U.S. Energy Corp. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Financial Statements and Exhibits

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FORM 8-K

 

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 16, 2025

 

(Exact name of registrant as specified in its charter)

 

 

 

Registrant’s telephone number, including area code: (303) 993-3200

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

As previously reported in the Current Report on Form 8-K filed by U.S. Energy Corp. (“U.S. Energy”, “we”, “us” or the “Company”), with the Securities and Exchange Commission (the “SEC” or the “Commission”) on January 10, 2022, on January 5, 2022, the Company entered into a credit agreement (as amended and modified from time to time, the “Credit Agreement”) with Firstbank Southwest (“Firstbank”) as administrative agent for one or more lenders (the “Lenders”), and the Lenders, which provided for a revolving line of credit with an initial borrowing base of $15 million (which was subsequently increased to $20 million on July 26, 2022, pursuant to a Borrowing Base Increase Letter (the “Borrowing Base Increase Letter”)), subject to adjustment as discussed in the Credit Agreement, and a maximum credit amount of $100,000,000.

 

On September 16, 2025, and effective August 1, 2025, the Company entered into a First Amendment to Credit Agreement and Limited Waiver with Firstbank, as administrative agent for the Lenders and the Lenders (the “First Amendment”).

 

Pursuant to the First Amendment, the Credit Agreement was amended to:

 

(a)    Extend the maturity date of the amounts owed under the Credit Agreement from January 5, 2026 to May 31, 2029;

 

(b)    Lower the borrowing base to $10,000,000;

 

(c)    Update certain dates and addresses in the Credit Agreement for the changes discussed above, and for the First Amendment;

 

(d)    Update certain schedules of the Credit Agreement; and

 

(e)    Make certain other changes to the First Amendment as described in greater detail therein.

 

The First Amendment also provided for the waiver by the Lenders and Firstbank of certain technical defaults which had occurred under the Credit Agreement, relating to the Company’s subsidiaries either not being in good standing or being dissolved or sold, and the Company’s prior reorganization from Wyoming to Delaware.

 

The First Amendment includes certain post-closing conditions of the Company and customary representations and warranties of the Company.

 

As a result of the First Amendment, revolving loans under the Credit Agreement may be borrowed, repaid and re-borrowed until May 31, 2029, when all outstanding amounts must be repaid.

 

Interest on the outstanding amounts under the Credit Agreement will accrue at an interest rate equal to (a) the greatest of (i) the prime rate in effect on such day, and (b) the Federal Funds rate in effect on such day (as determined in the Credit Agreement) plus 0.50%, and an applicable margin that ranges between 0.25% to 1.25% depending on utilization of the amount of the borrowing base (the “Applicable Margin”). If the Company fails to deliver a report setting forth its proved oil and natural gas reserves as and when required under the Credit Agreement, the applicable margin will be 1.25% regardless of utilization.

 

In the event that certain events of default (as described under the Credit Agreement) occur, the outstanding amounts will bear an additional 2.00% interest per annum. Accrued interest on each revolving loan is payable in arrears on the last day of each March, June, September and December.

 

 

The Company generally has the right to make prepayments of the borrowings at any time without penalty or premium under the Credit Agreement. A commitment fee of 0.50% accrues on the average daily amount of the unused portion of the borrowing base and is payable in arrears on the last business day of March, June, September and December of each year and on the maturity date.

 

We are also required to make certain mandatory repayments under the Credit Agreement, in the event the borrowing base decreases below the aggregate amount of loans made by the Lenders and/or if as of the last business day of any calendar month, certain required debt ratios required under the Credit Agreement are not met, there are outstanding amounts owed to the Lenders, and the Company has consolidated cash on hand in excess of $5 million, and in some cases we are also required to pay cash to the agent to be held as collateral.

 

The Credit Agreement contains customary indemnification requirements, representations and warranties and customary affirmative and negative covenants applicable to the Company and its subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, transactions with affiliates, and dividends and other distributions. In addition, the Credit Agreement contains financial covenants, tested quarterly, that limit the Company’s ratio of total debt to EBITDAX (as defined in the Credit Agreement) to 3:1 (beginning March 31, 2026) and require its ratio of consolidated current assets to consolidated current liabilities (as each is described in the Credit Agreement) to remain at 1:1 or higher.

 

We currently owe $0 under the Credit Agreement as of the date of this Report.

 

The foregoing summary description of the Credit Agreement and First Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, as amended by the Borrowing Base Increase Letter, and First Amendment, which are incorporated by reference herein as Exhibits 10.1 and 10.2 and attached hereto as Exhibit 10.3 to this Current Report on Form 8-K, respectively, and are incorporated by reference in this Item 1.01.

 

 

 

* Filed herewith.

# Certain schedules, exhibits, annexes, and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that U.S. Energy Corp. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

 

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.