As filed with the Securities and Exchange Commission on January 28, 2003
Registration No. 333-99151
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A
(AMENDMENT NO. 1)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KESTREL ENERGY, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0772451
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
999 18th Street, Suite 2490
Denver, Colorado 80202
(303) 295-0344
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
--------------------
With copies to:
BARRY D. LASKER S. LEE TERRY, JR., ESQ.
President Davis Graham & Stubbs LLP
Kestrel Energy, Inc. 1550 17th Street, Suite 500
999 18th Street, Suite 2490 Denver, Colorado 80202
Denver, Colorado 80202 (303) 892-9400
(303) 295-0344 (303) 893-1379 Fax
(303) 295-1961 Fax
(Names, addresses, including zip codes, and telephone numbers, including area
codes, of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plans, please 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. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
Title of each class of offering aggregate Amount of
securities to be Amount to be price per offering registration
registered registered share (1) price (1) fee
--------------------------------------------------------------------------------
Common Stock(2) 2,818,000 $0.32 $901,760 $82.96
--------------------------------------------------------------------------------
Warrants(3) 1,409,000 $0.01 $14,090 $1.30
--------------------------------------------------------------------------------
Total $915,850 $84.26
================================================================================
(1) Estimated solely for purposes of calculating the registration fee.
Pursuant to Rule 457(c), the offering price of $0.32 per share is the last
sale price reported by The Nasdaq SmallCap Stock Market on September 3,
2002.
(2) Includes 1,409,000 shares of common stock and 1,409,000 shares of common
stock underlying warrants held by the selling shareholders for subsequent
resale by the selling shareholders, and pursuant to Rule 416 under the
Securities Act, an indeterminate number of shares of common stock which
may be issued from time to time upon exercise of such warrants by reason
of adjustment of the number of shares of common stock to be issued upon
such exercises under certain circumstances.
(3) Warrants registered on behalf of selling shareholders based on the fair
market value of the warrants at the date of grant.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting in accordance with Section
8(a), may determine.
PROSPECTUS
KESTREL ENERGY, INC.
2,818,000 SHARES
COMMON STOCK
1,409,000 WARRANTS
--------------------
This prospectus relates to 2,818,000 shares and 1,409,000 warrants that
may be sold from time to time by the selling shareholders named in this
prospectus. The shares offered include 1,409,000 currently outstanding shares
and 1,409,000 shares for exercise of warrants issued in a private placement by
us in March and April 2002. The warrants entitle the holder to purchase an equal
number of our shares of common stock at an exercise price of $1.25 per share.
The offering is not being underwritten. The offering price of our common
stock that may be sold by selling shareholders may be the market price for our
common stock prevailing at the time of sale, a price related to the prevailing
market price, a negotiated price or such other prices as the selling
shareholders determine from time to time. The warrants do not have an
established trading market and will not be listed on any securities exchange.
The offering price for the warrants that may be sold by the selling shareholders
may be the market price, if a market develops, a negotiated price or such other
prices as the selling shareholders determine from time to time.
We will receive up to $1,761,250 upon the exercise of the warrants by the
selling shareholders based upon an exercise price of $1.25 per share. We will
not receive the proceeds from the sales of our common stock or the warrants by
the selling shareholders.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"KEST." On January 27, 2003, the last reported sale price of our common stock
was $0.43 per share.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
CAREFULLY CONSIDER THE 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.
KESTREL ENERGY, INC.
999 18th Street, Suite 2490
Denver, Colorado 80202
(303) 295-0344
The date of this Prospectus is _________, 2003.
The information in this prospectus is not complete and may change. We may not
sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
[INSIDE FRONT COVER]
TABLE OF CONTENTS
Risk Factors.................................................................3
Forward-Looking Statements...................................................6
Where You Can Find More Information..........................................7
Our Business.................................................................8
Recent Developments..........................................................8
Use of Proceeds..............................................................9
Selling Shareholders.........................................................9
Plan of Distribution........................................................10
Experts.....................................................................11
Legal Matters...............................................................11
.......You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and
seeking offers to buy, shares of common stock only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
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RISK FACTORS
WE MUST CONTINUE TO EXPAND OUR OPERATIONS
Our long term success is ultimately dependent on our ability to expand our
revenue base through the acquisition of producing properties and, to a much
greater extent, by successful results in our exploration efforts. There is no
assurance that our acquisitions will be as successful as projected. All of our
exploration projects are subject to failure and the loss of our investment.
PRICES OF OIL AND NATURAL GAS FLUCTUATE WIDELY BASED ON MARKET CONDITIONS AND
ANY DECLINE WILL ADVERSELY AFFECT OUR FINANCIAL CONDITION
Our revenues, operating results, cash flow and future rate of growth are
very dependent upon prevailing prices for oil and gas. For the fiscal year ended
June 30, 2002, approximately $1,149,500 of our revenue was attributed to the
sale of oil and gas. Historically, oil and gas prices and markets have been
volatile and not predictable, 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:
o the strength of the United States and the global economy;
o political conditions in the Middle East and elsewhere;
o the supply and price of foreign oil and gas;
o the level of consumer product demand;
o the price and availability of alternative fuels;
o the effect of federal and state regulation of production and
transportation; and
o the proximity of our natural gas to pipelines and their capacity.
WE MUST REPLACE THE RESERVES WE PRODUCE
A substantial portion of our oil and gas properties are proved undeveloped
reserves. Successful development and production of such reserves cannot be
assured. Additional drilling will be necessary in future years both to maintain
production levels and to define the extent and recoverability of existing
reserves. There can be no assurance that our present oil and gas wells will
continue to produce at current or anticipated rates of production, that
development drilling will be successful, that production of oil and gas will
commence when expected, that there will be favorable markets for oil and gas
which may be produced in the future or that production rates achieved in early
periods can be maintained.
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THERE ARE MANY RISKS IN DRILLING OIL AND GAS WELLS
The cost of drilling, completing and operating wells is often uncertain.
Moreover, drilling may be curtailed, delayed or canceled as a result of many
factors, including title problems, weather conditions, shortages of or delays in
delivery of equipment, as well as the financial instability of well operators,
major working interest owners and well servicing companies. Our gas wells may be
shut-in for lack of a market until a gas pipeline or gathering system with
available capacity is extended into our area. Our oil wells may have production
curtailed until production facilities and delivery arrangements are acquired or
developed for them.
WE FACE INTENSE COMPETITION
The oil and natural gas industry is highly competitive. We compete with
others for property acquisitions and for opportunities to explore or to develop
and produce oil and natural gas. We have previously formed acquisition joint
ventures with several other companies, including Victoria Petroleum N.L. and
other affiliates, which have allowed us more access to acquisition candidates
and to share the evaluation costs with them. We face strong competition from
many companies and individuals with greater capital, financial resources and
larger technical staffs. We also face strong competition in procuring services
from a limited pool of laborers, drilling service contractors and equipment
vendors.
THE AMOUNT OF INSURANCE WE CARRY MAY NOT BE SUFFICIENT TO PROTECT US
The nature of the oil and gas business involves a variety of risks,
including, but not limited to, the risks of operating hazards such as fires,
explosions, cratering, blow-outs, adverse weather conditions, pollution and
environmental risks, encountering formations with abnormal pressures, and, in
horizontal wellbores, the increased risk of mechanical failure and collapsed
holes, the occurrence of any of which could result in substantial losses to us.
We, our partners, co-venturers and well operators maintain general liability
insurance again some, but not all, of these risks in amounts that management
believes to reasonable in accordance with customary oil and gas industry
practices. The occurrence of a significant event that is not fully insured,
however, could have a material adverse effect on our financial condition and
results of operations.
OUR SUCCESS MAY BE DEPENDENT ON OUR ABILITY TO RETAIN BARRY LASKER AND BOB PETT
AS KEY PERSONNEL
We believe that the oil and gas exploration and development and related
management experience of our key personnel is important to our success. The
active participation in Kestrel of Barry D. Lasker, our president, and Robert J.
Pett, our chairman, is a necessity for our continued operations. We do not have
any employment contracts with these individuals and we do not have key person
life insurance on their lives. We compete with bigger and better financed oil
and gas exploration companies for these individuals. Our future success may
depend on whether we can attract, retain and motivate highly qualified
personnel. We cannot assure you that we will be able to do so.
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OUR RESERVES ARE UNCERTAIN
Estimating our proved reserves involves many uncertainties, including
factors beyond our control. Our annual report on Form 10-KSB for fiscal year
2002 contained estimates of our oil and natural gas reserves and the future cash
flow to be realized from those reserves for fiscal years 2002, 2001 and 2000, as
prepared by Sproule Associates Inc., independent petroleum engineers. There are
uncertainties inherent in estimating quantities of proved oil and natural gas
reserves since petroleum engineering is not an exact science. Estimates of
commercially recoverable oil and gas reserves and of the future net cash flows
from them are based upon a number of variable factors and assumptions including:
o historical production from the properties compared with production
from other producing properties;
o the effects of regulation by governmental agencies;
o future oil and gas prices; and
o future operating costs, severance and excise taxes, abandonment costs,
development costs and workover and remedial costs.
GOVERNMENTAL REGULATION, ENVIRONMENTAL RISKS AND TAXES COULD ADVERSELY AFFECT
OUR OIL AND GAS OPERATIONS IN THE UNITED STATES
Our oil and natural gas operations in the United States are subject to
regulation by federal and state government, 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 injections, utilization, the maximum price
at which products could be sold, energy taxes and the discharge of materials
into the environment.
THE MARKET FOR OUR STOCK MAY BE HIGHLY VOLATILE
Our stock is currently traded on the Nasdaq SmallCap Market but there has
historically been a relatively low volume of trading in the shares.
Consequently, the price at which the shares trade may be highly volatile. In
addition, we were notified by The Nasdaq Stock Market, Inc. in a letter dated
February 14, 2002, that we do not presently meet all of the requirements for
continued listing on the SmallCap Market because our stock traded below the
minimum $1.00 per share requirement for 30 consecutive trading days. In a letter
dated August 14, 2002, The Nasdaq Stock Market notified us that although we had
still not met the above $1.00 per share requirement for the minimum 10
consecutive trading days, we did meet the initial listing requirement for
stockholders' equity. Therefore, we were provided with an additional 180
calendar days, or until February 10, 2003, to regain compliance with the $1.00
per share
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requirement. While our stock continues to trade on the SmallCap Market
today, even if the stock price does go above $1.00 for the minimum 10
consecutive trading days and eliminates the imminent threat of delisting, we
cannot guarantee that our stock will continue to be traded on Nasdaq in the
future. If delisting occurs, our stock could be traded on the OTC Bulletin Board
as long as we continue to file our reports with the SEC. Such a change, if it
occurs, would probably reduce the liquidity of our stock which, in turn, may
result in a lower trading price for the stock.
THE SALE OF THE SHARES BY THE SELLING SHAREHOLDERS COULD HAVE AN ADVERSE IMPACT
ON OUR STOCK
The selling shareholders are not restricted as to the price or prices at
which they may sell their shares. Sales of their shares at less than the market
prices may depress the market price of our stock. Moreover, the selling
shareholders are not restricted as to the number of shares which may be sold at
any one time, and it is possible that a significant number of shares could be
sold at the same time which may depress the market price of our stock. The
outstanding shares being offered by the selling shareholders represent
approximately 15.9% of our current outstanding shares.
FORWARD LOOKING STATEMENTS
This prospectus contains one or more statements, which state or otherwise
indicate the Company's present belief or expectation concerning future events.
Such statements are forward looking statements on which investors should not
rely because they are subject to a wide variety of contingencies and based on a
number of assumptions, which may not prove to be true. In particular, the
Company's future success is highly dependent on the success of its exploratory
drilling efforts, which cannot be safely predicted. In addition, the Company is
highly dependent upon prevailing prices for petroleum products, its ability to
attract and retain qualified personnel, as well as other risk factors affecting
business generally, such as overall economic conditions, changes in tax and
other laws and the effect of actions taken by competitors and regulatory
authorities. You should also remember that these statements are made only as of
the date of this prospectus and future events may cause them to be less likely
to prove to be true.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, special reports, proxy statements, and other
information with the Securities and Exchange Commission. You can read and copy
any document filed by us at the SEC's Public Reference Room, 450 Fifth Street
N.W., Washington, D.C. 20549. You may request copies of these documents, upon
payment of a duplicating fee, by writing the SEC at the address in the previous
sentence. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of its Public Reference Room. Our SEC filings are also available on
the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information from other
documents that we file with it, which means that we can disclose important
information by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents:
o our Annual Report on Form 10-KSB for the year ended June 30, 2002;
o our Quarterly Report on Form 10-QSB for the quarter ended September
30, 2002;
o the description of our securities contained in our registration
statement on Form 8-A, File No. 0-9261, filed on May 2, 1980 pursuant
to Section 12(g) of the Securities Exchange Act of 1934, and as
amended by our Form S-3, File No. 33-89716, declared effective on May
12, 1995;
o the description of our warrants distributed to our shareholders in
February 2000 contained in our registration statement on Form 8-A,
File No. 0-09261, filed on January 20, 2000 pursuant to Section 12(g)
of the Securities Exchange Act of 1934; and
o all documents and reports subsequently filed with the Commission by us
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and prior to the termination of this
offering of common stock.
You may request a copy of any of these documents, except exhibits to the
documents, unless they are specifically incorporated by reference, at no cost by
telephoning us (303) 295-0344 or writing us at the following address: Melissa
Temple, Kestrel Energy, Inc., 999 18th Street, Suite 2490, Denver, Colorado
80202.
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone else to provide you with
different information.
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OUR BUSINESS
Our principal business is the exploration for, and development of, oil and
gas reserves in the United States. In addition, we own working interests, which
are expense bearing interests, in proved developed producing and proved
undeveloped oil and gas leases that are not operated by us, in several areas in
the United States. Proved developed reserves are oil and gas reserves which can
be expected to be recovered through existing wells with existing equipment and
operating methods. Proved undeveloped reserves are oil and gas reserves which
can be expected to be recovered from new wells on undrilled acreage or from
existing wells where a relatively major expenditure is required for
recompletion. Normally we use existing working capital and cash flow for the
development of our exploration and development properties. However, we have in
the past obtained debt and equity financing to fund our development efforts and
expect to do so again in the future.
We presently own oil and gas interests in the states of Louisiana, New
Mexico, Oklahoma, Texas and Wyoming.
We were incorporated in Colorado on November 1, 1978 as Tanner Pruitt
Exploration, Inc. In March 1995, we changed our name to Kestrel Energy, Inc. Our
offices are located at 999 18th Street, Suite 2490, Denver, Colorado 80202, and
our telephone number is (303) 295-0344.
RECENT DEVELOPMENTS
In May 2001, we restructured our line of credit agreement with Wells Fargo
Bank West N.A. Under the prior terms, we had a borrowing base of $2,000,000 with
interest paid monthly. The new agreement lowered the borrowing base to
$1,400,000 and required us to reduce the principal balance on the line of credit
to $1,400,000 by October 31, 2001, the maturity date of the line of credit, with
interest on the outstanding balance paid monthly. As of October 31, 2001, the
principal balance was $1,396,000. Wells Fargo granted us an extension to
November 30, 2001 to restructure the line of credit and we subsequently agreed
to extend the line of credit for a further 12 months. As of June 30, 2002,
$516,000 was outstanding on the line of credit. The line of credit was secured
by deeds of trust on various oil and gas producing properties held by us. On
August 8, 2002, we paid $467,347.76 to Wells Fargo, which included the principal
balance, all accrued interest and legal fees, and terminated our agreement with
them. The funds we used to pay Wells Fargo were derived from a $500,000 loan
from one of our principal shareholders, Samson Exploration N.L.
For the loan, we issued a $500,000 demand promissory note to Samson
Exploration N.L. on August 6, 2002 bearing 10% interest. The note matured on
December 4, 2002 and now bears interest at a penalty rate of 12% while we seek
funding from other lenders. We agreed to pay a financing fee of $50,000 to
Samson for making the loan. The fee is payable in cash or, at Samson's election,
in free trading shares of Victoria Petroleum N.L. ("VP"). The price per share of
VP stock at which the financing fee would be paid is the net weighted average of
the closing price of the VP shares for the five trading days immediately
preceding the date we received the funds. According to the note, our obligation
to pay Samson is secured by a first lien on all of our current assets as well as
a possessory security interest in all of our 25,000,000 shares of VP stock.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
by the selling shareholders pursuant to this prospectus. We will receive
proceeds if the selling shareholders exercise their warrants to purchase shares
of our common stock. If all of the selling shareholders were to exercise their
warrants, we would receive gross proceeds of $1,761,250. When and if we receive
these funds, they will be used for general corporate purposes. As there is no
assurance that any or all of the warrants will be exercised, we are unable to
predict the amount to be used for such purposes.
SELLING SHAREHOLDERS
The shares offered pursuant to this prospectus have been or will be issued
to the selling shareholders (or their assignees) directly by us. The selling
shareholders purchased units consisting of common stock and warrants in a
private placement of our securities pursuant to a Private Placement Memorandum
dated January 10, 2002, under Regulation S to non-U.S. residents of Canada,
Europe and Australia, and under Regulation D to U.S. residents, all of which
were accredited investors as that term is defined in Rule 501(a) of the Act. We
agreed to file this registration statement for the resale of the shares
purchased in the offering, the sale of the warrants, and the shares underlying
the warrants. We agreed to bear all out-of-pocket expenses of this offering,
other than underwriting discounts and selling commissions. The selling
shareholders may sell none, some, or all of the common stock offered by them as
listed below.
The following table sets forth certain information with respect to the
beneficial ownership of shares of our common stock by the selling shareholders
as of the date of this prospectus and the number of shares which may be offered
pursuant to this prospectus for the account of each of the selling shareholders
or their transferees from time to time.
The table assumes:
o the exercise of all the unit warrants beneficially owned by the
selling shareholder at the exercise price and for the maximum number
of shares permitted as of the date of this prospectus;
o that each selling shareholder will sell all shares of common stock
offered pursuant to this prospectus, but not any other shares of
common stock or warrants beneficially owned by such shareholder; and
o that each selling shareholder will sell all the unit warrants to
purchase common stock offered pursuant to this prospectus.
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Shares Warrants Maximum Shares Shares Owned Warrants
Owned Owned To Be Sold After Offering Owned
Prior To Prior To In The -------------- After
Name Offering Offering Offering Number Percentage Offering
---- -------- -------- -------- ------ ---------- --------
Elstree Nominees Pty Ltd 515,000 515,000(1) 1,030,000(1) -0- -0- -0-
Samson Exploration N.L. 2,007,500 650,300 1,000,000 1,657,800 17.9% 150,300
James Capel (Nominees) Ltd. 300,000 300,000 600,000 -0- -0- -0-
Clodene Pty Ltd 30,000 30,000 60,000 -0- -0- -0-
Douglas Hall 20,000 20,000 40,000 -0- -0- -0-
Barry D. Lasker. 360,000(2) 20,000 40,000 340,000(2) 3.6% -0-
John Charles Grattan 10,000 10,000 20,000 -0- -0- -0-
Dianne Kathleen Hall 17,000 7,000 14,000 10,000 <1% -0-
Thomas Conn 5,000 5,000 10,000 -0- -0- -0-
Dunford Pty Ltd. 2,000 2,000 4,000 -0- -0- -0-
(1) By the terms of the warrant issued to Elstree Nominees Pty Ltd, the
warrant is only exercisable by Elstree if and to the extent that, on the
date of any exercise or attempt to exercise the warrant, Elstree is not
the beneficial owner (within the meaning ascribed to that term by Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and has
not been the beneficial owner of more than 8.99% of our common stock
(calculated as required by Section 13(d) of the Exchange Act) for a period
of 60 days prior to the date of such exercise or attempted exercise.
(2) Includes options to purchase 320,000 shares of common stock.
To the best of our knowledge, none of the selling shareholders has any
position, office or other material relationship with us or any of our affiliates
except as described below:
o Victoria International Petroleum N.L. is one of our principal
shareholders, is wholly owned by Victoria Petroleum N.L., and the
following directors of our company are also directors of both
companies - Timothy L. Hoops, Robert J. Pett and John T. Kopcheff
o Elstree Nominees Pty Ltd was issued units in exchange for previously
recorded advances, including interest thereon, previously made to us
by Victoria Petroleum N.L. after Victoria transferred that debt to
Elstree.
o Samson Exploration N.L. is one of our principal shareholders.
o Barry D. Lasker is currently our President and CEO and a member of our
Board of Directors.
PLAN OF DISTRIBUTION
The securities, shares of common stock and warrants, offered hereby may be
sold by the selling shareholders or by their respective pledgees, donees,
transferees or other successors in interest. Such sales may be made at fixed
prices that may be changed, at market prices
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prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The securities may be sold by one or more of
the following:
o one or more block trades in which a broker or dealer so engaged will
attempt to sell all or a portion of the shares held by the selling
shareholders as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchase by a broker or dealer as principal and resale by such broker
or dealer as principal and resale by such broker or dealer for its
account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o privately negotiated transactions between the selling shareholders and
purchasers without a broker-dealer.
The selling shareholder may effect such transactions by selling the
securities to or through broker-dealers, and such broker-dealers will receive
compensation in negotiated amounts in the form of discounts, concessions,
commission or fees from the selling shareholders and/or the purchasers of the
securities for whom such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). Such brokers or dealers or other participating
brokers or dealers and the selling shareholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, in connection
with such sales. Except for customary selling commissions in ordinary
transactions, any such underwriter or agent will be identified, and any
compensation paid to such persons will be described, in a prospectus supplement.
In addition, any securities covered by this prospectus that qualify for sale
pursuant to Rule 144 might be sold under Rule 144 rather than pursuant to this
prospectus.
To comply with some states' securities laws, if applicable, the securities
may be offered or sold by the selling shareholders in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in some states
the securities may not be offered or sold by the selling shareholders unless
they have been registered or qualified for sale in such states or an exemption
from registration or qualification is available and is complied with.
EXPERTS
The consolidated financial statements of Kestrel Energy, Inc. for the year
ended June 30, 2001 have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Kestrel Energy, Inc. as of June
30, 2002 have been incorporated by reference herein and in the registration
statement in reliance upon the report of Wheeler Wasoff, P.C., certified public
accounts, also incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
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LEGAL MATTERS
The validity of the common stock offered by this prospectus will be passed
upon for us by Davis Graham & Stubbs LLP, Denver, Colorado.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses to be incurred in
connection with the issuance of the securities being registered by us:
Registration Fee--Securities and Exchange Commission........$ 84
Nasdaq Notification Fee--The Nasdaq Stock Market, Inc.......$22,500
Printing and Mailing Costs and Fees.........................$ 1,000
Accountants' Fees and Expenses .............................$ 3,000
Legal Fees and Expenses.....................................$15,000
Miscellaneous...............................................$ 1,436
-------
Total Costs.................................................$43,000
=======
All of the above expenses except the SEC registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Colorado Business Corporation Act provides at Article 109 for
indemnification by a corporation of officers and directors in connection with
proceedings brought against them by reason of their position with the
corporation the person being indemnified must, in civil matters, have acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation. In criminal matters, indemnification
is permitted where the person had no reasonable cause to believe that his or her
conduct was unlawful. Indemnification is required (unless limited by a
corporation's Articles of Incorporation) where the officer or director is wholly
successful, on the merits or otherwise, in the defense of any proceeding. The
Act also establishes procedures by which persons seeking indemnification can
obtain cost advances from the corporation and procedures by which
indemnification determinations can be made.
Article VI of our Amended and Restated Articles of Incorporation requires
us to indemnify to the fullest extent permitted by applicable law against all
liability and expense, including attorneys' fees, incurred by reason of the fact
that a person is or was a director or officer of our company.
Article V of our Amended and Restated Bylaws contains provisions requiring
indemnification by us of officers and directors where the person seeking
indemnification acted in good faith and in a manner reasonably believed to be in
the best interest of our company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Indemnification by us is also required in connection with derivative actions
where the party seeking indemnification is found to have acted in good faith and
in a manner he reasonably believed to be in the best interest of our company.
Finally, indemnification is required where the officer or director seeking
indemnification has been successful on the merits in the
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defense of the action. The Bylaws also contain provisions setting forth
procedures by which parties seeking indemnification may obtain payment in
advance of expenses incurred by them.
The above discussion of the Colorado Business Corporation Act, our Amended
and Restated Articles of Incorporation and our Amended and Restated Bylaws is
intended to be only a summary and is qualified in its entirety by the full text
of each of the foregoing.
ITEM 16. EXHIBITS
3.1 Amended and Restated Articles of Incorporation, as filed with the
Secretary of State of Colorado on March 16, 1995, filed as Exhibit
(3)1 to the Annual Report on Form 10-K/A for the fiscal year ended
June 30, 1994 and incorporated herein by reference.
3.2 Amended and Restated Bylaws, as adopted by the Board of Directors on
January 16, 1995, filed as Exhibit (3)2 to the Annual Report on Form
10-K/A for the fiscal year ended June 30, 1994 and incorporated
herein by reference.
4.1 The form of common stock share certificate filed as Exhibits 5.1 to
the Registrant's Form S-2 Registration Statement (No. 2-65317) and
Article II of the Registrant's Articles of Incorporation filed as
Exhibit 4.1 thereto, as amended on March 4, 1994 and filed with the
Annual Report on Form 10-K/A for the fiscal year ended June 30, 1994
and incorporated herein by reference.
4.2* That portion entitled "Selling Restrictions" of the Registrant's
Private Placement Memorandum dated January 10, 2002.
5* Opinion of Davis Graham & Stubbs LLP.
23.1 Consent of KPMG LLP.
23.2* Consent of Davis Graham & Stubbs LLP is contained in its opinion
filed as Exhibit 5.
23.3 Consent of Wheeler Wasoff, P.C.
23.4 Consent of Sproule Associates Inc.
99* Promissory Note with Samson Exploration N.L. dated August 6, 2002.
*Previously filed.
ITEM 17. UNDERTAKINGS
We undertake:
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(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) 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;
and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by us pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in the registration statement.
(b) 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.
(c) 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.
(d) For the purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as a part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be a part of this registration statement as of
the time it was declared effective.
(e) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus 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.
(f) We hereby undertake that, for purposes of determining any liability
under the Securities Act, each filing of our annual report pursuant to section
13(a) or section 15(d) of the Exchange Act, and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
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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Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have 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 us of expenses incurred or paid by a director, officer or
controlling person of our company in the successful defense of any action, suit
or proceeding, is asserted by that director, officer or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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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 City of Denver, State of Colorado, on the 28th day of January,
2003.
KESTREL ENERGY, INC.
By:/S/BARRY D. LASKER
---------------------------------
Barry D. Lasker, President and
Chief Executive Officer
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:
Signatures Title Date
---------- ----- ----
/S/BARRY D. LASKER President, Chief January 28, 2003
------------------------- Executive Officer,
Barry D. Lasker Principal Executive
Officer, Principal
Financial and Accounting
Officer and Director
/S/TIMOTHY L. HOOPS Director January 28, 2003
-------------------------
Timothy L. Hoops
/S/ROBERT J. PETT Chairman of the Board January 28, 2003
-------------------------
Robert J. Pett
/S/JOHN T. KOPCHEFF Director January 28, 2003
-------------------------
John T. Kopcheff
/S/KENNETH W. NICKERSON Director January 28, 2003
-------------------------
Kenneth W. Nickerson
/S/MARK A.E. SYROPOULO Director January 28, 2003
-------------------------
Mark A.E. Syropoulo
Director January __, 2003
-------------------------
Neil T. MacLachlan