Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PYR ENERGY CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation or Organization)
95-4580642
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(I.R.S. Employer Identification No.)
1675 Broadway, Suite 2450
Denver, CO 80202
(303) 825-3748
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(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
D. Scott Singdahlsen
1675 Broadway, Suite 2450
Denver, CO 80202
(303) 991-0173
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(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
Copies to:
Alan L. Talesnick, Esquire
Donna J. Bloomer, Esquire
Patton Boggs LLP
1660 Lincoln Street, Suite 1900
Denver, Colorado 80264
(303) 830-1776
Approximate date of commencement of proposed sale to the public: As soon as
practicable after effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
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
Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered (2) share (4) price registration fee
----------------------- ------------- ------------------ ------------------ -----------------
Common Stock, par
value $.001(1) 6,327,250(3) $1.27 $8,035,608 $859.81
TOTAL 6,327,250 $8,035,608 $859.81
(1) Consists of shares held by certain selling stockholders.
(2) Includes shares underlying warrants to purchase 52,250 shares of common
stock which were issued to one of the selling stockholders in consideration
for assisting the Company with fundraising.
(3) Pursuant to Rule 416 under the Securities Act of 1933, as amended, this
registration statement also covers such additional shares of common stock
as may be issued as a result of stock splits, dividends, and combinations.
(4) The proposed maximum offering price per share is estimated solely for the
purpose of calculating the registration fee pursuant to Rule 457 under the
Securities Act of 1933 based upon the average of the high and low sales
prices of the Registrant's common stock as reported on the American Stock
Exchange on December 7, 2005.
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 the Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. The
stockholders 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 it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS DATED DECEMBER 13, 2005
SUBJECT TO COMPLETION
PYR ENERGY CORPORATION
6,327,250 Shares of Common Stock
This prospectus relates to the sale by certain of our stockholders,
referred to as the "Selling Stockholders", of up to 6,327,250 shares of our
common stock which they own or which they may acquire pursuant to the exercise
of warrants to purchase common stock which they own. We will not receive any
proceeds from the sale of any shares by the Selling Stockholders.
Our common stock is quoted on the American Stock Exchange under the symbol
"PYR." On December 7, 2005, the closing sale price of our common stock was $1.24
per share.
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These securities are speculative and involve a high degree of risk. You
should consider carefully the "Risk Factors" beginning on Page 2 of this
prospectus before making a decision to purchase our stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is __________, 2005
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY...........................................................1
RISK FACTORS.................................................................2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS....................8
USE OF PROCEEDS..............................................................8
DIVIDEND POLICY..............................................................8
SELLING STOCKHOLDERS.........................................................9
PLAN OF DISTRIBUTION........................................................11
LEGAL MATTERS...............................................................12
EXPERTS.....................................................................12
SECURITIES AND EXCHANGE COMMISSION POSITION ON CERTAIN INDEMNIFICATION.....12
WHERE YOU CAN FIND MORE INFORMATION.........................................13
INCORPORATION OF INFORMATION WE FILE WITH THE SEC...........................13
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. If anyone
provides you with different information, you should not rely on it. You should
assume that the information contained in this prospectus is accurate only as of
the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
Unless the context otherwise requires, references in this prospectus to the
"Company", "we", "us" or "ours" refer to PYR Energy Corporation, a Maryland
corporation.
-i-
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this
prospectus. You should read the entire prospectus carefully before making an
investment decision.
Overview
PYR Energy Corporation (referred to as "PYR," the "Company," "we," "us" and
"our") is an independent oil and gas exploration and production company, engaged
in the exploration, development and acquisition of crude oil and natural gas
reserves. Our current focus is on the Rocky Mountain, Texas and Gulf Coast
regions. During the fiscal years ended August 31, 2005 and 2004, we focused our
exploration efforts on the drilling phase of our high potential exploration
projects in the Rocky Mountain and Gulf Coast regions.
The Company was incorporated in March 1996 in the state of Delaware under
the name Mar Ventures Inc. Effective as of August 6, 1997, the Company purchased
all the ownership interests of PYR Energy, LLC, an oil and gas exploration
company. On November 12, 1997, the name of the Company was changed to PYR Energy
Corporation. Effective July 2, 2001, the Company was re-incorporated in Maryland
through the merger of the Company into a wholly owned subsidiary, PYR Energy
Corporation, a Maryland corporation. On February 18, 2004, PYR Cumberland LLC,
PYR Mallard LLC, and PYR Pintail LLC were formed as wholly owned subsidiaries of
PYR Energy Corporation. The purpose of these entities is to own and develop
certain assets related to designated individual exploration projects.
Company Offices
Our offices are located at 1675 Broadway, Suite 2450, Denver, Colorado
80202. The telephone number is (303) 825-3748, the facsimile number is (303)
825-3768 and the Company's web site is www.pyrenergy.com. The Company's periodic
and current reports filed with the Securities and Exchange Commission (the
"SEC") can be found on the Company's website at www.pyrenergy.com and on the
SEC's website at www.sec.gov.
Key Terms of this Offering
By means of this prospectus, a number of our stockholders are offering to
sell up to an aggregate of 6,327,250 shares of common stock, including common
stock that they may acquire through the exercise of certain warrants to purchase
shares of our common stock that they own. In this prospectus, we refer to these
persons as the "Selling Stockholders". We will not receive any of the proceeds
from the sales of shares by these Selling Stockholders. We will pay for the cost
of registering the Stockholders' Shares being offered under this prospectus (the
"Offering").
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RISK FACTORS
You should carefully consider each of the following risk factors and all of the
other information provided in this prospectus before purchasing our common
stock. The risks described below are those we currently believe may materially
affect us. An investment in our common stock involves a high degree of risk, and
should be considered only by persons who can afford the loss of their entire
investment.
Risks Related to Our Business
We have a limited operating history in the oil and gas business. Our
operations to date have consisted solely of evaluating geological and
geophysical information, acquiring acreage positions, generating exploration
prospects, and drilling a limited number of wells. We currently have nine
full-time employees. Our future financial results depend primarily on (1) our
ability to discover commercial quantities of oil and gas; (2) the market price
for oil and gas; (3) our ability to continue to generate potential exploration
prospects; and (4) our ability to fully implement our exploration and
development program. We cannot predict that our future operations will be
profitable. In addition, our operating results may vary significantly during any
financial period. These variations may be caused by significant periods of time
between discovery and development of oil or gas reserves, if any, in commercial
quantities.
Our cash resources are not unlimited. We need to increase our sources of
revenue and/or funding in order to sustain operations for the long run. There is
no assurance that this will occur.
We may not discover commercially productive reserves. Our future success
depends on our ability to economically locate oil and gas reserves in commercial
quantities. Except to the extent that we acquire properties containing proved
reserves or that we conduct successful exploration and development activities,
or both, our proved reserves, if any, will decline as reserves are produced. Our
ability to locate reserves is dependent upon a number of factors, including our
participation in multiple exploration projects and our technological capability
to locate oil and gas in commercial quantities. We cannot predict that we will
have the opportunity to participate in projects that economically produce
commercial quantities of oil and gas in amounts necessary to meet our business
plan or that the projects in which we elect to participate will be successful.
There can be no assurance that our planned projects will result in significant
reserves or that we will have future success in drilling productive wells at
economical reserve replacement costs.
Exploratory drilling is an uncertain process with many risks. Exploratory
drilling involves numerous risks, including the risk that we will not find any
commercially productive oil or gas reservoirs. The cost of drilling, completing
and operating wells is often uncertain, and a number of factors can delay or
prevent drilling operations, including:
o unexpected drilling conditions,
o pressure or irregularities in formations,
o equipment failures or accidents,
o adverse weather conditions,
o compliance with governmental requirements,
o shortages or delays in the availability of drilling rigs and the
delivery of equipment, and
o shortages of trained oilfield service personnel.
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Our future drilling activities may not be successful, nor can we be sure
that our overall drilling success rate or our drilling success rate for
activities within a particular area will not decline. Unsuccessful drilling
activities could have a material adverse effect on our results of operations and
financial condition. Also, we may not be able to obtain any options or lease
rights in potential drilling locations that we identify. Although we have
identified a number of potential exploration projects, we cannot be sure that we
will ever drill them or that we will produce oil or gas from them or any other
potential exploration projects.
Our exploration and development activities are subject to reservoir and
operational risks. Even when oil and gas is found in what is believed to be
commercial quantities, reservoir risks, which may be heightened in new
discoveries, may lead to increased costs and decreased production. These risks
include the inability to sustain deliverability at commercially productive
levels as a result of decreased reservoir pressures, large amounts of water, or
other factors that might be encountered. As a result of these types of risks,
most lenders will not loan funds secured by reserves from newly discovered
reservoirs, which would have a negative impact on our future liquidity.
Operational risks include hazards such as fires, explosions, craterings,
blowouts (such as the blowout experienced at our initial exploratory well),
uncontrollable flows of oil, gas or well fluids, pollution, releases of toxic
gas and encountering formations with abnormal pressures. In addition, we may be
liable for environmental damage caused by previous owners of property we own or
lease. As a result, we may face substantial liabilities to third parties or
governmental entities, which could reduce or eliminate funds available for
exploration, development or acquisitions or cause us to incur substantial
losses.
We expect to maintain insurance against some, but not all, of the risks
associated with drilling and production in amounts that we believe to be
reasonable in accordance with customary industry practices. The occurrence of a
significant event, however, that is not fully insured could have a material
adverse effect on our financial condition and results of operations.
Our operations require large amounts of capital. Our current development
plans will require us to make large capital expenditures for the exploration and
development of our oil and gas projects. Under our current capital expenditure
budget, we expect to spend between $7.5 and $10.0 million on exploration and
development activities during our fiscal year ending August 31, 2006. Also, we
must secure substantial capital to explore and develop our other potential
projects. Historically, we have funded our capital expenditures through the
issuance of equity. Volatility in the price of our common stock, which may be
significantly influenced by our drilling and production activity, may impede our
ability to raise money quickly, if at all, through the issuance of equity at
acceptable prices. Future cash flows and the availability of financing will be
subject to a number of variables, such as:
o our success in locating and producing reserves in other projects,
o the level of production from existing wells, and
o prices of oil and gas.
Issuing equity securities to satisfy our financing requirements could cause
substantial dilution to our existing stockholders. Debt financing, if obtained,
could lead to:
o a substantial portion of our operating cash flow being dedicated to
the payment of principal and interest,
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o our being more vulnerable to competitive pressures and economic
downturns, and
o restrictions on our operations.
If our revenues were to decrease due to lower oil and gas prices, decreased
production or other reasons, and if we could not obtain capital through a credit
facility or otherwise, our ability to execute our development plans, obtain and
replace reserves, or maintain production levels could be greatly limited.
We depend heavily on exploration success and subsequent success in
developing our exploration projects. Our future growth plans rely heavily on
discovering reserves and initiating production in the Texas, Gulf Coast and in
the Rocky Mountains. Our development plan includes the need to discover reserves
and establish commercial production through exploratory drilling and development
of our existing properties. We cannot be sure, though, that our planned projects
will lead to significant reserves that can be economically extracted or that we
will be able to drill productive wells at anticipated finding and development
costs. If we are able to record reserves, our reserves will decline as they are
depleted, except to the extent that we conduct successful exploration or
development activities or acquire other properties containing proved reserves.
We depend on industry alliances. We attempt to limit financial exposure on
a project-by-project basis by forming industry alliances where our technical
expertise can be complemented with the financial resources and operating
expertise of more established companies. Although entering into these alliances
limits our financial exposure, it also limits our potential revenue from
successful projects. Industry alliances also have the potential to expose us to
uncertainty if our industry partners are acquired or have priorities in areas
other than our projects. Despite these risks, we believe that if we are not able
to form industry alliances, our ability to fully implement our business plan
could be limited, which could have a material adverse effect on our business.
Our non-operator status limits our control over our oil and gas projects.
We focus primarily on creating exploration opportunities and forming industry
alliances to develop those opportunities. As a result, we have only a limited
ability to exercise control over a significant portion of a project's operations
or the associated costs of those operations. The success of a project is
dependent upon a number of factors that are outside our areas of expertise and
control. These factors include:
o the availability of leases with favorable terms and the availability
of required permitting for projects,
o the availability of future capital resources to us and the other
participants to be used for purchasing leases and drilling wells,
o the approval of other participants for the purchasing of leases and
the drilling of wells on the projects, and
o the economic conditions at the time of drilling, including the
prevailing and anticipated prices for oil and gas.
Our reliance on other project participants and our limited ability to
directly control project costs could have a material adverse effect on our
expected rates of return.
Oil and gas prices are volatile and an extended decline in prices could
hurt our business prospects. Our future profitability and rate of growth and the
anticipated carrying value of our oil and gas properties will depend heavily on
then prevailing market prices for oil and gas. We expect the markets for oil and
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gas to continue to be volatile. If we are successful in continuing to establish
production, any substantial or extended decline in the price of oil or gas
could:
o have a material adverse effect on our results of operations,
o limit our ability to attract capital,
o make the formations we are targeting significantly less attractive
economically,
o reduce our cash flow and borrowing capacity, and
o reduce the value and the amount of any future reserves.
Various factors beyond our control will affect prices of oil and gas,
including:
o worldwide and domestic supplies of oil and gas,
o the ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls,
o political instability or armed conflict in oil or gas producing regions,
o the price and level of foreign imports,
o worldwide economic conditions,
o marketability of production,
o the level of consumer demand,
o the price, availability and acceptance of alternative fuels,
o the availability of processing and pipeline capacity,
o weather conditions, and
o actions of federal, state, local and foreign authorities.
These external factors and the volatile nature of the energy markets make
it difficult to estimate future prices of oil and gas. In addition, sales of oil
and gas are seasonal in nature, leading to substantial differences in cash flow
at various times throughout the year.
Accounting rules may require write-downs. Under full cost accounting rules,
capitalized costs of proved oil and gas properties may not exceed the present
value of estimated future net revenues from proved reserves, discounted at 10%.
Application of the ceiling test generally requires pricing future revenue at the
unescalated prices in effect as of the end of each fiscal quarter and requires a
write-down for accounting purposes if the ceiling is exceeded. If a write-down
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is required, it would result in a charge to earnings, but would not impact cash
flow from operating activities. Once incurred, a write-down of oil and gas
properties is not reversible at a later date.
We face risks related to title to the leases we enter into that may result
in additional costs and affect our operating results. It is customary in the oil
and gas industry to acquire a leasehold interest in a property based upon a
preliminary title investigation. In many instances, our partners have acquired
rights to the prospective acreage and we have a contractual right to have our
interests in that acreage assigned to us. In some cases, we are in the process
of having those interests so assigned. If the title to the leases acquired is
defective, or title to the leases one of our partners acquires for our benefit
is defective, we could lose the money already spent on acquisition and
development, or incur substantial costs to cure the title defect, including any
necessary litigation. If a title defect cannot be cured or if one of our
partners does not assign to us our interest in a lease acquired for our benefit,
we will not have the right to participate in the development of or production
from the leased properties. In addition, it is possible that the terms of our
oil and gas leases may be interpreted differently depending on the state in
which the property is located. For instance, royalty calculations can be
substantially different from state to state, depending on each state's
interpretation of lease language concerning the costs of production. We cannot
guarantee that there will not be litigation concerning the proper interpretation
of the terms of our leases. Adverse decisions in any litigation of this kind
could result in material costs or the loss of one or more leases.
Limitations on the Effectiveness of Controls. Our management, including our
Chief Executive Officer and Chief Financial Officer, does not expect that our
disclosure controls or our internal controls will prevent all possible error or
fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Further the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within our company have been
detected. These inherent limitations include the realities that judgments in
decision making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.
Our industry is highly competitive and many of our competitors have more
resources than we do. We compete in oil and gas exploration with a number of
other companies. Many of these competitors have financial and technological
resources vastly exceeding those available to us. We cannot be sure that we will
be successful in acquiring and developing profitable properties in the face of
this competition. In addition, from time to time, there may be competition for,
and shortage of, exploration, drilling and production equipment. These shortages
could lead to an increase in costs and delays in operations that could have a
material adverse effect on our business and our ability to develop our
properties. Problems of this nature also could prevent us from producing any oil
and gas we discover at the rate we desire to do so.
Technological changes could put us at a competitive disadvantage. The oil
and gas industry is characterized by rapid and significant technological
advancements and introductions of new products and services using new
technologies. As new technologies develop, we may be placed at a competitive
disadvantage, and competitive pressures may force us to implement those new
technologies at a substantial cost. If other oil and gas exploration and
development companies implement new technologies before we do, those companies
may be able to provide enhanced capabilities and superior quality compared with
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what we are able to provide. We may not be able to respond to these competitive
pressures and implement new technologies on a timely basis or at an acceptable
cost. If we are unable to utilize the most advanced commercially available
technologies, our business could be materially and adversely affected.
Our industry is heavily regulated. Federal, state and local authorities
extensively regulate the oil and gas industry. Legislation and regulations
affecting the industry are under constant review for amendment or expansion,
raising the possibility of changes that may affect, among other things, the
pricing or marketing of oil and gas production. State and local authorities
regulate various aspects of oil and gas drilling and production activities,
including the drilling of wells (through permit and bonding requirements), the
spacing of wells, the unitization or pooling of oil and gas properties,
environmental matters, safety standards, the sharing of markets, production
limitations, plugging and abandonment, and restoration. The overall regulatory
burden on the industry increases the cost of doing business, which, in turn,
decreases profitability.
Our operations must comply with complex environmental regulations. Our
operations are subject to complex and constantly changing environmental laws and
regulations adopted by federal, state and local governmental authorities. New
laws or regulations, or changes to current requirements, could have a material
adverse effect on our business. We will continue to be subject to uncertainty
associated with new regulatory interpretations and inconsistent interpretations
between state and federal agencies. We could face significant liabilities to the
government and third parties for discharges of oil, natural gas, produced water
or other pollutants into the air, soil or water, and we could have to spend
substantial amounts on investigations, litigation and remediation. We cannot be
sure that existing environmental laws or regulations, as currently interpreted
or enforced, or as they may be interpreted, enforced or altered in the future,
will not have a material adverse effect on our results of operations and
financial condition.
Our business depends on transportation facilities owned by others. The
marketability of our anticipated gas production depends in part on the
availability, proximity and capacity of pipeline systems owned or operated by
third parties. Federal and state regulation of oil and gas production and
transportation, tax and energy policies, changes in supply and demand and
general economic conditions could adversely affect our ability to produce,
gather and transport oil and natural gas.
Attempts to grow our business could have an adverse effect. Because of our
small size, we desire to grow rapidly in order to achieve certain economies of
scale. Although there is no assurance that this rapid growth will occur, to the
extent that it does occur, it will place a significant strain on our financial,
technical, operational and administrative resources. As we increase our services
and enlarge the number of projects we are evaluating or in which we are
participating, there will be additional demands on our financial, technical and
administrative resources. The failure to continue to upgrade our technical,
administrative, operating and financial control systems or the occurrence of
unexpected expansion difficulties, including the recruitment and retention of
geoscientists and engineers, could have a material adverse effect on our
business, financial condition and results of operations.
We may not be able to retain our listing on the American Stock Exchange.
The American Stock Exchange has certain listing requirements in order for a
company to continue to have its securities traded on this exchange. A company
may risk delisting if its common stock trades at a low price per share for a
substantial period of time. Should our stock trade at a low share price for a
substantial period of time, or our net tangible equity be below certain levels,
we may not be able to retain our listing.
We depend on key personnel. We are highly dependent on the services of D.
Scott Singdahlsen, our President and Chief Executive Officer, and our other
geological and geophysical staff members. The loss of the services of any of
these persons could have a material negative impact on our business. We do not
have an employment contract with Mr. Singdahlsen or any other employee.
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Risks Related to this Prospectus and Our Common Stock
Sales of a substantial number of shares in the Offering may result in
significant downward pressure on the price of our common stock and could affect
the ability of our stockholders to realize the current trading price of our
common stock. This registration statement covers the resale of 6,327,250 shares
of common stock that were previously restricted. As a result, the number of
shares of our common stock eligible to be immediately sold in the market will
increase significantly upon the effectiveness of this registration statement. If
the Selling Stockholders sell significant amounts of our stock, our stock price
could drop. Even a perception by the market that the Selling Stockholders will
sell in large amounts after the registration statement is effective could place
significant downward pressure on our stock price.
Our board of directors can cause us to issue preferred stock with rights
that are preferential to, and could cause a decrease in the value of, our common
stock. Our board of directors may issue up to one million shares of preferred
stock without action by our stockholders. Rights or preferences could include,
among other things:
o The establishment of dividends which must be paid prior to declaring
or paying dividends or other distributions to our common stockholders;
o Greater or preferential liquidation rights which could negatively
affect the rights of common stockholders, and
o The right to convert the preferred stock at a rate or price which
would have a dilutive effect on the outstanding shares of common
stock.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the materials incorporated herein by reference contain
forward-looking statements, including statements regarding, among other items,
our business and growth strategies, anticipated trends in our business and our
future results of operations, market conditions in the oil and gas industry, our
ability to make and integrate acquisitions, the outcome of litigation, if any,
and the impact of governmental regulation. These forward-looking statements are
based largely on our expectations and are subject to a number of risks and
uncertainties, many of which are beyond our control. Actual results could differ
materially from these forward-looking statements as a result of, among other
things:
o failure to obtain, or a decline in, oil or gas production, or a
decline in oil or gas prices,
o incorrect estimates of required capital expenditures,
o increases in the cost of drilling, completion and gas collection or
other costs of production and operations,
o an inability to meet growth projections, and
o other risk factors set forth under "Risk Factors" in this prospectus.
In addition, the words "believe," "may," "could," "will," "when,"
"estimate," "continue," "anticipate," "intend," "expect" and similar
expressions, as they relate to PYR, our business or our management,
are intended to identify forward-looking statements.
USE OF PROCEEDS
The Selling Stockholders will be selling all of the shares under this
prospectus in the Offering. The proceeds from the sale of the shares will be
received directly by the Selling Stockholders. We will receive no proceeds from
the sale of the shares offered by Selling Stockholders under this prospectus.
DIVIDEND POLICY
We have never paid cash dividends and have no plans to do so in the
foreseeable future. Our future dividend policy will be determined by our board
of directors and will depend upon a number of factors, including our financial
condition and performance, our cash needs and expansion plans, income tax
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consequences, and the restrictions that applicable laws, our current preferred
stock instruments, and our future credit arrangements may then impose.
SELLING STOCKHOLDERS
The shares covered by this prospectus are being offered by the named
Selling Stockholders below. The Selling Stockholders may from time to time offer
and sell pursuant to this prospectus up to an aggregate of 6,327,250 shares of
our common stock.
All of the individuals and/or entities listed below participated in a
private placement which commenced on or about September 29, 2005, pursuant to
which we sold a total of 6,275,000 shares of common stock at a price per share
of $1.30. In connection with the private placement, we agreed to issue warrants
to purchase a total of 52,250 shares to a entity which assisted us with the
private placement at an exercise price of $1.42 per share and the shares
underlying these warrants are also covered by this prospectus. In addition, we
agreed to pay placement fees of $102,375.
In connection with the private placement, we agreed to prepare and file at
our expense, within 75 days of the first closing of the offering, a registration
statement with the Securities and Exchange Commission covering the resale of the
shares of common stock sold in the private placement, and the shares of common
stock underlying the warrants issued in connection with the private placement.
The following table sets forth the following, with respect to the Selling
Stockholders:
o The number of shares of common stock beneficially owned as of December
7, 2005 and prior to the offering contemplated hereby,
o The number of shares of common stock eligible for resale and to be
offered by each Selling Stockholder pursuant to this prospectus,
o The number of shares owned by each Selling Stockholder after the
offering contemplated hereby assuming that all shares eligible for
resale pursuant to this prospectus actually are sold,
o The percentage of our outstanding shares of common stock beneficially
owned by each Selling Stockholder after the offering contemplated
hereby, and
o In notes to the table, any relationships, excluding non-executive
employee and other non-material relationships, that a Selling
Stockholder had during the past three years with the registrant or any
of its predecessors or affiliates.
9
Percentage of
Outstanding
Number of Shares Shares of
of Common Stock Number of Shares Number of Shares Common Stock
Owned Before To Be Offered (A) Owned After Owned After
Selling Stockholders Offering (B) Offering Offering
--------------------------------------- ---------------- ----------------- ---------------- --------------
J. Caird Partners, L.P. (1) 1,344,600 1,344,600 0 *
J. Caird Investors (Bermuda) L.P. (1) 1,472,600 1,472,600
Raytheon Master Pension Trust(1) 426,100 426,100 0 *
WTC-CIF Unconvential Value Portfolio(1) 300,100 300,100 0 *
WTC-CTF Unconventional Value
Portfolio(1) 352,200 352,200 0 *
Figaro Investments Ltd(1) 104,400 104,400 0 *
***
Adage Capital Partners, L.P. 500,000 500,000 0
Red Barn Capital, Inc. 25,000 25,000 0 *
James W. Gorman 600,000 300,000 300,000 *
James E. Moore, Trustee of the James
E. Moore Revocable Trust dated July
28, 1994 50,000 50,000 0 *
Alan L. Talesnick(2) 59,000 25,000 34,000 *
David E. Brody(2) 25,000 25,000 0 *
Estancia Petroleum Corporation(3) 102,675 50,000 52,675 *
Kenneth R. and Leslie A. Berry Trust(3) 22,900 20,000 2,900 *
Revocable Living Trust of Kenneth R
Berry Sr. and Mary Ione Berry dated
March 16th, 1992 10,000 10,000 0 *
Stephen A. Talesnick 25,000 25,000 0 *
BFS US Special Opportunities Trust PLC 250,000 250,000 0 *
Renaissance US Growth Investment Trust
PLC 250,000 250,000 0 *
Ironman Energy Capital, L.P. 1,416,200 150,000 1,266,200 3.3%
Hal R. Pettigrew 250,000 250,000 0 *
H Fork LP 200,000 200,000 0 *
Michael David Starcher 50,000 50,000 0 *
Ronald W. Cochran Trust 10,000 10,000 0 *
Oldham Properties, Ltd. 20,000 20,000 0 *
Bruce E. Lazier 15,000 15,000 0 *
William D. Forster (4) 52,787 50,000 2,787 *
Stonington Corporation(4) 52,250(5) 52,250 0 *
--------- --------- ---
Totals 6,327,250 1,624,562 3.3%
========= ========= ===
10
-----------------------
* Less than one percent
(A) The number of shares of common stock to be sold assumes that the Selling
Stockholder elects to sell all of the shares of common stock held by the
Selling Stockholder that are covered by this prospectus.
(B) It is our understanding that any Selling Stockholder that is an affiliate
of a broker-dealer purchased in the ordinary course of business, and that
at the time of the purchase, had no agreements or understanding to
distribute the securities.
-----------------------
(1) These entities are clients of Wellington Management Company, LLP.
("Wellington"). Wellington, in its capacity as investment adviser, may
be deemed to beneficially own 5,307,500 shares of the Issuer which are
held of record by clients of Wellington. These entities have the right
to receive, or the power to direct the receipt of, dividends from, or
the proceeds from the sale of, the securities set forth opposite their
respective names.
(2) Partner of Patton Boggs LLP, legal counsel to the Company.
(3) Kenneth R. Berry is an executive officer of the Company. Mr. Berry
owns all the outstanding equity interests in Estancia Corporation and
is a Trustee and Beneficiary of the Kenneth R. Berry, Jr. and Leslie
A. Berry Trust.
(4) Stonington Corporation, a broker-dealer registered with the National
Association of Securities Dealers, assisted the Company in
fundraising. William D. Forster is an affiliate of Stonington
Corporation.
(5) Includes 52,500 shares underlying currently exercisable warrants to
purchase common stock at a price per share of $1.42 until October 14,
2010.
PLAN OF DISTRIBUTION
The Selling Stockholders are offering up to 6,327,250 shares of common
stock. It is possible that the increase in shares on the market will have a
negative effect on the resale price of our shares and may make it difficult for
purchasers in the Offering to resell the shares at a profit or at all. The
Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
on any stock exchange, market or trading facility on which the shares are traded
or in private transactions. These sales may be at fixed or negotiated prices.
The Selling Stockholders also may sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. The Selling
Stockholders may engage in short sales against the box, puts and calls and other
transactions in our securities or derivatives of our securities, and may sell or
deliver shares in connection with these trades. The Selling Stockholders may
pledge their shares to their brokers under the margin provisions of customer
agreements. If a Selling Stockholder defaults on a margin loan, the broker may,
from time to time, offer and sell the pledged shares.
Broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from either the Selling Stockholders or, if any broker-dealer acts
as agent for the purchaser of shares, from the purchaser, in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
11
The Selling Stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with those sales. In that event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We are required, or have elected, to pay all fees and expenses incident to
the registration of the shares being registered herein. We are not required to
pay commissions and other selling expenses. We have agreed to indemnify certain
of the Selling Stockholders against losses, claims, damages and liabilities,
including liabilities under the Securities Act arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in the
registration statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission of a material fact necessary
to make the statements therein not misleading.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby
and other legal matters in connection herewith have been passed upon for us by
Patton Boggs LLP. Partners of Patton Boggs LLP own an aggregate of 84,000 shares
of the Company's common stock.
EXPERTS
The financial statements of PYR Energy Corporation appearing in our Annual
Report on Form 10-KSB for the fiscal years ended August 31, 2005 and 2004 have
been audited by HEIN & Associates LLP, independent auditors, as set forth in
their report included in the Annual Report and incorporated in this prospectus
by reference. The foregoing financial statements are incorporated in this
prospectus by reference in reliance upon the report of the independent auditors
and upon the authority of that firm as experts in auditing and accounting.
SECURITIES AND EXCHANGE COMMISSION
POSITION ON CERTAIN INDEMNIFICATION
The General Corporation Law of the State of Maryland (the "Maryland
Code") provides for mandatory indemnification against reasonable expenses
incurred by directors and officers of a corporation in connection with an
action, suit or proceeding brought by reason of their position as a director or
officer if they are successful, on the merits or otherwise, in defense of the
proceeding. The Maryland Code also allows a corporation to indemnify directors
or officers in such proceedings if the director or officer acted in good faith,
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, in the case of a criminal proceeding, he had no
reasonable cause to believe that his conduct was unlawful.
The Maryland Code permits a corporation to expand the rights to
indemnification by a provision in its bylaws, by an agreement, by resolution of
stockholders or directors not involved in the proceeding, or otherwise. However,
a corporation may not indemnify a director or officer if the proceeding was one
by or on behalf of the corporation and in the proceeding the director or officer
is adjudged to be liable to the corporation. Our Bylaws provide that we are
required to indemnify our directors and officers to the fullest extent permitted
by law, including those circumstances in which indemnification would otherwise
be discretionary.
12
In addition to the general indemnification described above, we have
adopted, in our articles of incorporation, a provision under the Maryland Code
that eliminates and limits certain personal liability of directors and officers
for monetary damages for breaches of the fiduciary duty of care.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, we have been informed that, in the opinion
of the SEC, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
we filed with the SEC under the Securities Act. This prospectus does not contain
all the information set forth in the registration statement and exhibits
thereto, and statements included in this prospectus as to the content of any
contract or other document referred to are not necessarily complete. For further
information, please review the registration statement and the exhibits and
schedules filed with the registration statement.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and we file quarterly reports,
current reports, proxy statements and other information with the SEC in
accordance with the Exchange Act. These reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In
addition, these materials filed electronically by the Company with the SEC are
available at the SEC's World Wide Web site at http://www.sec.gov. The SEC's
World Wide Web site contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC.
Information about the operation of the SEC's public reference facilities may be
obtained by calling the SEC at 1-800-SEC-0330.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with them, which means: incorporated documents are considered part of this
prospectus; we can disclose important information to you by referring to those
documents; and information we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below, which we filed with
the SEC under the Exchange Act:
o Our Annual Report on Form 10-KSB for the fiscal year ended August 31,
2005;
o Any documents filed under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this prospectus and prior to
the termination of the offering made under this prospectus; and
o The description of our common stock contained in our Form 8-A filed
with the SEC on December 7, 1999.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, upon written or
oral request, a copy of any or all of the documents referred to above that have
been incorporated in this prospectus by reference but not delivered with this
prospectus. Requests for copies should be directed to D. Scott Singdahlsen, PYR
Energy Corporation, 1675 Broadway, Suite 2450, Denver, CO 80202, telephone (303)
825-3748.
13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-----------------------------------------------------
The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection with
the registration of the securities being offered. The selling stockholders will
not pay any of the following expenses.
Type of Expense Amount
------------------------------- --------
Registration Fees $ 900
Transfer Agent Fees $ 1,000
Costs of Printing and Engraving $ 2,500*
Legal Fees $12,000*
Accounting Fees $ 2,500*
=======
Total $18,900
-------------
*estimated
Item 15. Indemnification of Directors and Officers.
---------------------------------------------------
Section 2-418 of the General Corporation Law of the State of Maryland (the
"Maryland Code") provides for mandatory indemnification against reasonable
expenses incurred by directors and officers of a corporation in connection with
an action, suit or proceeding brought by reason of their position as a director
or officer if they are successful, on the merits or otherwise, in defense of the
proceeding. In addition, a corporation may indemnify directors or officers in
such proceedings if the director or officer acted in good faith, in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in the case of a criminal proceeding, he had no reasonable
cause to believe that his conduct was unlawful.
The Maryland Code also permits a corporation to expand the rights to
indemnification by a provision in its bylaws, by an agreement, by resolution of
stockholders or directors not involved in the proceeding, or otherwise. However,
a corporation may not indemnify a director or officer if the proceeding was one
by or on behalf of the corporation and in the proceeding the director of officer
is adjudged to be liable to the corporation.
The Company's Bylaws provide that the Company is required to indemnify its
directors and officers to the fullest extent permitted by law, including those
circumstances in which indemnification would otherwise be discretionary. The
Company also has adopted, in its Articles of Incorporation, a provision under
Section 2-405.2 of the Maryland Code that eliminates and limits certain personal
liability of directors and officers for monetary damages for breaches of the
fiduciary duty of care.
We also currently have liability insurance for our directors and officers.
14
Item 16. Exhibits.
------------------
Exhibit No. Description
----------- --------------------------------------------------------------
4.1 Specimen Common Stock Certificate. Incorporated by reference
from the Company's Form 10-KSB/A1 for the year ended
August 31, 1997.
5.1* Opinion of Patton Boggs LLP regarding legality.
23.1* Consent of Hein & Associates LLP.
23.2* Consent of Patton Boggs LLP (included in the opinion regarding
legality set forth in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this
registration statement).
-----------------
*Filed herewith
Item 17. Undertakings.
----------------------
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the 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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
15
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the registration statement is on Form S-3,
and if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
and are incorporated by reference to the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on the 13th day of
December, 2005.
PYR ENERGY CORPORATION
By: /s/ D. Scott Singdahlsen
-------------------------------------------------
D. Scott Singdahlsen, Chief Executive Officer and
Chief Financial Officer.
By: /s/ Jane M. Richards
-------------------------------------------------
Jane M. Richards, Principal Accounting Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of the Registrant, by virtue of their signatures to this registration statement
appearing below, hereby constitute and appoint D. Scott Singdahlsen, with full
power of substitution, as attorney-in-fact in their names, place and stead to
execute any and all amendments to this registration statement in the capacities
set forth opposite their name and hereby ratify all that said attorney-in-fact
or his substitutes may do by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
----------------------------- ------------------------- ------------------
/s/ D. Scott Singdahlsen
----------------------------- Chief Executive Officer & December 13, 2005
D. Scott Singdahlsen Chief Financial Officer
/s/ Jane M. Richards Principal Accounting December 13, 2005
---------------------------- Officer
Jane M. Richards,
/s/ David Kilpatrick Chairman of the Board December 13, 2005
-----------------------------
David Kilpatrick
/s/ Bryce W. Rhodes Director December 13, 2005
-----------------------------
/s/ Dennis M. Swenson Director December 13, 2005
-----------------------------
17
EXHIBIT INDEX
(Attached To And Made A Part Of This Registration Statement On Form S-3
For PYR Energy Corporation. Dated December 13, 2005)
The following is a complete list of Exhibits filed as part of this Registration
Statement, which exhibits are incorporated by reference herein:
Exhibit No. Description
---------- --------------------------------------------------------------
4.1 Specimen Common Stock Certificate. Incorporated by reference
from the Company's Form 10-KSB/A1 for the year ended
August 31, 1997.
5.1* Opinion of Patton Boggs LLP regarding legality.
23.1* Consent of Hein & Associates LLP.
23.2* Consent of Patton Boggs LLP (included in the opinion regarding
legality set forth in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page of this
registration statement).
-----------------
*Filed herewith
18