone number is (303) 861-5252.
7
<PAGE>
SELLING SHAREHOLDERS
The selling shareholders, whose names appear in the following table, are
all officers and directors. Each selling shareholder has held the position set
forth below his or her name in the following table for at least the past three
years.
The following table sets forth certain information with respect to the
selling shareholders. None of the selling shareholders has had any position,
office or other material relationship within the past three years with the
Company or any of its predecessors or affiliates, other than as described below.
8
<PAGE>
<TABLE>
<CAPTION>
Percent
of Class
Number of Shares After
Number of Shares to be Owned Upon Completion
Number of Shares Offered in this Completion of of the
Owned, Under Option Offering this Offering Offering (if
Name and Position more than 1%)
===============================================================================================================================
<S> <C> <C> <C> <C>
Harry A. Trueblood, Jr. - Chairman of the 728,637(1) 337,481(1) 391,156 10.1
Board, Executive Officer, and Director
Clarence H. Brown 78,254(2) 75,245(2) 3,009 nil
Executive Vice President and Director
Michael M. Logan 49,701(3) 46,866(3) 2,835 nil
Vice President
Corporate Development
Ronald H. Beck 43,623(4) 40,788(4) 2,835 nil
Vice President
Harold C. Gutjahr 24,405(5) 20,405(5) 4,000 nil
Corporate Secretary
James P. Garrett 60,013(6) 57,750(6) 2,263 nil
Treasurer
J. Samuel Butler 27,908(7) 19,346(7) 8,562 nil
Director
Jerol M. Sonosky 20,430 8,155 12,275 nil
Director
William H. Blount, Jr. 21,331(7) 12,769(7) 8,562 nil
Director
----------------------------------------------------
1,054,302 618,805 435,497
====================================================
</TABLE>
(1) Includes 66,375 shares under stock options, of which 34,375 are exercisable
at $7.0909 per share and 32,000 shares at $7.00 per share.
(2) Includes 67,245 shares under stock options, of which 26,620 are exercisable
at $6.1233 per share, 20,625 at $7.0909 per share and 20,000 at $7.00 per
share.
(3) Includes 43,546 shares under stock options, of which 11,000 are exercisable
at $5.7727 per share, 5,796 at $5.4545 per share, 13,750 at $7.0909 per
share and 13,000 exercisable at $7.00 per share.
(4) Includes 37,750 shares under stock options, of which 11,000 are exercisable
at $5.7727 per share, 13,750 at $7.0909 per share, and 13,000 exercisable at
$7.00 per share.
(5) Includes 16,250 shares under stock options, of which 8,250 are exercisable
at $7.0909 per share and 8,000 exercisable at $7.00 per share.
9
<PAGE>
(6) Includes 48,570 shares under stock options, of which 9,983 are exercisable
at $6.1233 per share, 7,562 at $6.1570 per share, 9,625 at $5.7727 per
share, 11,000 at $7.0909 per share and 10,400 exercisable at $7.00 per
share.
(7) Includes 11,000 shares under stock options, which are exercisable at
$5.3636 per share.
In addition to the shares listed above, an additional 6,000 shares are
being registered. These 6,000 shares will be offered by approximately nine
officers and directors who are deemed affiliates of ours and who may acquire
shares under our 1993 Employee Stock Purchase Plan. Also included are 48,778
shares underlying non-qualifying stock options held by 14 employees which are
exercisable from $6.44 to $7.84 per share. Since none of the shares are
presently outstanding, the names and the amounts of shares they will offer will
be added by a Post-Effective Amendment to this prospectus.
PLAN OF DISTRIBUTION
We are registering the shares offered under this prospectus on behalf of
the selling shareholders. As used herein, "selling shareholders" includes donees
and pledgees selling shares received from the named selling shareholders after
the date of this prospectus. All costs, expenses and fees in connection with the
registration of the shares offered hereby will be borne by us. Brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares will be borne by the selling shareholders. Sales of shares may be
effected by the selling shareholders from time to time in one or more types of
transactions (which may include block transactions) on the American Stock
Exchange, in the over-the-counter market, in negotiated transactions, through
put or call options transactions relating to the shares, through short sales of
shares, or a combination of such methods of sale, at market prices prevailing at
the time of sale or at negotiated prices. Such transactions may or may not
involve brokers or dealers. The selling shareholders have advised us that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares and that no
underwriter or coordinating broker is acting in connection with the proposed
sale of shares by the selling shareholders.
The selling shareholders may effect transactions by selling shares directly
to purchasers or to or through broker-dealers, which may act as agents or
principals. Those broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the selling shareholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (that compensation as to a particular broker-
dealer might be in excess of customary commissions).
The selling shareholders and any broker-dealers that act in connection with
the sale of shares might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, and any commissions received by
those broker-dealers and any profit on the resale of the shares sold by them
while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act of 1933.
Because the selling shareholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, the selling
shareholders will be subject to the prospectus delivery requirements of the
Securities Act of 1933, which may include delivery through the facilities of the
American Stock Exchange pursuant to Rule 153 under the Securities Act of 1933.
We have informed the selling shareholders that the anti-manipulative provisions
of Regulation M promulgated under the Securities Exchange Act of 1934 may apply
to their sales in the market.
10
<PAGE>
The selling shareholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided they meet the criteria and conform to the requirements of
Rule 144.
Upon notification to us by any selling shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act of 1933. That supplement will disclose
- the name of each such selling shareholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which such shares were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
- other facts material to the transaction.
In addition, upon notification to us by the selling shareholders that a donee or
pledgee intends to sell more than 500 shares, a supplement to this prospectus
will be filed.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue 20,000,000 shares of common stock $.20 par value
per share, and up to 5,000,000 shares of preferred stock, no par value. The
following summary of certain provisions of our Amended and Restated Articles of
Incorporation and Bylaws does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all provisions of our Amended and
Restated Articles of Incorporation and Bylaws. Copies of our Amended and
Restated Articles of Incorporation and Bylaws are filed as exhibits to this
registration statement.
Common Stock
Each share of our common stock has one vote. Subject to the preferential
rights of holders of any then outstanding preferred stock, the holders of common
stock are entitled to receive dividends when and as declared by the Board of
Directors out of funds legally available for dividends. Holders of common stock
have no preemptive rights to purchase additional shares. If we liquidate,
dissolve or wind up our business, the holders of common stock will share equally
and ratably in the assets available for distribution after payment of all
liabilities, subject to any prior rights of any holders of preferred stock that
at the time may be outstanding.
11
<PAGE>
Holders of common stock have no right to cumulate their votes in the
election of directors. Our Amended and Restated Articles of Incorporation also
divides the Board of Directors into two classes of approximately equal size,
with one class to be elected for a two-year term at each annual meeting of
shareholders.
Preferred Stock
As of the date of this prospectus, there were no shares of preferred stock
outstanding. Preferred stock may be issued from time to time in one or more
series, and our Board of Directors, without further approval of the
shareholders, is authorized to fix preferences and relative, participating,
optional or other special rights, qualifications, limitations or restrictions of
any preferred stock. All shares of any one series of the preferred stock are
required to be identical in every particular and all series are required to rank
equally and be identical in all respects, except insofar as they may vary with
respect to matters which the Board is expressly authorized by our Amended and
Restated Articles of Incorporation to determine in the resolution or resolutions
providing for the issue of any series of the preferred stock. The terms of any
series of preferred stock may materially limit or qualify the rights of the
holders of our common stock.
LEGALITY
Sherman & Howard L.L.C., 633 17th St., Suite 3000, Denver, Colorado 80202
has issued an opinion regarding the validity of the shares offered by this
prospectus.
EXPERTS
Our consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the fiscal year ended November
30, 1998, have been audited by PricewaterhouseCoopers LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said report.
The report by Reed W. Ferrill & Associates, Inc., independent petroleum
engineers and consultants, of our reserves and a separate report on the reserves
of the properties located in the Berry Cox field in Texas prepared by Huddleston
& Co., Inc., another outside consulting firm, included in our Form 10-K for the
fiscal year 1998 are incorporated by reference in this prospectus and have been
incorporated herein in reliance upon the authority of such firms as experts in
petroleum engineering.
-------------------------
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the issuance and distribution of
the securities being registered are as follows:
Commission Registration Fee............................ $1,123
Legal Fees and Expenses................................ 3,000
Accounting Fees and Expenses........................... 2,000
Transfer Agent Fees.................................... 200
Mailing and Miscellaneous.............................. 1,000
------
Total $7,323
======
Item 15. Indemnification of Directors and Officers
Section 7-109-102 of the Colorado Business Corporation Act (the "Act")
provides generally that a corporation may indemnify a person made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether formal or informal (a
"Proceeding"), because the person is or was a director of the corporation or an
individual who, while serving as a director of the corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or fiduciary or agent of another corporation or other entity or of any
employee benefit plan (a "Director"), against any obligation incurred with
respect to a Proceeding to pay a judgment, settlement, penalty, fine (including
an excise tax assessed with respect to an employee benefit plan) or reasonable
expenses incurred in the Proceeding if he conducted himself in good faith and he
reasonably believed, in the case of conduct in an official capacity with the
corporation, his conduct was in the corporation's best interests and, in all
other cases, his conduct was at least not opposed to the corporation's best
interest and, with respect to any criminal proceedings, he had no reasonable
cause to believe that his conduct was unlawful; provided, however, a corporation
may not indemnify a Director in connection with any Proceeding by or in the
right of the corporation in which the Director was adjudged liable to the
corporation or, in connection with any other Proceeding charging the Director
derived an improper personal benefit, whether or not involving actions in an
official capacity, in which Proceeding the Director was judged liable on the
basis that he derived an improper personal benefit. Any indemnification
permitted in connection with a Proceeding by or in the right of the corporation
is limited to reasonable expenses incurred in connection with such Proceeding.
Under Section 7-109-107 of the Act, unless otherwise provided in the Articles of
Incorporation, a corporation may indemnify an officer, employee, fiduciary, or
agent of the corporation to the same extent as to a Director and may indemnify
an officer, employee, fiduciary, or agent who is not a Director to a greater
extent, if not inconsistent with public policy and if provided for by its
bylaws, general or specific action of its board of directors or shareholders, or
contract.
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Section 7-108-402 of the Act provides, generally, that the Articles of
Incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as a director; except that any such
provision may not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) acts specified in Section 7-108-403, or
(iv) any transaction from which a director directly or indirectly derived an
improper personal benefit. Such provision may eliminate or limit the liability
of a director for any act or omission occurring prior to the date on which such
provision becomes effective.
Article VI of the Company's Amended and Restated Articles of Incorporation
(the "Articles"), provides as follows:
1. A director of the Corporation shall not be personally liable to
the Corporation or its shareholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's loyalty to the Corporation or
its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) under Section 7-5-114 of the Colorado Corporation
Code, or (iv) for any transaction from which the director derived
any improper personal benefit. If the Colorado Corporation Code
is amended after approval by the shareholders of this article to
authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Colorado Corporation Code, as amended.
Any repeal or modification of the foregoing paragraph by the
shareholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at
the time of such repeal or modification.
2. A. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise
involved any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director, officer,
employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized by the Colorado Corporation Code, as the same
exists or may hereafter be amended (but, in the case of any such
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<PAGE>
amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such
law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement), reasonably incurred or
suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased
to be a director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs or personal representative;
provided, however, that except as provided in subparagraph B.
hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this
paragraph shall be a contract right.
B. Right of Indemnitee to Bring Suit. If a claim under
subparagraph A of this paragraph is not paid in full by the
Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period
shall be twenty days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit
or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder
(but not in a suit brought by the indemnitee to enforce a right
to an advancement of expenses) it shall be a defense that the
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<PAGE>
indemnitee has not met the applicable standard of conduct set
forth in the Colorado Corporation Code, and (ii) any suit by the
Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the
indemnitee has not met the applicable standard of conduct set
forth in the Colorado Corporation Code. Neither the failure of
the Corporation (including its Board of Directors, independent
legal counsel, or its shareholders) to have made a determination
prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth
in the Colorado Corporation Code, nor an actual determination by
the Corporation (including its Board of Directors, independent
legal counsel, or its shareholders) that the indemnitee has not
met such applicable standard of conduct, shall create a
presumption that the indemnitee has not met the applicable
standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified or to such advancement of expenses
under this paragraph or otherwise shall be on the Corporation.
C. Non-Exclusivity of Rights. The rights to indemnification and
to the advancement of expenses conferred in this paragraph shall
not be exclusive of any other right which any person may have or
hereafter acquire under any statute, this Certificate of
Incorporation, by-law, agreement, vote of shareholders or
disinterested directors and does not restrict the Corporation's
right to limit the personal liability of a director to the
Corporation or to its shareholders for monetary damages for
breach of fiduciary duty as a director, or any other acts which
are consistent with the provisions of the Colorado Corporation
Code as the same exists or may hereafter be amended.
The Company has entered into indemnification agreements with each person
who is a director of the Company (each director, an "indemnitee"). The
indemnification agreements provide for indemnification against any and all
damages, judgments, settlements and costs, costs of investigation and costs of
defense of legal actions, claims, or proceedings and appeals therefrom and costs
of attachment or similar bonds which indemnitee becomes legally obligated to pay
because of any claim or claims made against indemnitee because of any act or
omission or neglect or breach of duty, including any actual or alleged error
misstatement or misleading statement, which he commits or suffers while acting
in his capacity as a director of the Company or of certain subsidiaries of the
Company and solely because of his being a director; and for the advancement or
reimbursement of reasonable expenses (including attorneys' fees) if the
indemnitee furnishes the Company a written affirmation of his good faith belief
he has met the standard of conduct permitting indemnification under applicable
law, the director furnishes the Company a written undertaking to repay the
advance if it is determined he did not meet such standard of conduct, and the
Company determines that the facts then known to those making the determination
will not preclude indemnification under Colorado law provided that the Company
shall not have determined that the director would not be permitted to be so
indemnified under applicable law.
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<PAGE>
In addition, the indemnification agreement provides that if the Company
determines that the director is not permitted to be indemnified, the director is
not required to reimburse the Company until a final judicial determination is
made with respect thereto as to which all rights of appeal therefrom have been
exhausted or lapsed and the Company is not obligated to indemnify or advance any
additional amounts to the director (unless there has been a determination by a
court of competent jurisdiction that the director would be permitted to be so
indemnified under applicable law). The indemnification agreements also entitle
the director to be paid the expense of prosecuting a claim against a company to
collect an indemnity claim or advancement of expenses from the Company. The
Company is not liable to make any payment under the indemnification agreement
(i) to the extent payment is actually made to the director under an insurance
policy; (ii) to the extent the director is entitled to indemnity and/or payment
under an insurance policy; (iii) to the extent the director is indemnified by
the Company otherwise than pursuant to the indemnification agreement; (iv) to
the extent such indemnity is prohibited under Colorado law, the Amended and
Restated Articles of Incorporation or other applicable law; (v) for an
accounting of profits made from the purchase or sale by the director of
securities of the Company within the meaning of Section 16(b) of the Exchange
Act and amendments thereto or similar provisions of any state statutory law or
common law; or (vi) if a court holds that such payment is prohibited by
applicable law or is against public policy.
The Company may purchase liability insurance policies covering its
directors and officers.
II-5
<PAGE>
Item 16. Exhibits
(a) Exhibits: See Exhibit Index.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising
after the effective date of the Registration 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;
(c) 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;
provided, however, that paragraphs (1)(a) and (1)(b) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, 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.
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 the offering.
4. That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act) that is incorporated by reference in the
Registration Statement 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.
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<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15 of this
Registration Statement, or otherwise, 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 Securities 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
director, officer 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 whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City and County of Denver, State of Colorado on the 23rd day
of April, 1999.
COLUMBUS ENERGY CORP.
By: /s/ Harry A. Trueblood, Jr.
--------------------------------
Harry A. Trueblood, Jr.
Chairman of the Board, President
and Chief Executive Officer
ATTEST:
/s/ H. C. Gutjahr
- ------------------------
H. C. Gutjahr, Secretary
(SEAL)
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Harry A. Trueblood, Jr. and H. C. Gutjahr, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------------- ------------------ -------------
Principal Executive Officer
<S> <C> <C>
/s/ Harry A. Trueblood, Jr. Chairman of the
Harry A. Trueblood, Jr. Board April 23, 1999
Principal Financial and Accounting Officer
/s/ Ronald H. Beck Vice President April 23, 1999
Ronald H. Beck
Majority of Board of Directors
/s/ J. S. Butler Director April 23, 1999
/s/ J. M. Sonosky Director April 23, 1999
/s/ Clarence H. Brown Director April 23, 1999
/s/ Harry A. Trueblood, Jr. Director April 23, 1999
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
Exhibit No.
- -----------
4(a) Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3(a) to
Registration Statement No. 33-17885; Exhibit "a" to
Form 10-Q dated July 13, 1990 and Exhibit 3(1)(a) to
Form 8-K dated May 11, 1995).
4(b) Amended By-Laws (incorporated by reference to Exhibit
3(B) to Form 8-K dated February 20, 1998).
5 Opinion of Sherman & Howard L.L.C.
23(a) Consent of PricewaterhouseCoopers LLP.
23(b) Consent of Reed W. Ferrill & Associates, Inc.
23(c) Consent of Huddleston & Co., Inc.
23(d) Consent of Sherman & Howard L.L.C.
(included in Exhibit 5).
24 Powers of Attorney (included in signature page of
this Registration Statement).
EXHIBIT 5
April 23, 1999
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Re: Validity of Common Stock
Ladies and Gentlemen:
We have acted as special counsel to Columbus Energy Corp., a Colorado
corporation (the "Company"), in connection with its Registration Statement on
Form S-3 filed by the Company with the Securities and Exchange Commission on
April 23, 1999 relating to approximately 673,583 shares of the Company's common
stock, $.20 par value per share ("Common Stock"), owned by certain selling
shareholders named in the Registration Statement (the "Selling Shareholders") or
to be acquired by certain persons upon exercise of outstanding options (the
"Options") or pursuant to the Company's 1993 Employee Stock Purchase Plan (the
"Plan").
We have examined such documents and records, and we have made such
inquiries of officers and representatives of the Company as we have deemed
necessary to render the opinions set forth herein.
Based upon the foregoing examination, we advise you that in our opinion:
(1) The shares of Common Stock owned by the Selling Shareholders as of the
date hereof and being offered pursuant to the Registration Statement
have been duly authorized and are validly issued, and, to our
knowledge, fully paid and nonassessable.
(2) The shares of Common Stock issuable upon exercise of the Options have
been duly authorized and reserved for issuance upon such exercise and,
if and when issued upon such exercise in accordance with the terms of
the Options, will be validly issued, fully paid and nonassessable.
(3) The shares of Common Stock issuable pursuant to the Plan have been
duly authorized and reserved for issuance pursuant to purchases made
under the Plan and, if and when issued upon such purchase in
accordance with the terms of the Plan, will be validly issued, fully
paid and nonassessable.
<PAGE>
Columbus Energy Corp.
April 23, 1999
Page 2
We consent to the filing of this opinion as an exhibit to the Registration
Statement referred to above and to the reference to our firm under the heading
"Legal Matters" in the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the Rules of the
Securities and Exchange Commission thereunder.
Yours truly,
/s/ Sherman & Howard L.L.C.
SHERMAN & HOWARD L.L.C.
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 10, 1999 appearing on page 45 of Columbus Energy Corp.'s Annual Report
on Form 10-K for the year ended November 30, 1998. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Denver, Colorado
April 21, 1999
EXHIBIT 23(b)
April 21, 1999
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Reed W. Ferrill & Associates, Inc. consents to the use of its name and its
reports dated January 27, 1999 entitled "Columbus Energy Corp., Reserve and
Revenue Forecast as of November 30, 1998, Constant Prices and Costs" in whole or
in part, by Columbus Energy Corp. (Columbus) in this Form S-3 to the Securities
and Exchange Commission. We also consent to the reference to our firm under the
caption "Experts".
for and on behalf of
Reed W. Ferrill & Associates, Inc.
/s/ Reed W. Ferrill
-------------------
Reed W. Ferrill
President
RWF/mlb
EXHIBIT 23(c)
April 21, 1999
Columbus Energy Corp.
1660 Lincoln Street, Suite 2400
Denver, Colorado 80264
Huddleston & Co., Inc., consents to the use of its name and its report dated
January 7, 1999, entitled "Columbus Energy Corp., Berry R. Cox Field, Estimated
Reserves and Revenues, as of November 30, 1998, Constant Product Prices" in
whole or in part by Columbus Energy Corp. (Columbus) in Columbus' Form S-3 to
the Securities and Exchange Commission. We also consent to the reference to our
firm under the caption "Experts."
For and On Behalf of
HUDDLESTON & CO., INC.
/s/ Peter D. Huddleston
-------------------------
Peter D. Huddleston, P.E.
President
PDH:dl
