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Delaware | 20-3126427 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Denver, Colorado 80202
Telephone: (720) 932-7800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Chief Executive Officer
Infinity Energy Resources, Inc.
633 Seventeenth Street, Suite 1800
Denver, Colorado 80202
Telephone: (720) 932-7800
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Michelle H. Shepston
Davis Graham & Stubbs LLP
1550 Seventeenth Street, Suite 500
Denver, Colorado 80202
Telephone: (303) 892-9400
box:þ
Proposed maximum | Proposed maximum | Amount of | ||||||||||||||||||||
Title of each class of | Amount to be | offering price per | aggregate offering price | registration fee | ||||||||||||||||||
securities to be registered | registered (1) (2) | share (3) | (3) | (4) | ||||||||||||||||||
Common Stock, $.0001 par value | 10,528,671 | $ | 3.95 | $ | 41,588,250 | $ | 2,800.00 | |||||||||||||||
(1) | Pursuant to Rule 416 of the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers such additional number of shares of common stock that may become issuable as a result of any stock splits, stock dividends, or other similar transactions. | |
(2) | Includes (i) 4,115,973 shares which have been, or may be, issued upon conversion of the senior secured notes of Infinity Energy Resources, Inc. (the “Company”), issued to the selling stockholders or their assignors in March 2006 and January, September and December 2005 and (ii) 6,412,698 shares representing 110% of the shares of common stock currently issuable upon exercise of warrants issued or assigned to certain selling stockholders, as amended by the Wavier and Amendment entered into by the Company and the selling stockholders on August 9, 2006 and as further amended by the October 2006 Waiver and Amendment Agreement entered into by the Company and the selling stockholders as of October 2, 2006. | |
(3) | Estimated solely for the purpose of computing the registration fee. The proposed maximum offering price per share and maximum aggregate offering price for the shares being registered hereby are calculated in accordance with Rule 457(c) under the Securities Act using the average of the high and low sales price per share of our common stock on October 2, 2006, as reported on the NASDAQ Global Market. | |
(4) | Pursuant to Rule 429 under the Securities Act, the prospectus included in this registration statement also relates to the securities registered on Form S-3, File No. 333-133071, filed on April 7, 2006 (the “Prior Registration Statement”), as to which 3,903,725 shares remain unsold as of October 2, 2006 and for which the registration fee was previously paid. |
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The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities pursuant to this prospectus until the registration statement filed with the Securities and Exchange Commission becomes effective. This prospectus is not an offer to sell these securities and neither Infinity Energy Resources, Inc. nor the selling stockholders are soliciting offers to buy these securities in any state where the offer or sale is not permitted.
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Opinion and Consent of Davis Graham & Stubbs LLP | ||||||||
Consent of Ehrhardt Keefe Steiner & Hottman PC | ||||||||
Consent of Netherland, Sewell & Associates, Inc. |
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• | Additional covenant violations, if any, or violations of the terms of the August Waiver , as amended by the October Waiver, could increase the principal amount of Notes and further accelerate our obligation to repay the Notes. | ||
• | We will need to use a portion of our cash flow to reduce trade payables, which will reduce the amount of cash we have available to use in our ongoing operations and to devote to capital projects. As a result of such cash flow constraints, we have released a drilling rig that had been scheduled to resume drilling for us in the Fort Worth Basin of Texas, which will negatively affect oil and natural gas production and earnings in the short run. | ||
• | Failure to fulfill our obligations under the Senior Secured Notes Facility could result in foreclosure on our assets or the initiation of bankruptcy proceedings. | ||
• | The amount of our accrued interest expense may increase because our borrowings are at a variable rate of interest, which, if interest rates increase, would result in higher interest expense. |
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• | we may have a higher level of debt than many of our competitors, which may place us at a competitive disadvantage; | ||
• | we may issue equity securities to repay indebtedness, which issuance could be at a discount to the market price, causing additional dilution to our stockholders; | ||
• | we may be more vulnerable to economic downturns and adverse developments in our industry; and | ||
• | our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate may be limited. |
• | prices for oil and gas we produce may be lower than expected; | ||
• | the capital, equipment, personnel or services required to develop the leases for production may not be available; | ||
• | we may not find oil and gas reserves in the quantities anticipated; | ||
• | the reserves we find may not produce oil and gas at the rates anticipated; | ||
• | the costs of producing oil and gas may be higher than expected; and | ||
• | we may encounter one or more of many operating risks associated with drilling for and producing oil and gas. |
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• | worldwide and domestic supplies of oil and gas; | ||
• | political instability or armed conflict in oil or gas producing regions; | ||
• | the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil prices; | ||
• | production controls; | ||
• | worldwide economic conditions; | ||
• | the price and level of foreign imports; | ||
• | marketability of production; | ||
• | the level of consumer demand; |
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• | the price, availability and acceptance of alternative fuels; | ||
• | the price, availability and capacity of commodity processing and gathering facilities, and pipeline transportation; | ||
• | weather conditions; and | ||
• | actions of federal, state, local and foreign authorities. |
• | impairing our financial condition, cash flows and liquidity; | ||
• | limiting our ability to finance planned capital expenditures; | ||
• | reducing our revenue, operating income and profitability; | ||
• | reducing our oil and gas reserve quantities; | ||
• | reducing the carrying value of our oil and natural gas properties; and | ||
• | reducing demand for our oilfield service business. |
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• | our production is less than expected; | ||
• | the counterparties to our contracts fail to perform under the contracts; or | ||
• | our production costs on the contracted production significantly increase. |
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• | the quality and quantity of available data; | ||
• | the interpretation of that data; | ||
• | the accuracy of various mandated economic assumptions; and | ||
• | the judgment of the persons preparing the estimate. |
• | the amount and timing of actual production; | ||
• | the price for which that oil and gas production can be sold; | ||
• | supply and demand for oil and natural gas; | ||
• | curtailments or increases in consumption by natural gas and oil purchasers; and |
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• | changes in government regulations or taxation. |
• | defects in title; | ||
• | the absence of producible quantities of oil and gas; | ||
• | insufficient formation attributes, such as porosity, to allow production; | ||
• | water production requiring disposal; and | ||
• | improperly pressured reservoirs from which to produce the reserves. |
• | availability and cost of equipment and transportation for the production | ||
• | demand for the oil and gas produced; and |
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• | price for the oil and gas produced. |
• | well blowouts; | ||
• | craterings; | ||
• | explosions; | ||
• | uncontrollable flows of oil, natural gas or well fluids; | ||
• | fires; | ||
• | formations with abnormal pressures; | ||
• | pipeline ruptures or spills; and | ||
• | releases of toxic gas and other environmental hazards and pollution. |
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• | unexpected drilling conditions; | ||
• | pressure or irregularities in formations; | ||
• | equipment failures or accidents; | ||
• | adverse weather conditions; | ||
• | defects in title; | ||
• | compliance with governmental requirements, rules and regulations; and | ||
• | shortages or delays in the availability of drilling rigs, the delivery of equipment and adequate trained personnel. |
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• | land use restrictions; | ||
• | drilling bonds and other financial responsibility requirements; | ||
• | spacing of wells; | ||
• | emissions into the air; | ||
• | unitization and pooling of properties; | ||
• | habitat and endangered species protection, reclamation and remediation; | ||
• | the containment and disposal of hazardous substances, oil field waste and other waste materials; | ||
• | the use of underground storage tanks; | ||
• | the use of underground injection wells, which affects the disposal of water from our wells; |
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• | safety precautions; | ||
• | the prevention of oil spills; | ||
• | the closure of production facilities; | ||
• | operational reporting; and | ||
• | taxation. |
• | personal injuries; | ||
• | property and natural resource damages; | ||
• | releases or discharges of hazardous materials; | ||
• | well reclamation costs; | ||
• | oil spill clean-up costs; | ||
• | other remediation and clean-up costs; | ||
• | plugging and abandonment costs, which may be particularly high in the case of offshore facilities; | ||
• | governmental sanctions, such as fines and penalties; and | ||
• | other environmental damages. |
• | the containment and disposal of hazardous substances, oilfield waste and other waste materials; | ||
• | the use of underground storage tanks; and | ||
• | the use of underground injection wells. |
• | administrative, civil and criminal penalties; | ||
• | revocation of permits; and |
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• | corrective action orders. |
• | acquisition of desirable producing properties or new leases for future exploration; | ||
• | marketing our oil and natural gas production; | ||
• | arranging for growth capital on attractive terms; and | ||
• | seeking to acquire or secure the equipment, service, labor, other personnel and materials necessary to operate and develop those properties. |
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Number of | Number of | |||||||||||||||
Shares | Shares that | Ownership After Offering | ||||||||||||||
Beneficially | May Be Sold | Number of | ||||||||||||||
Name | Owned (1) | (2) | Shares (3) | Percent | ||||||||||||
AG Offshore Convertibles, Ltd. (4) | 2,561,579 | 3,199,931 | — | — | ||||||||||||
Leonardo, L.P. (4) | 634,710 | 848,650 | — | — | ||||||||||||
HFTP Investment L.L.C. (5) | 2,849,778 | 3,836,241 | — | — | ||||||||||||
Gaia Offshore Master Fund, Ltd. (5) | 1,030,195 | 1,370,109 | — | — | ||||||||||||
Portside Growth & Opportunity Fund (6) | 799,655 | 1,273,740 | — | — |
(1) | The shares of common stock considered beneficially owned by each selling stockholder includes, in addition to shares held of record, that number of shares of our common stock that such selling stockholder could acquire by exercising all of its Warrants held as of October 2, 2006 and the Conversion Shares such selling stockholder applicable could acquire within sixty (60) days of October 2, 2006, without giving effect to the limitation on conversion and exercise described above. These amounts include the following number of shares issuable upon exercise of the Warrants (“Warrant Shares”), as subsequently amended by the August Waiver, and Conversion Shares: for AG Offshore Convertibles, Ltd.: 2,080,553 and 401,282, respectively; for Leonardo, L.P.: 440,000 and 158,481, respectively; for HFTP Investment L.L.C.: 2,128,311 and 721,467, respectively; for Gaia Offshore Master Fund, Ltd.: 786,553 and 243,642, respectively; and for Portside Growth & Opportunity Fund: 394,309 and 405,346, respectively. The number of Conversion Shares each selling stockholder could acquire has been calculated on the basis of a conversion price of $3.8115 (which is 95% of the weighted average trading price of our common stock on the trading day prior to October 2, 2006) and does not take into account the conversion of accrued interest. The |
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actual conversion price will be based on 95% of the weighted average trading day price of our common stock on the trading day immediately preceding the conversion date. | ||
(2) | The sale of up to 10,528,671 shares by the selling stockholders is covered under this prospectus. This amount includes an aggregate of 4,115,973 shares which have been or may be issued to the selling stockholders upon conversion of the Notes. Of these 4,115,973 shares, 115,973 have been issued upon conversion of principal or interest under the Notes. This amount may reflect only a portion of the common shares which may be issuable to selling stockholders in the event the full principal amount of the Notes were converted into common shares. The number of shares that may be issued in the future upon conversion of the Notes will fluctuate based on the price of our common stock. Under the terms of the Notes, the conversion price is equal to 95% of the weighted average price of our common stock on the trading day immediately preceding the conversion date. Under the October Waiver, we agreed that Note holders could, at their option, elect to convert $3.4 million of Notes (plus accrued interest) commencing in October 3, 2006, and $2.0 million of Notes (plus accrued interest) commencing on each of November 1, 2006 and December 1, 2006, into shares of our common stock (which amounts are subject to reduction by the net proceeds of equity issued by Infinity prior to December 1, 2006). | |
In addition, the registration rights agreement entered into among us and the selling stockholders requires us to register at least 110% of the shares of our common stock issuable upon exercise of the Warrants. Therefore, a total of 6,412,698 shares issuable upon exercise of the Warrants may be offered by the selling stockholders pursuant to this prospectus. | ||
(3) | Assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus. | |
(4) | Angelo, Gordon & Co., L.P., a Delaware limited partnership, serves as the director of AG Offshore Convertibles, Ltd. and Leonardo, L.P. John M. Angelo and Michael L. Gordon are the principal executive officers of Angelo, Gordon & Co., L.P. Each of Angelo, Gordon & Co., L.P. and Messrs. Angelo and Gordon disclaim beneficial ownership of the shares held by AG Offshore Convertibles, Ltd. and Leonardo L.P. AG Offshore Convertibles, Ltd. and Leonardo, L.P. have each advised Infinity that (i) it is not a registered broker-dealer, (ii) it does not control and is not controlled by a registered broker-dealer, (iii) it is an affiliate of a registered broker-dealer due solely to its being under common control with a registered broker-dealer, (iv) the broker-dealer which is an affiliate of such selling stockholder was not involved in the purchase of the Notes and Warrants and has not been and will not be involved in the ultimate sale of the underlying common stock, (v) it purchased the Notes and Warrants in the ordinary course of its business, and (vi) at the time such selling stockholder purchased the Notes and Warrants, it was not a party to any agreement or other understanding to distribute the securities, directly or indirectly. | |
(5) | Promethean Asset Management L.L.C., a New York limited liability company (“Promethean”), serves as investment manager to HFTP Investment L.L.C. (“HFTP”) and Gaia Offshore Master Fund, Ltd. (“Gaia”) and may be deemed to share beneficial ownership of the shares beneficially owned by HFTP and Gaia. Promethean disclaims beneficial ownership of the shares beneficially owned by HFTP and Gaia. James F. O’Brien, Jr. indirectly controls Promethean. Mr. O’Brien disclaims beneficial ownership of the shares beneficially owned by Promethean, HFTP and Gaia. Each of HFTP and Gaia has advised Infinity that (i) it is not a registered broker-dealer, (ii) it does not control and is not controlled by a registered broker-dealer, (iii) it is an affiliate of a registered broker-dealer due solely to its being under common control with a registered broker-dealer, (iv) the broker-dealer that is an affiliate of such selling stockholder was not involved in the purchase of the Notes and Warrants, and will not be involved in the ultimate sale of the securities, (v) it purchased the Notes and Warrants in the ordinary course of its business, and (vi) at the time such selling stockholder purchased the Notes and Warrants, it was not a party to any agreement or other understanding to distribute the securities, directly or indirectly. | |
(6) | Ramius Capital Group, L.L.C. (“Ramius Capital”) is the investment adviser of Portside Growth and Opportunity Fund (“Portside”) and consequently has voting control and investment discretion over securities held by Portside. Ramius Capital disclaims beneficial ownership of the shares held by Portside. Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon are the sole managing members of C4S& Co., L.L.C., the sole managing member of Ramius Capital. As a result, Messrs. Cohen, Stark, Strauss and Solomon may be considered beneficial owners of any shares deemed to be beneficially owned by Ramius Capital. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial ownership of these shares. An affiliate of Ramius Capital is an NASD member. The NASD member that is an affiliate of Ramius Capital was not involved in the purchase of the Notes and Warrants, and will not be involved in the ultimate sale of the |
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securities. Portside purchased the Notes and Warrants in the ordinary course of its business and at the time such selling stockholder purchased the Notes and Warrants, it was not a party to any agreement or other understanding to distribute the securities, directly or indirectly. |
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• | our Annual Report on Form 10-K for the year ended December 31, 2005; | ||
• | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006 and June 30, 2006; | ||
• | our Current Reports on Form 8-K filed with the SEC on March 2, March 15, March 17, May 30, June 15, October 2 and October 6, 2006; and | ||
• | the description of our common stock contained in Amendment No. 1 to our Registration Statement on Form 8-A (SEC File No. 0-17204) filed with the SEC on September 13, 2005. |
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INFORMATION NOT REQUIRED IN PROSPECTUS
Registration Fee—Securities and Exchange Commission | $ | 5,500 | ||
Legal Fees and Expenses | 15,000 | * | ||
Accountants Fees and Expenses | 10,000 | * | ||
Total | $ | 30,500 | * | |
* | Estimated. |
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Exhibit | ||
No. | Description of Exhibit | |
4.1 | Securities Purchase Agreement, dated January 13, 2005 (1) | |
4.2 | Registration Rights Agreement, dated January 13, 2005 (1) | |
4.3 | Form of Warrant (1) | |
4.4 | Form of Initial Note (1) | |
4.5 | Form of Additional Note (1) | |
4.6 | Second Form of Additional Note (3) | |
5.1 | Opinion of Davis Graham & Stubbs LLP | |
10.1 | First Additional Closing Agreement, dated September 7, 2005 (2) | |
10.2 | Third Additional Closing Agreement, dated March 17, 2006 (3) | |
10.3 | Waiver and Amendment, dated August 9, 2006 (4) | |
10.4 | October 2006 Waiver and Amendment Agreement dated as of October 2, 2006 (5) | |
23.1 | Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.1) | |
23.2 | Consent of Ehrhardt Keefe Steiner & Hottman PC | |
23.3 | Consent of Netherland, Sewell & Associates, Inc. | |
24.1 | Power of Attorney (included on the signature page hereto) |
(1) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed January 14, 2005, and incorporated herein by reference. | |
(2) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed September 8, 2005, and incorporated herein by reference. | |
(3) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed March 17, 2006, and incorporated herein by reference. | |
(4) | Filed as an exhibit to Infinity’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference. | |
(5) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed October 2, 2006, and incorporated herein by reference. |
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INFINITY ENERGY RESOURCES, INC. | ||||||
By: | /s/ Stanton E. Ross | |||||
Name: Stanton E. Ross | ||||||
Title: Chief Executive Officer |
Signature | Title | |||||
/s/ Stanton E. Ross | Chairman of the Board and Chief Executive Officer | October 6, 2006 | ||||
Stanton E. Ross | (Principal Executive Officer) | |||||
/s/ James A. Tuell | President, Chief Operating Officer | October 6, 2006 | ||||
James A. Tuell | and Director | |||||
/s/ Timothy A. Ficker | Vice President, Chief Financial Officer | October 6, 2006 | ||||
Timothy A. Ficker | (Principal Financial and Accounting Officer) | |||||
/s/ Elliot M. Kaplan | Director | October 6, 2006 | ||||
Elliot M. Kaplan | ||||||
/s/ Robert O. Lorenz | Director | October 6, 2006 | ||||
Robert O. Lorenz | ||||||
/s/ Leroy C. Richie | Director | October 6, 2006 | ||||
Leroy C. Richie |
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Exhibit | ||
No. | Description of Exhibit | |
4.1 | Securities Purchase Agreement, dated January 13, 2005 (1) | |
4.2 | Registration Rights Agreement, dated January 13, 2005 (1) | |
4.3 | Form of Warrant (1) | |
4.4 | Form of Initial Note (1) | |
4.5 | Form of Additional Note (1) | |
4.6 | Second Form of Additional Note (3) | |
5.1 | Opinion of Davis Graham & Stubbs LLP | |
10.1 | First Additional Closing Agreement, dated September 7, 2005 (2) | |
10.2 | Third Additional Closing Agreement, dated March 17, 2006 (3) | |
10.3 | Waiver and Amendment, dated August 9, 2006 (4) | |
10.4 | October 2006 Waiver and Amendment Agreement dated as of October 2, 2006 (5) | |
23.1 | Consent of Davis Graham & Stubbs LLP (included in Exhibit 5.1) | |
23.2 | Consent of Ehrhardt Keefe Steiner & Hottman PC | |
23.3 | Consent of Netherland, Sewell & Associates, Inc. | |
24.1 | Power of Attorney (included on the signature page hereto) |
(1) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed January 14, 2005, and incorporated herein by reference. | |
(2) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed September 8, 2005, and incorporated herein by reference. | |
(3) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed March 17, 2006, and incorporated herein by reference. | |
(4) | Filed as an exhibit to Infinity’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, and incorporated herein by reference. | |
(5) | Filed as an exhibit to Infinity’s Current Report on Form 8-K filed October 2, 2006, and incorporated herein by reference. |