US ENERGY CORP
For the period ended Dec 31, 2025. Filed Mar 13, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 13, 2026
BSIN$1.33+0.8%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-13.
0001437749-25-007375
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-13.
0001437749-26-008057
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 253 previous paragraphs and 265 current paragraphs.
225 unchanged; 14 reworded; 26 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
The construction of our planned processing facility, gathering and transportation system, and power infrastructure is subject to significant risks that could increase costs, delay operations, or prevent completion.
Current report
Our ability to execute our business plan depends on the successful construction and commissioning of new processing, gathering, transportation, and power infrastructure. These projects are complex and subject to risks beyond our control, including permitting and regulatory approvals, supply chain disruptions, labor availability and productivity, contractor performance, design or engineering changes, adverse weather conditions, utility interconnection delays, equipment delivery delays, and unanticipated site or subsurface conditions. Inflationary pressures, changes in interest rates, or increases in material, labor, or energy costs could materially increase capital expenditures beyond current estimates. Delays or cost overruns could defer the commencement of commercial operations, reduce expected returns, require additional financing on unfavorable terms, or result in the impairment of capitalized costs.
Current report
A U.S. federal government shutdown could adversely affect our business, results of operations, and financial condition.
Current report
The U.S. federal government periodically experiences funding gaps that result in partial or complete shutdowns of government operations. A prolonged shutdown could adversely impact the U.S. economy, financial markets, and our business directly and indirectly. During a shutdown, many federal agencies suspend or delay regulatory approvals, contract awards, payments, and other routine functions. To the extent that our business depends on U.S. government contracts, grants, permits, licenses, or other approvals, a shutdown could result in the delay, suspension, or cancellation of such activities, which could materially impact our operations and development activities.
Current report
Additionally, even though the Company does not contract directly with the federal government, a shutdown could have broader negative effects on consumer and business confidence, supply chains, access to financing, and the overall economy. In addition, uncertainty regarding the duration or frequency of government shutdowns may contribute to market volatility and reduced customer spending. Any of these events, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and stock price.
Current report
Our business is subject to risks associated with imposition of tariffs or other trade barriers by the United States or foreign governments.
Current report
Recently there has been increasing uncertainty regarding international trade policies, including the ongoing implementation of tariffs and trade wars on a wide range of goods and materials, as well as retaliatory measures by other countries. These developments may result in higher costs for certain raw materials, components, and finished products, and may adversely impact our supply chain, including pricing, delivery timeline and general availability of products needed for our operations.
Current report
The Company may be unable to fully mitigate any cost increases through price adjustments, supplier diversification, or other measures. Accordingly, continued or heightened global trade tensions or changes in tariff regimes, or the imposition of new trade restrictions could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Current report
Risks Relating to our Purchase Agreement with Roth Principal Investments
Current report
The issuance and sale of our Common Stock to Roth Principal Investments may cause dilution to our other stockholders and the sale of the shares of Common Stock acquired by Roth Principal Investments, or the perception that such sales may occur, could cause the price of our Common Stock to fall.
Current report
On October 9, 2025, we entered into the purchase agreement with Roth Principal Investments, pursuant to which Roth Principal Investments has committed to purchase up to $25.0 million of Purchase Shares, upon the terms and subject to the conditions set forth in the purchase agreement. Upon the execution of the purchase agreement, we issued 223,141 Commitment Shares to Roth Principal Investments as consideration for its commitment to purchase our Purchase Shares at our direction under the purchase agreement. The remaining shares of our common stock that may be issued under the purchase agreement may be sold by us to Roth Principal Investments at our discretion from time to time over a 24-month period following the effective date of a Form S-1 Registration Statement which was declared effective on December 1, 2025, subject to certain conditions. The purchase price for the shares that we may sell to Roth Principal Investments under the purchase agreement will fluctuate based on the market price of our common stock. Depending on demand and market liquidity at the time, sales of such shares by Roth Principal Investments may cause the trading price of our common stock to fall.
Current report
We generally have the right to control the timing and amount of any future sales of our shares to Roth Principal Investments. Any sales of our common stock to Roth Principal Investments will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Roth Principal Investments all, some or none of the shares of our common stock that may be available for us to sell pursuant to the purchase agreement. If and when we sell shares to Roth Principal Investments, Roth Principal Investments may then resell all, some or none of those shares at any time or from time to time in its discretion. Therefore, our sales to Roth Principal Investments could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Roth Principal Investments, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
Current report
It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to Roth Principal Investments, or the actual gross proceeds resulting from those sales.
Current report
On October 9, 2025, we entered into the purchase agreement with Roth Principal Investments, pursuant to which Roth Principal Investments has committed to purchase up to $25,000,000 of shares of our common stock, subject to certain limitations and conditions set forth in the purchase agreement. The shares of our common stock that may be issued under the purchase agreement may be sold by us to Roth Principal Investments at our discretion from time to time during the Commitment Period.
Current report
We generally have the right to control the timing and amount of any sales of our shares of common stock to Roth Principal Investments under the purchase agreement. Sales of our common stock, if any, to Roth Principal Investments under the purchase agreement will depend upon market conditions and other factors to be determined by us.
Current report
Because the per share purchase price that Roth Principal Investments will pay for Purchase Shares in any Market Open Purchase or Intraday Purchase that we may elect to effect pursuant to the purchase agreement will be determined by reference to the VWAP during the applicable valuation periods. It is not possible for us to predict the number of shares of common stock that we will sell to Roth Principal Investments as Purchase Shares under the purchase agreement, the purchase price per share that Roth Principal Investments will pay for Purchase Shares purchased from us under the purchase agreement, or the aggregate gross proceeds that we will receive from those purchases by Roth Principal Investments under the purchase agreement.
Current report
Although the purchase agreement provides that we may sell up to $25,000,000 of our common stock to Roth Principal Investments, only 23,876,859 Purchase Shares (in addition to the 223,141 Commitment Shares, for which we have not and will not receive any cash consideration) have been registered under the Securities Act for resale by Roth Principal Investments. Depending on the market prices of our common stock on the Purchase Dates on which we elect to sell such Purchase Shares to Roth Principal Investments under the purchase agreement, we may need to register under the Securities Act additional shares of our common stock for resale by Roth Principal Investments in order for us to receive aggregate proceeds equal to Roth Principal Investments’ $25,000,000 maximum aggregate purchase commitment available to us under the purchase agreement.
Current report
Moreover, to the extent that the Exchange Cap remains applicable to issuances and sales of our common stock under the Purchase Agreement, if we elect to issue and sell to Roth Principal Investments more shares of common stock than the Exchange Cap (or 7,123,382 shares of common stock, 223,141 of which shares represent the Commitment Shares that we issued to Roth Principal Investments upon execution of the purchase agreement on October 9, 2025, for which we have not and will not receive any cash consideration) under the purchase agreement, which we have the right, but not the obligation, to do, we must first obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap under the purchase agreement in accordance with applicable Nasdaq rules.
Current report
The Roth Principal Investments will pay less than the then-prevailing market price for our shares of Common Stock, which could cause the price of our Common Stock to decline.
Current report
The purchase price of our common stock to be sold to Roth Principal Investments under the Purchase Agreement is derived from the market price of our common stock on Nasdaq. Common stock to be sold to Roth Principal Investments pursuant to the Purchase Agreement will be purchased at a discounted price. The actual amount of proceeds we receive pursuant to each Purchase Notice (each, the “Purchase Amount”) is determined by multiplying the Purchase Amount requested by the applicable purchase price.
Current report
The Roth Principal Investments may sell the shares it receives immediately after receipt of such shares, and/or may sell such shares short prior to the purchase of such shares, which may be prior to final determination of the purchase price for such shares and could cause the price of our common stock to decrease. If the price of our common stock declines, then Roth Principal Investments may pay a lower purchase price for such shares.
Current report
We will owe the Roth Principal Investments additional consideration in the event it does not generate at least $450,000 in proceeds from the Roth Principal Investments’*** resale of the Commitment Shares.***
Current report
As consideration for Roth Principal Investments’ commitment to purchase shares of common stock our direction upon the terms and subject to the conditions set forth in the purchase agreement, we (i) paid to Roth Principal Investments a cash “structuring fee” of $25,000, prior to our execution of the purchase agreement, (ii) upon our execution of the purchase agreement, we issued 223,141 Commitment Shares to Roth Principal Investments, which Commitment Shares had a total aggregate value equal to 1.08% of Roth Principal Investments’ $25,000,000 total aggregate purchase commitment under the purchase agreement (each Commitment Share valued at $1.21 per share, representing the closing sale price of the common stock immediately prior to the execution of the purchase agreement, rounded to the nearest whole share), and (iii) agreed to pay to Roth Principal Investments the Cash Commitment Fee of $180,000, which was equal to 0.72% of Roth Principal Investments’ $25,000,000 total aggregate dollar amount purchase commitment under the purchase agreement. Under the terms of the purchase agreement, in certain circumstances set forth in the purchase agreement, we may be required to pay Roth Principal Investments up to $270,000 (or 1.08% of Roth Principal Investments’ $25,000,000 aggregate purchase commitment under the purchase agreement), in cash, as a “make-whole” payment to the extent the aggregate amount of cash proceeds, if any, received by Roth Principal Investments from the resale of the Commitment Shares, prior to certain times set forth in the purchase agreement, is less than $270,000, in exchange for Roth Principal Investments returning to us for cancelation all of the Commitment Shares we originally issued to Roth Principal Investments upon execution of the purchase agreement that were not previously resold by Roth Principal Investments prior to the times specified in the purchase agreement, if any. We will not make any such cash “make-whole” payment to Roth Principal Investments if, after the Commencement Date, the aggregate net proceeds received by Roth Principal Investments from their resale of all or any portion of the Commitment Shares equals or exceeds $270,000.
Removed paragraphs (14)
Previous report
The success of the Company will also depend upon the Company having access to sufficient development capital, being able to maintain title to its properties and obtain all required approvals for its activities. In the event that exploration programs prove to be unsuccessful this could lead to a diminution in the value of the Company’s properties, a reduction in the cash reserves of the Company and possible relinquishment of the Company’s properties.
Previous report
We have identified material weaknesses in our internal control over financial reporting, and our management has concluded that our disclosure controls and procedures were not effective for periods since 2017. We cannot assure you that additional material weaknesses or significant deficiencies do not exist or that they will not occur in the future. If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results or prevent fraud, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.
Previous report
Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We maintain a system of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America ("GAAP"). A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
Previous report
Based on the results of management’s assessment and evaluation of our internal controls, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was not effective as of December 31, 2024 due to a material weakness related to the ineffective design of our accounting system. Specifically, reliance could not be placed on some of the control elements of the accounting system. These control elements include a lack of certain functionality related to system-based account reconciliations, missing systematic controls in areas such as segregation of duties enforcement and data input validation, and an absence of independent evaluation of third-party information technology general controls (“ITGCs”). The Company's manual review controls partially compensate for the system design limitations, but this material weakness cannot be remediated without the implementation of a system-based solution.
Previous report
As a result, our management also concluded that our disclosure controls and procedures were not effective as of December 31, 2024, such that the information relating to us required to be disclosed in the reports we file with the SEC (a) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) is accumulated and communicated to our management to allow timely decisions regarding required disclosures and such disclosure controls and procedures have not been deemed effective since approximately December 31, 2016.
Previous report
Maintaining effective disclosure controls and procedures and effective internal control over financial reporting are necessary for us to produce reliable financial statements and the Company is committed to remediating its material weaknesses in such controls as promptly as possible. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future. Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements and cause us to fail to meet our reporting and financial obligations, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock, and/or result in litigation against us or our management. In addition, even if we are successful in strengthening our controls and procedures, those controls and procedures may not be adequate to prevent or identify irregularities or facilitate the fair presentation of our financial statements or our periodic reports filed with the SEC.
Previous report
Certain of our directors beneficially own approximately 52.9% of our outstanding common stock, which gives them majority voting control over stockholder matters, and each are also party to a Nominating and Voting Agreement, which allows them to control who is appointed to the Board of Directors of the Company and their interests may be different from your interests; and as a result of such ownership, we are a“controlled company”*** under applicable Nasdaq Capital Market Rules.***
Previous report
John A. Weinzierl, Duane H. King and Joshua Batchelor, our Chairman, director, and director, respectively, beneficially own an aggregate of 18,366,735 shares of our common stock, representing approximately 51.1% of our outstanding common stock, including approximately 27.5%, 10.1% and 17.4% of our common stock beneficially owned by each of John A. Weinzierl, Duane H. King and Joshua Batchelor, including the recent grants approved as of February 14, 2025. Ownership splits include shares owned directly and indirectly by each director. As such, Messrs. Weinzierl, King and Batchelor can control the outcome of all matters requiring a stockholder vote, including the election of directors, the adoption of amendments to our Certificate of Incorporation or Bylaws and the approval of mergers and other significant corporate transactions. Subject to any fiduciary duties owed to the stockholders generally, while Messrs. Weinzierl’s, King’s and Batchelor’s interests may generally be aligned with the interests of our stockholders, in some instances Messrs. Weinzierl, King and Batchelor may have interests different than the rest of our stockholders. Messrs. Weinzierl’s, King’s and Batchelor’s influence or control of our company as stockholders may have the effect of delaying or preventing a change of control of our company and may adversely affect the voting and other rights of other stockholders. Because Messrs. Weinzierl, King and Batchelor control the stockholder vote, investors may find it difficult to replace Messrs. Weinzierl, King and Batchelor (and such persons as they may appoint from time to time) as members of our management and board of directors if they disagree with the way our business is being operated. Additionally, the interests of Messrs. Weinzierl, King and Batchelor may differ from the interests of the other stockholders and thus result in corporate decisions that are adverse to other stockholders.
Previous report
Separately, each of the entities controlled by Messrs. Weinzierl, King and Batchelor entered into an Amended and Restated Nominating and Voting Agreement with us and certain of their affiliates and other third parties on September 16, 2022 (the “A&R Voting Agreement”). The A&R Voting Agreement provides that each of Lubbock Energy Partners LLC; Banner Oil & Gas, LLC, Woodford Petroleum, LLC and Llano Energy LLC (each a “Nominating Party”), each of which were at the time of entry into the A&R Voting Agreement, beneficially owned by one or more of Messrs. Weinzierl, King and Batchelor, has the right to designate for nomination to the Board two nominees (for so long as such Nominating Party (and its affiliates) beneficially owns at least 15% of the Company’s outstanding common stock) and one nominee (for so long as such Nominating Party (and its affiliates) beneficially owns at least 5% of the Company’s common stock), for appointment at any stockholder meeting or via any consent to action without meeting of the stockholders of the Company. The A&R Voting Agreement also requires the Board to include such nominees in the slate of directors up for appointment at each meeting of stockholders where directors will be appointed, and take other actions to ensure that such persons are elected to the Board by the stockholders of the Company. Pursuant to the A&R Voting Agreement, if any Nominating Party’s nominated party ceases for any reason to serve on the Board, such nominated party will be provided the right to appoint another person to the Board, who shall be appointed to the Board pursuant to the power to fill vacancies given to the Board without a stockholder vote, by the Bylaws of the Company.
Previous report
Because of Messrs. Weinzierl’s, King’s and Batchelor’s ownership of the Company, as discussed above, we are a “controlled company” under the rules of the Nasdaq Capital Market. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and, as such, can elect to be exempt from certain corporate governance requirements, including requirements that:
Previous report
As a “controlled company,” we may elect to rely on some or all of these exemptions, provided that we have to date not taken advantage of any of these exemptions and do not currently intend to take advantage of any of these exemptions moving forward. Notwithstanding that, should the interests of Messrs. Weinzierl, King and Batchelor differ from those of other stockholders, the other stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq Capital Market corporate governance standards. Even if we do not avail ourselves of these exemptions, our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.
Previous report
Anti-takeover provisions may impede the acquisition of the Company.
Previous report
SEC rules could limit our ability to book proved undeveloped reserves (“PUDs”) in the future.
Previous report
SEC rules require that, subject to limited exceptions, PUDs may only be booked if they relate to wells scheduled to be drilled within five years after the date of booking. This requirement has limited and may continue to limit our ability to book additional PUDs as we pursue our drilling program. Moreover, we may be required to write down our PUDs if we do not drill or plan on delaying those wells within the required five-year timeframe.
Reworded paragraphs (14)
Previous wording
We may need to raise additional funding to complete future potential acquisitions and will be required to raise additional funds through public or private debt or equity financing or other various means to fund our operations and complete workovers and acquire assets. In such a case, adequate funds may not be available when needed or may not be available on favorable terms. If we need to raise additional funds in the future by issuing equity securities, dilution to existing stockholders will result, and such securities may have rights, preferences, and privileges senior to those of our common stock. If funding is insufficient at any time in the future and we are unable to generate sufficient revenue from new business arrangements, to complete future acquisitions or operations, our results of operations and the value of our securities could be adversely affected.
Current wording
We may need to raise additional funding to complete future potential acquisitions and will be required to raise additional funds through public or private debt or equity financing or other various means to fund our operations and complete workovers and acquire assets. In such a case, adequate funds may not be available when needed or may not be available on favorable terms. If we need to raise additional funds in the future by issuing equity securities, (including pursuant to our purchase agreement with Roth Principal Investments), dilution to existing stockholders will result, and such securities may have rights, preferences, and privileges senior to those of our common stock. If funding is insufficient at any time in the future and we are unable to generate sufficient revenue from new business arrangements, to complete future acquisitions or operations, our results of operations and the value of our securities could be adversely affected.
Previous wording
Declines in the prices we receive for our oil and natural gas can also adversely affect our ability to finance capital expenditures, make acquisitions, raise capital and satisfy our financial obligations. In addition, declines in prices can reduce the amount of industrial gas, oil and natural gas that we can produce economically and the estimated future cash flow from that production and, as a result, adversely affect the quantity and present value of our proved reserves. Among other things, a reduction in the amount or present value of our reserves can limit the capital available to us, and the availability of other sources of capital likely will be based to a significant degree on the estimated quantity and value of the reserves.
Current wording
Decline in the prices we receive for our oil and natural gas can also adversely affect our ability to finance capital expenditures, make acquisitions, raise capital and satisfy our financial obligations. In addition, declines in prices can reduce the amount of industrial gas, oil and natural gas that we can produce economically and the estimated future cash flow from that production and, as a result, adversely affect the quantity and present value of our proved reserves. Among other things, a reduction in the amount or present value of our reserves can limit the capital available to us, and the availability of other sources of capital likely will be based to a significant degree on the estimated quantity and value of the reserves.
Previous wording
Declines in industrial gas, oil, NGL, or natural gas prices will reduce not only our revenue but also the quantity of production that can be produced economically. Should industrial gas, oil, natural gas and prices decline in the future, our operated wells, may be forced to be shut-in, and exploration and development plans for prospects and exploration or development activities may need to be postponed or abandoned. As a result, we may have to make substantial downward adjustments to our estimated proved reserves or industrial gas resources, each of which would have a material adverse effect on our business, financial condition, and results of operations.
Current wording
A decline in industrial gas, oil, NGL, or natural gas prices will reduce not only our revenue but also the quantity of production that can be produced economically. Should industrial gas, oil, natural gas and prices decline in the future, our operated wells, may be forced to be shut-in, and exploration and development plans for prospects and exploration or development activities may need to be postponed or abandoned. As a result, we may have to make substantial downward adjustments to our estimated proved reserves or industrial gas resources, each of which would have a material adverse effect on our business, financial condition, and results of operations.
Previous wording
Concerns over global economic conditions, the threat of pandemic diseases and the results thereof, energy costs, geopolitical issues, tariffs, changing inflation and interest rates, the availability and cost of credit have contributed to increased economic uncertainty and diminished expectations for the global economy. These factors, combined with volatile prices of industrial gas, oil and natural gas, declining business and consumer confidence, and increased unemployment, may result in an economic slowdown and/or a recession, which could expand to a global depression. Concerns about global economic growth have had a significant adverse impact on global financial markets and commodity prices and are expected to continue having a material adverse effect for the foreseeable future. If the economic climate in the United States or abroad continues to deteriorate, demand for petroleum products could diminish, which could further impact the price at which we can sell industrial gas, oil, natural gas, and natural gas liquids, and/or affect the ability of our vendors, suppliers and customers to continue operations, and ultimately adversely impact our results of operations, liquidity and financial condition. In addition, a decline in consumer confidence or changing patterns in the availability and use of disposable income by consumers can negatively affect the demand for oil and gas and as a result our results of operations.
Current wording
Concerns over global economic conditions, the threat of pandemic diseases and the results thereof, energy costs, geopolitical issues, tariffs, trade wars, wars, the value of the U.S. dollar, changing inflation and interest rates, the availability and cost of credit have contributed to increased economic uncertainty and diminished expectations for the global economy. These factors, combined with volatile prices of industrial gas, oil and natural gas, declining business and consumer confidence, and increased unemployment, may result in an economic slowdown and/or a recession, which could expand to a global depression. Concerns about global economic growth have had a significant adverse impact on global financial markets and commodity prices and are expected to continue having a material adverse effect for the foreseeable future. If the economic climate in the United States or abroad continues to deteriorate, demand for petroleum products could diminish, which could further impact the price at which we can sell industrial gas, oil, natural gas, and natural gas liquids, and/or affect the ability of our vendors, suppliers and customers to continue operations, and ultimately adversely impact our results of operations, liquidity and financial condition. In addition, a decline in consumer confidence or changing patterns in the availability and use of disposable income by consumers can negatively affect the demand for oil and gas and as a result our results of operations.
Previous wording
Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession, application of tariffs and trade wars, the price of energy, fluctuating interest rates and inflation, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, and tax rates. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition.
Current wording
Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession, application of tariffs and trade wars, the price of energy, fluctuating interest rates and inflation, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, and tax rates. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future at commercially acceptable terms. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition.
Previous wording
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provides for statutory and regulatory requirements for derivative transactions, including crude oil and natural gas derivative transactions. Among other things, the Dodd-Frank Act provides for the creation of position limits for certain derivatives transactions, as well as requiring certain transactions to be cleared on exchanges for which cash collateral will be required. The Dodd-Frank Act requires the Commodities Futures and Trading Commission (the “CFTC”), the SEC and other regulators to promulgate rules and regulations implementing the Dodd-Frank Act.
Current wording
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) provides for statutory and regulatory requirements for derivative transactions, including crude oil and natural gas derivative transactions. Among other things, the Dodd-Frank Act provides for the creation of position limits for certain derivatives transactions, as well as requiring certain transactions to be cleared on exchanges for which cash collateral will be required. The Dodd-Frank Act requires the Commodity Futures and Trading Commission (the “CFTC”), the SEC and other regulators to promulgate rules and regulations implementing the Dodd-Frank Act.
Previous wording
John A. Weinzierl, Duane H. King and Joshua Batchelor, each a member of the Board of Directors of the Company, may hold various other management positions with privately-held companies, some of which are involved in the oil and gas industry, and together such persons control or have joint control, over a majority of our common stock. We believe these positions will not conflict with their roles or responsibilities with our company. Certain of these entities are party to agreements with the Company and if any of these companies enter into any additional transactions or agreements with our company, or other related party transactions or matters exist, potential conflicts of interest could arise from the directors performing services for us and these other entities.
Current wording
John A. Weinzierl and Duane H. King, each a member of the Board of Directors of the Company, may hold various other management positions with privately-held companies, some of which are involved in the oil and gas industry, and together such persons own more than 30 percent of our common stock. We believe these positions will not conflict with their roles or responsibilities with our company. Certain of these entities are party to agreements with the Company and if any of these companies enter into any additional transactions or agreements with our company, or other related party transactions or matters exist, potential conflicts of interest could arise from the directors performing services for us and these other entities.
Previous wording
We depend to a significant degree upon the involvement of our management, specifically, our Chief Executive Officer, Ryan L. Smith. Our performance and success are dependent to a large extent on the efforts and continued employment of Mr. Smith. We do not believe that Mr. Smith could be quickly replaced with personnel of equal experience and capabilities, and his successor(s) may not be as effective. If Mr. Smith or any of our other key personnel resign or become unable to continue in their present roles and if they are not adequately replaced, our business operations could be adversely affected. The Company entered into an agreement with Mr. Smith on May 5, 2022. The term of Mr. Smith’s Employment Agreement commenced on May 5, 2022, and had an initial term expiring January 1, 2024, subject to automatic one-year renewals thereafter in the event neither party provides the other at least 60 days prior written notice of their intention not to renew the terms of the agreement. Because neither party provided the other notice of termination prior to January 1, 2024, the agreement renewed for an additional one year, and currently had a term through January 1, 2025 (subject to additional one year renewals thereafter). On August 14, 2024, effective July 1, 2024, the Company entered into a new amended and restated employment agreement with Mr. Smith, which amended and restated in its entirety the prior employment agreement between the Company and Mr. Smith dated May 5, 2022. That new agreement has an initial term expiring January 1, 2027, subject to automatic successive two-year renewals thereafter.
Current wording
We depend to a significant degree upon the involvement of our management, specifically, our Chief Executive Officer, Ryan L. Smith. Our performance and success are dependent to a large extent on the efforts and continued employment of Mr. Smith. We do not believe that Mr. Smith could be quickly replaced with personnel of equal experience and capabilities, and his successor(s) may not be as effective. If Mr. Smith or any of our other key personnel resign or become unable to continue in their present roles and if they are not adequately replaced, our business operations could be adversely affected. The Company entered into an agreement with Mr. Smith on May 5, 2022. The term of Mr. Smith’s Employment Agreement commenced on May 5, 2022, and had an initial term expiring January 1, 2024, subject to automatic one-year renewals. On August 14, 2024, effective July 1, 2024, the Company entered into a new amended and restated employment agreement with Mr. Smith, which amended and restated in its entirety the prior employment agreement between the Company and Mr. Smith dated May 5, 2022. That new agreement has an initial term expiring January 1, 2027, subject to automatic successive two-year renewals thereafter.
Previous wording
Our stock is traded on The Nasdaq Capital Market under the symbol “USEG”. For the twelve-month period ending March 10, 2025, our common stock has traded as high as $6.40 per share and as low as $0.81 per share. We expect our common stock will continue to be subject to wide fluctuations as a result of a variety of factors, including factors beyond our control. These factors include:
Current wording
Our stock is traded on The Nasdaq Capital Market under the symbol “USEG”. For the year ended December 31, 2025, our common stock has traded as high as $3.79 per share and as low as $0.92 per share. We expect our common stock will continue to be subject to wide fluctuations as a result of a variety of factors, including factors beyond our control. These factors include:
Previous wording
If we are delisted from The Nasdaq Capital Market, your ability to sell your shares of our common stock could also be limited by the penny stock restrictions, which could further limit the marketability of your shares.
Current wording
If our common stock is delisted from The Nasdaq Capital Market, your ability to sell your shares of our common stock could also be limited by the penny stock restrictions, which could further limit the marketability of your shares.
Previous wording
On April 13, 2022, August 5, 2022, November 7, 2022, February 9, 2023, and May 18, 2023, the Company’s Board of Directors approved the declaration and payment of quarterly cash dividends of $0.0225 per share of common stock. Our Board of Directors, at its sole discretion, determines the amount of the quarterly dividends to be distributed to our shareholders, if any, based on consideration of a number of factors including, but not limited to, our results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including future acquisitions and divestitures. Consequently, our dividend levels may fluctuate. On August 9, 2023, the Board of Directors determined it appropriate to suspend dividend payments, with the associated future capital resources being allocated towards the Company’s share repurchase program and repayments of the outstanding balance on our credit facility. The Board of Directors may or may not reinstate future dividend payments in the future, the amount and frequency of which will be determined at the sole discretion of the Board. To the extent that the dividend is not reinstated in the future, only appreciation of the price of our common stock, which may not occur, will provide a return to our stockholders.
Current wording
On August 9, 2023, the Board of Directors determined it appropriate to suspend dividend payments, with the associated future capital resources being allocated towards the Company’s share repurchase program, repayments of the outstanding balance on our credit facility and other Company initiatives. The Board of Directors may or may not reinstate future dividend payments in the future, the amount and frequency of which will be determined at the sole discretion of the Board. To the extent that the dividend is not reinstated in the future, only appreciation of the price of our common stock, which may not occur, will provide a return to our stockholders. The determination to pay dividends on our common stock is at the discretion of our Board of Directors.
Previous wording
We have registered the resale of 19,905,736 shares of common stock pursuant to a Form S-3 Registration Statement, which shares of common stock represent approximately 58.9% of our currently outstanding shares of common stock. Such shares of common stock may be resold in the public market immediately without restriction. The registered shares represent a significant number of shares of our common stock, and if sold in the market all at once or at about the same time, could significantly depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital in the future at a time and price that we deem reasonable or appropriate.
Current wording
We have registered the resale of a significant number of shares of common stock pursuant to a Form S-3 Registration Statement and a Form S-1 Registration Statement. The registered shares represent a significant number of shares of our common stock, and if sold in the market all at once or at about the same time, could significantly depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital in the future at a time and price that we deem reasonable or appropriate.
Previous wording
Anti-takeover provisions in our Certificate of Incorporation and our Amended and Restated Bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.
Current wording
Anti-takeover provisions in our Certificate of Incorporation and our Amended and Restated Bylaws, as well as provisions of Delaware law, might discourage, delay or prevent an acquisition of the Company, a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.
Previous wording
Our Certificate of Incorporation and Amended and Restated Bylaws and Delaware law contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions:
Current wording
Additionally, our Certificate of Incorporation and Amended and Restated Bylaws also contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or delay attempts by our stockholders to replace or remove our management. Our corporate governance documents include provisions: