Filed Pursuant to Rule 424(b)(3)
Commission File No. 333-152041
PROSPECTUS
COMMON STOCK
This prospectus relates to the sale by the selling stockholders of up to 2,053,336 of our shares of common stock from time to time. Of this amount, 586,669 shares of common stock are issuable upon exercise of the
warrants issued by the Company on June 9, 2008. The shares were issued to the selling stockholders in connection with a private placement transaction on June 9, 2008 (the “Private Placement”) in reliance on exemptions from
registration under the Securities Act of 1933, as amended. These shares of our common stock are being registered pursuant to a registration rights agreement with the selling stockholders.
The shares are being registered to permit the selling stockholders to sell the shares from time to time in the public market. The selling
stockholders may sell the shares through ordinary brokerage transactions or through any means described in the section titled “Plan of Distribution.” The selling stockholders may sell any, all or none of the shares offered by this
prospectus.
This prospectus describes the general manner in which the shares of common stock may be offered and sold by the selling
stockholders. If necessary, the specific manner in which shares of common stock may be offered and sold will be described in a supplement to this prospectus.
Our common stock is quoted on The NASDAQ Global Market under the symbol “GEOI.” On July 10, 2008, the last reported sale price of our common stock was $18.82 per share.
We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and
any amendments or supplements carefully before you make your investment decision.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS WHICH WE REFERENCE ON PAGE 2.
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.
The date of this prospectus is July 11, 2008.
TABLE OF CONTENTS
You should rely on the information contained in this prospectus. We have not authorized anyone
to provide you with information different from that contained in this prospectus. Offers to sell shares of common stock will be made 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 the shares.
(ii)
PROSPECTUS SUMMARY
Forward-Looking Statements
Certain statements contained in this prospectus are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the “Act”),
including, without limitation, the statements specifically identified as forward-looking statements within this prospectus. Many of these statements contain risk factors as well. In addition, certain statements in future filings by the Company with
the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of the Company which are not statements of historical fact constitute forward-looking statements within the meaning of the
Act. Examples of forward-looking statements, include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items,
(ii) statements of our plans and objectives or our management or Board of Directors including those relating to planned development of our oil and gas properties, (iii) statements of future economic performance and (iv) statements of
assumptions underlying such statements. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “may,” “will” and similar expressions are intended to identify
forward-looking statements but are not the exclusive means of identifying such statements.
Such forward-looking statements speak only as
of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of
unanticipated events.
Important Information About This Prospectus
This is only a summary and does not contain all of the information that you should consider before investing in our common stock. You should read the
entire prospectus carefully, including the “Risk Factors” section as well as the information incorporated by reference into this prospectus under “Where You Can Find More Information”.
In this prospectus, the terms “company,” “we,” “us,” and “our” refer to GeoResources, Inc., a Colorado
corporation, including our wholly owned subsidiaries.
Information About GeoResources, Inc.
GeoResources, Inc., a Colorado corporation formed in 1958, is an independent oil and gas company engaged in the acquisition and development of oil and
gas reserves through an active and diversified program which includes purchases of reserves, re-engineering, development and exploration activities primarily focused in three core U.S. areas — the Southwest and Gulf Coast, the Rocky Mountains
and the Williston Basin. As a result of several related transactions the Company underwent a substantial change in ownership, management, assets and business strategy, all effective as of April 17, 2007.
On April 17, 2007, the Company merged with Southern Bay Oil & Gas, L.P. (“Southern Bay”) and a subsidiary of Chandler Energy, LLC
(“Chandler”) and acquired certain Chandler-associated oil and gas properties in exchange for 10,690,000 shares of common stock (collectively, the “Merger”). As a result of the Merger, the former Southern Bay partners received
approximately 57% of the then outstanding common stock of the Company and thus acquired voting control. Although GeoResources was the legal acquirer, for financial reporting purposes the Merger was accounted for as a reverse acquisition of
GeoResources by Southern Bay and an acquisition of Chandler and its associated properties.
On June 9, 2008, we completed a private
placement transaction with non-affiliated accredited investors for 1,533,334 shares of common stock at a price of $22.50 per share and warrants exercisable for 613,336 shares of common stock at an exercise price of $32.43 per share.
Our principal executive office is located at 110 Cypress Station Drive, Suite 220, Houston, Texas 77090, and our telephone number is (281) 537-9920.
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RISK FACTORS
Set forth below are risks with respect to our company. Readers should review these risks, together with the other information contained in this
prospectus. The risks and uncertainties we have described in this prospectus are not the only ones facing our company. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also adversely affect our
business. Any of the risks discussed in this prospectus or that are presently unknown or immaterial, if they were to actually occur, could result in a significant adverse impact on our business, operating results, prospects or financial condition.
We are dependent upon the services of our Chief Executive Officer and other executive officers.
We are dependent upon a limited number of personnel, including Frank A. Lodzinski, our Chief Executive Officer and President, and other management
personnel and key employees. Failure to retain the services of these persons, or to replace them with adequate personnel in the event of their departure or termination, may have a material adverse effect on operations. No employment agreements with
any of our officers currently exist, but we may consider such agreements in the future. We have no key-man life insurance on the lives of any of our executive officers.
We must successfully acquire or develop additional reserves of oil and gas.
Our future production of
oil and gas is highly dependent upon our level of success in acquiring or finding additional reserves. The rate of production from our oil and gas properties generally decreases as reserves are depleted. We may not be able to acquire or develop oil
and gas properties economically due to a lack of capital and inability to obtain adequate financing, which may be required to fund prospect generation, drilling operations and property acquisitions. To the extent financing is obtained, it may not be
on terms beneficial to us.
Intense competition in the oil and gas exploration and production segment could adversely affect our ability to acquire
desirable properties prospective for oil and gas, as well as producing oil and gas properties.
The oil and gas industry is highly
competitive. We compete with major integrated and independent oil and gas companies for the acquisition of desirable oil and gas properties and leases, for the equipment and services required to develop and operate properties, and in the marketing
of oil and gas to end-users. Many competitors have financial and other resources that are substantially greater than ours, which could in the future make acquisitions of producing properties at economic prices difficult for us. In addition, many
larger competitors may be better able to respond to factors that affect the demand for oil and natural gas production, such as changes in worldwide oil and natural gas prices and levels of production, the cost and availability of alternative fuels
and the application of government regulations. We also face significant competition in attracting and retaining experienced, capable and technical personnel, including geologists, geophysicists, engineers, landmen and others with experience in the
oil and gas industry.
We may be faced with shortages of personnel and equipment, thereby adversely affecting operations and financial results.
Our operations and financial results may be adversely impacted due to difficulties in attracting and retaining qualified and experienced
personnel in our oil and gas exploration and production business. Additional personnel are likely to be required in connection with our expansion plans, and the domestic oil and gas industry is currently experiencing significant shortages of
qualified personnel in all areas of operations. Similarly, our expansion plans will require access to services and oil field equipment, both of which are currently in short supply.
Volatile oil and natural gas prices could adversely affect our financial condition and results of operations.
Our success will be largely dependent on oil and natural gas prices, which are volatile and have recently been at historically high levels. Any substantial or extended decline in the price of oil and natural gas will have a negative impact
on our business operations and future revenues. Moreover, oil and natural gas prices depend on factors that are outside of our control, such as:
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economic and energy infrastructure disruptions caused by actual or threatened acts of war, or terrorist activities particularly with respect to oil producers in the
Middle East, Nigeria and Venezuela;
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weather conditions, such as hurricanes, including energy infrastructure disruptions resulting from those conditions;
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changes in the global oil supply, demand and inventories;
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changes in domestic natural gas supply, demand and inventories;
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the price and quantity of foreign imports of oil;
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the price and availability of liquefied natural gas imports;
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political conditions in or affecting other oil-producing countries;
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general economic conditions in the United Stated and worldwide;
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the interdependence of oil and natural gas and energy trading companies;
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the level of worldwide oil and natural gas exploration and production activity;
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technological advances affecting energy consumption; and
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the price and availability of alternative fuels.
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Lower oil and natural gas prices may not only decrease revenues on a per unit basis, but also may reduce the amount of oil and natural gas that we can produce economically. Lower prices will also negatively impact
estimates of our proved reserves. A substantial or extended decline in oil or natural gas prices may materially and adversely affect our financial condition, results of operations, liquidity or ability to finance operations and planned capital
expenditures.
Industry changes may adversely affect various financial measurements and negatively affect the market price of our common stock.
Although we believe that the Merger will allow us to seek to accelerate growth and increase operating efficiencies, unforeseen costs and
industry changes, as listed below, could potentially have an adverse effect on return of capital and earnings per share. Future events and conditions could cause any such changes to be significant, including, among other things, adverse changes in:
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commodity prices for oil, natural gas and liquid natural gas;
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capital expenditure obligations; and
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We may incur substantial
losses and be subject to substantial liability claims as a result of our oil and natural gas operations.
Oil and natural gas
exploration, drilling and production activities are subject to numerous operating risks including the possibility of:
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blowouts, fires and explosions;
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personal injuries and death;
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uninsured or underinsured losses;
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unanticipated, abnormally pressured formations;
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mechanical difficulties, such as stuck oil field drilling and service tools and casing collapse; and
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environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including
groundwater and shoreline contamination.
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Any of these operating hazards could cause damage to properties, serious
injuries, fatalities, oil spills, discharge of hazardous materials, remediation and clean-up costs, and other environmental damages, which could expose us to liabilities. Although we believe that we are adequately insured for replacement costs of
our wells and associated equipment, the payment of any of these liabilities could reduce the funds available for exploration, development, and acquisition, or could result in a loss of our properties. Also, as is customary in the oil and gas
business, we do not carry business interruption insurance.
The insurance market in general and the energy
insurance market in particular have experienced cost increases. It is possible that we will determine not to purchase some insurance because of high insurance premiums. If we incur substantial liabilities and the damages are not fully covered by
insurance or are in excess of policy limits, then our business, results of operations and financial condition would likely be materially adversely affected.
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We have hurricane associated risks in connection with our operations in the Texas and Louisiana Gulf Coast.
We could be subject to production curtailments resulting from hurricane damage to certain fields or, even in the event that producing
fields are not damaged, production could be curtailed due to damage to facilities and equipment owned by oil and gas purchasers, or vendors and suppliers, because a portion of our oil and gas properties are located in or near coastal areas of the
Texas and Louisiana Gulf Coast. In August 2005, Hurricane Katrina caused significant damage to the facilities at four of our oil and gas properties located in southeast Louisiana and southeast Texas. These properties accounted for approximately 13%
of the former Southern Bay’s oil production in 2005 (approximately 20,000 barrels). In connection with these damages to the facilities at the four properties .03 net wells were shut in for 250 days, 2.35 net wells were shut in for 381 days, .22
net wells were shut in for 385 days, and .71 net wells commenced production in early 2007 after being shut in since August 25, 2005. As of March 2008, production from the affected fields was near pre-Hurricane Katrina levels.
The nature of our business and assets may expose us to significant compliance costs and liabilities.
Our operations involving the exploration, production, storage, treatment, and transportation of liquid hydrocarbons, including crude oil, are subject to
stringent federal, state, and local laws and regulations governing the discharge of materials into the environment. Our operations are also subject to laws and regulations relating to protection of the environment, operational safety, and related
employee health and safety matters. Compliance with all of these laws and regulations may represent a significant cost of doing business. Failure to comply with these laws and regulations may result in the assessment of administrative, civil, and
criminal penalties; the imposition of investigatory and remedial liabilities; the issuance of injunctions that may restrict, inhibit or prohibit our operations; or claims of damages to property or persons.
Revisions of oil and gas reserve estimates could adversely affect the trading price of our common stock. Oil and gas reserves and the standardized measure of cash
flows represent estimates, which may vary materially over time due to many factors.
The market price of our common stock may be subject
to significant decreases due to decreases in estimated reserves and our estimated cash flows. Estimated reserves may be subject to downward revision based upon future production, results of future development, prevailing oil and gas prices,
prevailing operating and development costs and other factors. There are numerous uncertainties and uncontrollable factors inherent in estimating quantities of oil and gas reserves, projecting future rates of production, and timing of development
expenditures.
In addition, the estimates of future net cash flows from proved reserves and the present value of proved reserves are based
upon various assumptions about prices and costs and future production levels that may prove to be incorrect over time. Any significant variance from the assumptions could result in material differences in the actual quantity of reserves and amount
of estimated future net cash flows from estimated oil and gas reserves.
Our hedging activities may prevent us from realizing the benefits in oil or gas
price increases.
In an attempt to reduce our sensitivity to oil and gas price volatility, we have, and will likely continue to, enter
into hedging transactions which may include fixed price swaps, price collars, puts and other derivatives. In a typical hedge transaction, we may fix the price, a floor or a range, on a portion of our production over a predetermined period of time.
It is expected that we will receive from the counter-party to the hedge payment of the excess of the fixed price specified in the hedge contract over a floating price based on a market index, multiplied by the volume of the production hedged.
Conversely, if the floating price exceeds the fixed price, we would be required to pay the counter-party such price difference multiplied by the volume of production hedged. There are numerous risks associated with hedging activities such as the
risk that reserves are not produced at rates equivalent to the hedged position, and the risk that production and transportation cost assumptions used in determining an acceptable hedge could be substantially different from the actual cost. In
addition, the counter party to the hedge may become unable or unwilling to perform its obligations under hedging contracts, and we could incur a material adverse financial effect if there is any significant non-performance. While intended to reduce
the effects of oil and gas price volatility, hedging transactions may limit potential gains earned by us from oil and gas price increases and may expose us to the risk of financial loss in certain circumstances.
Engaging in hedging activities may prevent us from realizing the benefits of price increases above the levels of the hedges during certain time periods.
As of the date of this prospectus, we were a party to five oil hedge contracts and eight natural gas hedge contracts, all of which we have designated as cash flow hedges. These contracts were entered into for the purpose of mitigating the effects of
a potential decline in oil and gas prices.
In an attempt to reduce our exposure to interest rate increases, we have also entered into an
interest rate swap contract with our bank.
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Drilling for and producing oil and natural gas are high-risk activities with many uncertainties that could adversely
affect our financial condition and results of operations.
Our success will depend on the results of our exploitation, exploration,
development and production activities. Oil and natural gas exploration and production activities are subject to numerous risks beyond our control, including the risk that drilling will not result in commercially viable oil or natural gas production.
Decisions to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data, and engineering studies, the results of which
are often inconclusive or subject to varying interpretations. Costs of drilling, completing and operating wells are often uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project
uneconomical. Furthermore, many factors may curtail, delay or cancel drilling, including:
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shortages of or delays in obtaining equipment and qualified personnel;
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pressure or irregularities in geological formations;
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equipment failures or accidents;
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adverse weather conditions;
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reductions in oil and natural gas prices;
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issues associated with property titles; and
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delays imposed by or resulting from compliance with regulatory requirements.
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Existing debt and use of debt financing may adversely affect our business strategy.
We use debt to
fund a portion of our acquisition activities and we will likely use debt to fund a portion of our future acquisition activities. Any temporary or sustained inability to service or repay debt will materially adversely affect our results of
acquisitions and financial condition and will materially adversely affect our ability to obtain other financing.
On October 16, 2007,
we entered into an Amended and Restated Credit Agreement (the “Amended Credit Facility”) with Wachovia Bank, National Association, as Administrative Agent, Issuing Bank, Sole Lead Arranger and Sole Bookrunner (the “Lender”) which
provides for financing of up to $200.0 million, subject to borrowing base limitations.
The current borrowing base of the Amended Credit
Facility is $95.0 million and it is subject to redetermination on June 1 and December 1 of each year. The amounts borrowed under the Amended Credit Facility bear interest at either (a) the London Interbank Offered Rate
(“LIBOR”) plus 1.50% to 2.25% or (b) the prime lending rate of Wachovia plus .5% to 1.25%, depending on the amount borrowed. Principal amounts outstanding under the Amended Credit Facility are due and payable in full at maturity,
October
16, 2010.
Additional payments due under the Amended Credit Facility, include paying a commitment fee to the Lender in
respect of the unutilized commitments thereunder. The commitment rate is 0.375% to 0.50% per year depending on the amount of borrowing base utilization. We are also required to pay customary letter of credit fees. All of the
obligations under the Amended Credit Facility, and the guarantees of those obligations, are secured by substantially all of our assets.
The Amended Credit Facility contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to incur additional indebtedness, create liens on assets, make investments, enter into sale and
leaseback transactions, pay dividends and distributions or repurchase our capital stock, engage in mergers or consolidations, sell certain assets, sell or discount any notes receivable or accounts receivable and engage in certain transactions with
affiliates.
In addition, the Amended Credit Facility requires us to maintain certain customary financial ratios. The Amended Credit
Facility also contains customary affirmative covenants and defines events of default for facilities of this type. Upon the occurrence and continuance of an event of default, the Lender has the right to accelerate repayment of the loans and
exercise its remedies with respect to the collateral.
We are obligated to comply with financial and other covenants in our existing Amended Credit
Facility that could restrict our operating activities, and the failure to comply could result in defaults that accelerate the payment under our debt.
As of the date of this prospectus, we were in compliance with all such covenants. If we were to breach any of our debt covenants and not cure the breach within any applicable cure period, the Lender could require us
to repay the debt
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immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the properties securing the Amended Credit Facility. Any
such properties loss would materially and adversely affect our cash flow and results of operations.
Our properties may be subject to influence by third
parties that do not allow us to proceed with planned explorations and expenditures.
We are the operator of a majority of our
properties, but for most of our properties we own less than 100% of the working interests. Joint ownership is customary in the oil and gas industry and is generally conducted under the terms of a joint operating agreement (“JOA”), where a
single working interest owner is designated as the “operator” of the property. For properties where we own less than 100% of the working interest, whether operated or non-operated, drilling and operating decisions may not be within our
sole control. If we disagree with the decision of a majority of working interest owners, we may be required, among other things, to postpone the proposed activity or decline to participate. If we decline to participate we might be forced to
relinquish our interest through “in-or-out” elections or may be subject to certain non-consent penalties, as provided in a JOA. In-or-out elections may require a joint owner to participate, or forever relinquish its position. Non-consent
penalties typically allow participating working interest owners to recover from the proceeds of production, if any, an amount equal to 200% to 500% of the non-participating working interest owner’s share of the cost of such operations.
If oil and gas prices decrease or exploration efforts are unsuccessful, we may be required to write- down the capitalized cost of individual oil and
gas properties.
A writedown of the capitalized cost of individual oil and gas properties could occur when oil and gas prices are low or
if we have substantial downward adjustments to our estimated proved oil and gas reserves, if operating costs or development costs increase over prior estimates, or if exploratory drilling is unsuccessful. A writedown could adversely affect the
trading prices of our common stock.
We use the successful efforts accounting method for our oil and gas properties. All property
acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending the determination of whether proved reserves are discovered. If proved reserves are not discovered with an exploratory well, the costs of
drilling the well are expensed. All geological and geophysical costs on exploratory prospects are expensed as incurred.
The capitalized
costs of our oil and gas properties, on a field-by-field basis, may exceed the estimated future net cash flows of that field. If so, pursuant to generally accepted accounting principles, we are required to record impairment charges to reduce the
capitalized costs of each such field to our estimate of the field’s fair market value, even though other fields may have increased in value. Unproved properties are valued at the lower of cost or fair market value. These types of charges will
reduce earnings and shareholders’ equity.
We periodically assess our properties for impairment based on future estimates of proved
and risk-adjusted probable reserves, oil and gas prices, production rates and operating, development and reclamation costs based on operating budget forecasts. Once incurred, an impairment charge cannot be reversed at a later date even if we
experience increases in the price of oil or gas, or both, or increases in the amount of estimated proved reserves.
There are a substantial number of
shares of our common stock eligible for future sale in the public market. The sale of a large number of these shares could cause the market price of our common stock to fall.
There were 16,236,717 shares of our common stock outstanding as of July 10, 2008.
Members of our management and other affiliates owned approximately 7,582,160 shares of our common stock, representing 46.7% of our outstanding common
stock as of July 10, 2008. Sale of a substantial number of these shares would likely have a significant negative affect on the market price of our common stock, particularly if the sales are made over a short period of time. These shares have
been and may be sold publicly pursuant to an effective registration statement with the SEC.
If our stockholders, particularly management
and their affiliates, sell a large number of shares of our common stock, the market price of shares of our common stock could decline significantly. Moreover, the perception in the public market that our management and affiliates might sell shares
of our common stock could depress the market price of those shares.
Recovery of Investments.
We cannot assure that we will recover the costs we incur in acquiring oil and gas properties.
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While the acquisition and development of oil and gas properties is based on engineering, geological and
geophysical assessments, such data and analysis is inexact and inherently uncertain. There can be no assurance that any properties we acquire will be economically produced or developed. Re-engineering operations pose the risk that anticipated
benefits, which may include reserve additions, production rate improvements or lower recurring operating expenses, may not be achieved, or that actual results obtained may not be sufficient to recover investments. Drilling activities, whether
exploratory or developmental, are subject to mechanical and geological risks, including the risk that no commercially productive reservoirs will be encountered. Unsuccessful acquisitions, re-engineering or drilling activities could have a material
adverse effect on our results of operations and financial condition.
We cannot assure we would be able to achieve continued growth in assets,
production or revenues.
Although GeoResources was the legal acquirer, in accordance with generally accepted accounting principles, the
Merger was accounted for as a reverse acquisition and, accordingly, the financial information for years prior to 2007 are those of Southern Bay, which commenced operations in September 2004. Our growth since that time, particularly in 2007, may not
be indicative of future results. There can be no assurance that we will continue to experience growth in revenues, oil and gas reserves or production. Any future growth in oil and gas reserves, production and operations will place significant
demands on us and our management and personnel. Our future performance and profitability will depend in part on our ability to successfully integrate acquired properties into our operations, develop such properties, hire additional personnel and
implement necessary enhancements to its management systems. Although management has substantive prior experience, there can be no assurance that we will continue to be successful in our growth strategy.
Compliance with environmental laws and regulations may require us to spend significant resources.
Environmental laws and regulations may: (1) require the acquisition of a permit before well drilling commences; (2) restrict or prohibit the
types, quantities and concentration of substances that can be released into the environment in connection with drilling and production activities; (3) prohibit or limit drilling activities on certain lands lying within wetlands or other
protected areas; and (4) impose substantial liabilities for pollution resulting from past or present drilling and production operations. Moreover, changes in Federal and state environmental laws and regulations could occur and may result in
more stringent and costly requirements which could have a significant impact on our operating costs. In general, under various applicable environmental regulations, we may be subject to enforcement action in the form of injunctions, cease and desist
orders and administrative, civil and criminal penalties for violations of environmental laws. We may also be subject to liability from third parties for civil claims by affected neighbors arising out a pollution event. Laws and regulations
protecting the environment may, in certain circumstances, impose strict liability rendering a person liable for environmental damage without regard to negligence or fault on the part of such person. Such laws and regulations may expose us to
liability for the conduct of or conditions caused by others, or for our acts which were in compliance with all applicable laws at the time such acts were performed. We believe we are in compliance with applicable environmental and other governmental
laws and regulations. There can be no assurance, however, that significant costs for environmental regulatory compliance will not be incurred by us in the future, thereby having an adverse effect on our ability to conduct our business profitably.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered by this prospectus are solely for the account of the selling stockholders. We will not receive any proceeds from the sale of these shares of common stock.
A portion of the shares of our common stock covered by this prospectus are issuable upon exercise of warrants to purchase our common
stock. The exercise price of the warrants issued to the selling stockholders is $32.43 per share. Upon any exercise for cash of the warrants, the selling stockholders will pay us the exercise price of the warrants. The warrants are also exercisable
on a cashless basis. We will not receive any cash payment from the selling stockholders upon any exercise of the warrants on a cashless basis. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be
adjusted in certain circumstances, including subdivisions and stock splits, stock dividends, combinations, reorganizations, reclassifications, consolidations, mergers or sales of properties and assets and upon the issuance of certain assets or
securities to holders of our common stock, as applicable. To the extent we receive proceeds from the cash exercise of the warrants, we intend to use the proceeds for working capital, the repayment of debt and other general corporate purposes.
We do not consider the repayment of debt to be material.
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SELLING SECURITY HOLDERS
The following table sets forth certain information as of July 10, 2008, with respect to the selling stockholders. The following table assumes that
the selling stockholders sell all of the shares offered by this prospectus. We are unable to determine the exact number of shares, if any, that actually will be sold.
The number and percentage of shares of our common stock beneficially owned is based on shares outstanding at July 10, 2008, determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (the
“Exchange Act”) and assumes exercise of all warrants held by the selling stockholders on that date without regard to any limitations on exercise. The information is not necessarily indicative of beneficial ownership for any other purpose.
Under Rule 13d-3, beneficial ownership includes any shares as to which an individual has sole or shared voting power or investment power. Unless otherwise indicated in the footnotes, each person has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the shares shown as beneficially owned.
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Shares Owned Prior to
Offering (1)
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Shares
Offered
Pursuant to
this
Prospectus
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Shares Owned After Offering
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Name of Selling Stockholder
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Number
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Percent
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Number
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Number (2)
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Percent
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CAMOFI Master LDC (3)
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62,223
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62,223
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0
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*
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Cranshire Capital, L.P. (4)
|
|
93,334
|
|
*
|
*
|
|
93,334
|
|
0
|
|
*
|
*
|
|
Crestview Capital Master, LLC (5)
|
|
168,890
|
|
1.0
|
%
|
|
168,890
|
|
0
|
|
*
|
*
|
|
Enable Growth Partners LP (6)
|
|
35,556
|
|
*
|
*
|
|
35,556
|
|
0
|
|
*
|
*
|
|
Enable Opportunity Partners LP (7)
|
|
8,889
|
|
*
|
*
|
|
8,889
|
|
0
|
|
*
|
*
|
|
Hudson Bay Fund LP (8)
|
|
62,223
|
|
*
|
*
|
|
62,223
|
|
0
|
|
*
|
*
|
|
Hudson Bay Overseas Fund LTD (9)
|
|
248,890
|
|
1.5
|
%
|
|
248,890
|
|
0
|
|
*
|
*
|
|
Iroquois Master Fund Ltd. (10)
|
|
124,445
|
|
*
|
*
|
|
124,445
|
|
0
|
|
*
|
*
|
|
Jung Capital Partners, LLLP (11)
|
|
8,000
|
|
*
|
*
|
|
7,000
|
|
1,000
|
|
*
|
*
|
|
Truk International Fund, L.P. (12)
|
|
18,044
|
|
*
|
*
|
|
18,044
|
|
0
|
|
*
|
*
|
|
Truk Opportunity Fund, LLC (13)
|
|
44,179
|
|
*
|
*
|
|
44,179
|
|
0
|
|
*
|
*
|
|
Portside Growth and Opportunity Fund (14)
|
|
62,223
|
|
*
|
*
|
|
62,223
|
|
0
|
|
*
|
*
|
|
RHP Master Fund, Ltd. (15)
|
|
70,000
|
|
*
|
*
|
|
70,000
|
|
0
|
|
*
|
*
|
|
Rockmore Investment Master Fund Ltd. (16)
|
|
78,550
|
|
*
|
*
|
|
78,550
|
|
0
|
|
*
|
*
|
|
Harbour Holdings Ltd (17)
|
|
38,000
|
|
*
|
*
|
|
38,000
|
|
0
|
|
*
|
*
|
|
Skylands Quest LLC (18)
|
|
6,400
|
|
*
|
*
|
|
6,400
|
|
0
|
|
*
|
*
|
|
Skylands Special Investment II LLC (19)
|
|
3,867
|
|
*
|
*
|
|
3,867
|
|
0
|
|
*
|
*
|
|
Skylands Special Investment LLC (20)
|
|
18,400
|
|
*
|
*
|
|
18,400
|
|
0
|
|
*
|
*
|
|
UBS O’Connor LLC FBO O’Connor PIPES Corporate Strategies Master Limited (21)
|
|
280,000
|
|
1.7
|
%
|
|
280,000
|
|
0
|
|
*
|
*
|
|
Waterstone Market Neutral Master Fund Ltd. (22)
|
|
418,320
|
|
2.6
|
%
|
|
418,320
|
|
0
|
|
*
|
*
|
|
Waterstone Market Neutral MAC 51 Ltd. (23)
|
|
203,903
|
|
1.3
|
%
|
|
203,903
|
|
0
|
|
*
|
*
|
|
TOTAL
|
|
2,054,336
|
|
12.7
|
%
|
|
2,053,336
|
|
1,000
|
|
*
|
*
|
|
(1)
|
Percentages prior to proposed sales of shares offered by this prospectus are based on 16,236,717 shares of our common stock, excluding treasury shares, which were issued and
outstanding as of July 10, 2008.
|
|
(2)
|
We do not know when or in what amounts the selling stockholders may offer for sale the shares of common stock pursuant to this offering. The selling stockholders may choose not to
sell any of the shares offered by this prospectus. Because the selling stockholders may offer all or some of the shares of common stock pursuant to this offering, and because, except as noted, there are currently no agreements, arrangements or
undertakings with respect to the sale of any of the shares of common stock, we cannot estimate the number of shares of common stock that the selling stockholders will hold after completion of the offering. For purposes of this table, we have assumed
that the selling stockholders will have sold all of the shares covered by this prospectus upon the completion of the offering with the exception of the shares held for certain persons that have not vested at this time. The shares owned after the
offering assume the exercise of all warrants for 586,669 shares of common stock.
|
8
|
(3)
|
Includes 17,778 shares of common stock underlying warrants exercisable six months after June 9, 2008. Mr. Richard Smithline has indirect voting and investment control over
the shares held by CAMOFI Master LDC. Mr. Smithline disclaims beneficial ownership of the shares held by CAMOFI Master LDC.
|
|
(4)
|
Includes 26,667 shares of common stock underlying warrants exercisable six months after June 9, 2008. Downsview Capital, Inc. (“Downsview”) is the general partner of
Cranshire Capital, L.P. (“Cranshire”) and consequently has voting control and investment discretion over securities held by Cranshire. Mitchell P. Kopin (“Mr. Kopin”), President of Downsview, has voting control over Downsview. As
a result, each of Mr. Kopin, Downsview and Cranshire may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the shares owned by Cranshire which are being
registered hereunder.
|
|
(5)
|
Includes 80,001 shares of common stock underlying warrants exercisable six months after June 9, 2008. Crestview Capital Partners, LLC (“CCP”) is the sole managing
member of Crestview Capital Master, LLC (“CCM”) and may be deemed to have sole voting and investment power with respect to the securities beneficially owned by CCM. CCP disclaims beneficial ownership of these securities. The Managing
Members of CCP are Stewart Flink, Robert Hoyt and Daniel Warsh, each of whom may be deemed to have voting and dispositive power over securities beneficially owned by CCM, and each of whom also disclaims beneficial ownership of these securities.
|
|
(6)
|
Mitchell Levine has sole power to vote and dispose of the securities held.
|
|
(7)
|
Mitchell Levine has sole power to vote and dispose of the securities held.
|
|
(8)
|
Includes 17,778 shares of common stock underlying warrants exercisable six months after June 9, 2008. Sander Gerber, Yoav Roth, John Doscas and Charles Winkler share voting and
investment power over these securities. Sander Gerber, Yoav Roth, John Doscas and Charles Winkler disclaim beneficial ownership of the securities held by Hudson Bay Fund LP.
|
|
(9)
|
Includes 71,112 shares of common stock underlying warrants exercisable six months after June 9, 2008. Sander Gerber, Yoav Roth, John Doscas and Charles Winkler share voting and
investment power over these securities. Sander Gerber, Yoav Roth, John Doscas and Charles Winkler disclaim beneficial ownership of the securities held by Hudson Bay Overseas Fund Ltd.
|
|
(10)
|
Includes 35,556 shares of common stock underlying warrants exercisable six months after June 9, 2008. Joshua Silverman has voting and investment control over the shares held by
Iroquois Master Fund Ltd. Mr. Silverman disclaims beneficial ownership of these shares.
|
|
(11)
|
Includes 2,000 shares of common stock underlying warrants exercisable six months after June 9, 2008. Jon P. Jung has voting and investment control over the shares held by Jung
Capital Partners, LLLP.
|
|
(12)
|
Includes 5,155 shares of common stock underlying warrants exercisable six months after June 9, 2008. Michael E. Fein and Stephen E. Saltzstein, as principals of Atoll Asset
Management, LLC, the General Partner of Truk International Fund, L.P., exercise investment and voting control over the shares of our common stock owned by Truk International Fund, L.P. Both Mr. Fein and Mr. Saltzstein disclaim
beneficial ownership of the shares of our common stock owned by Truk International Fund, L.P.
|
|
(13)
|
Includes 12,623 shares of common stock underlying warrants exercisable six months after June 9, 2008. Michael E. Fein and Stephen E. Saltzstein, as principals of Atoll Asset
Management, LLC, the Managing Member of Truk Opportunity Fund, LLC, exercise investment and voting control over the shares of our common stock owned by Truk Opportunity Fund, LLC. Both Mr. Fein and Mr. Saltzstein disclaim beneficial
ownership of the shares of our common stock owned by Truk Opportunity Fund, LLC.
|
|
(14)
|
Includes 17,778 shares of common stock underlying warrants exercisable six months after June 9, 2008. Ramius LLC (“Ramius”) 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 disclaims beneficial ownership of these securities. C4S & Co., L.L.C.
(“C4S”) is the managing member of Ramius and may be considered the beneficial owner of any securities deemed to be beneficially owned by Ramius. C4S disclaims beneficial ownership of these securities. Peter A. Cohen, Morgan B. Stark,
Thomas W. Strauss and Jeffrey M. Solomon are the sole managing members of C4S and may be considered beneficial owners of any securities deemed to be beneficially owned by C4S. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial ownership
of these securities.
|
|
(15)
|
Includes 20,000 shares of common stock underlying warrants exercisable six months after June 9, 2008. RHP Master Fund, Ltd. is a party to an investment
management agreement with Rock Hill Investment Management, L.P., a limited partnership of which the general partner is RHP General Partner, LLC. Pursuant to such agreement, Rock Hill Investment Management directs the voting and disposition of shares
owned by RHP Master Fund. Messrs. Wayne
|
9
|
|
Bloch and Peter Lockhart own all of the interests in RHP General Partner. The aforementioned entities and individuals disclaim beneficial ownership of the
Company’s securities owned by RHP Master Fund.
|
|
(16)
|
Includes 22,443 shares of common stock underlying warrants exercisable six months after June 9, 2008. Rockmore Capital, LLC (“Rockmore Capital”) and Rockmore
Partners, LLC (“Rockmore Partners”), each a limited liability company formed under the laws of the state of Delaware, serve as the investment management and general partner, respectively, to Rockmore Investments (US) LP, a Delaware limited
partnership, which invests all of its assets through Rockmore Investment Master Fund Ltd., an exempted company formed under the laws of Bermuda (“Rockmore Master Fund”). By reason of such relationships, Rockmore Capital and Rockmore
Partners may be deemed to share dispositive power over the shares of our common stock owned by Rockmore Master Fund. Rockmore Capital and Rockmore Partners disclaim beneficial ownership of such shares of our common stock. Rockmore Partners has
delegated authority to Rockmore Capital regarding the portfolio management decisions with respect to the shares of common stock owned by Rockmore Master Fund and, as of June 30, 2008, Mr. Bruce T. Bernstein and Mr. Brian Daly, as
officers of Rockmore Capital, are responsible for the portfolio management decisions of the shares of common stock owned by Rockmore Master Fund. By reason of such authority, Messrs. Berstein and Daly may be deemed to share dispositive power over
the shares of our common stock owned by Rockmore Master Fund. Messrs. Bernstein and Daly may be deemed to share dispositive power over the shares of our common stock owned by Rockmore Master Fund. Messrs. Berstein and Daly disclaim beneficial
ownership of such shares of our common stock and neither of such persons has any legal right to maintain such authority. No other person has sole or shared voting or dispositive power with respect to the shares of our common stock as those terms are
used for purposes under Regulation 13D-G of the Securities Exchange Act of 1933, as amended. No person or “group” (as that term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended, or the SEC’s Regulation
13D-G) controls Rockmore Master Fund.
|
|
(17)
|
Charles A. Paquelet has sole voting and dispositive authority with regard to the securities held by Harbour Holdings Ltd.
|
|
(18)
|
Charles A. Paquelet has sole voting and dispositive authority with regard to the securities held by Skylands Quest LLC.
|
|
(19)
|
Charles A. Paquelet has sole voting and dispositive authority with regard to the securities held by Skylands Special Investment II LLC.
|
|
(20)
|
Charles A. Paquelet has sole voting and dispositive authority with regard to the securities held by Skylands Special Investment LLC.
|
|
(21)
|
Includes 80,000 shares of common stock underlying warrants exercisable six months after June 9, 2008. UBS O’Connor LLC is the Investment Manager of UBS O’Connor LLC
f/b/o O’Connor Pipes Corporate Strategies Master Ltd. and as such controls the investment and voting decisions with respect to these shares. UBS O’Connor LLC is a wholly owned subsidiary of UBS AG which is listed and traded on the New York
Stock Exchange.
|
|
(22)
|
Includes 119,520 shares of common stock underlying warrants exercisable six months after June 9, 2008. Waterstone Capital Management, L.P. is the investment advisor for
Waterstone Market Neutral Master Fund, Ltd and Waterstone Market Neutral Mac 51 Fund, Ltd. Shawn Bergerson has voting and investment control over the shares held by Waterstone Capital Management, L.P.
|
|
(23)
|
Includes 58,258 shares of common stock underlying warrants exercisable six months after June 9, 2008. Waterstone Capital Management, L.P. is the investment advisor for
Waterstone Market Neutral Master Fund, Ltd and Waterstone Market Neutral Mac 51 Fund, Ltd. Shawn Bergerson has voting and investment control over the shares held by Waterstone Capital Management, L.P.
|
10
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. The selling stockholders may
use any one or more of the following methods when selling shares:
|
|
•
|
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
|
•
|
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction;
|
|
|
•
|
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
|
•
|
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
|
|
•
|
|
privately negotiated transactions;
|
|
|
•
|
|
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
|
|
|
•
|
|
a combination of any such methods of sale; and
|
|
|
•
|
|
any other method permitted pursuant to applicable law.
|
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in 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.
Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from 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. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a selling stockholder. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares if liabilities are imposed on that person under the Securities Act. In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers,
which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver shares of common stock covered by this
prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed a supplement to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be
“underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them
may be deemed to be underwriting commissions or discounts under the Securities Act.
11
We are required to pay all fees and expenses incident to the registration of the shares of common stock.
We have agreed to indemnify the selling stockholders against certain claims, damages and liabilities, including liabilities under the Securities Act.
The selling stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor
is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling stockholders use this prospectus for any sale of the shares of common stock, they will be subject to the prospectus
delivery requirements of the Securities Act.
Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
There can be no assurance that any selling stockholder will sell any or all of the shares
of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.
The selling stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the
Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution
of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of common stock.
Once sold under the registration statement, of which this prospectus
forms a part, the shares of common stock will be freely tradable in the hands of persons other than our affiliates.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Our authorized capital stock consists of 100,000,000 shares of common stock, par value
$0.01 per share, and 20,000,000 shares of preferred stock, par value $0.01 per share. As of July 10, 2008, 16,236,717 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.
Common Stock
Each outstanding share of common
stock entitles the holder to one vote on all matters presented to the shareholders for a vote. Holders of shares of common stock have no cumulative voting, preemptive or conversion rights. Our Board of Directors determines if and when distributions
may be paid out of legally available funds to the holders. We do not anticipate paying cash dividends on the common stock in the foreseeable future.
The holders of a majority of the outstanding shares of common stock constitute a quorum at any meeting of the shareholders. A plurality of the votes cast at a meeting of shareholders elects our directors. The common
stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of common stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize
shareholder actions other than the election of directors. Most amendments to our articles of incorporation require the vote of the holders of a majority of all outstanding voting shares.
Preferred Stock
Under our articles of incorporation, as amended, our Board of Directors may issue up
to 20,000,000 shares of preferred stock from time to time in one or more series. The Board of Directors is authorized to fix by resolution as to any series the designation and number of shares of the series, the voting rights, the dividend rights,
the redemption price, the amount payable upon liquidation or dissolution, the conversion rights, and any other designations, preferences or special rights or restrictions as may be permitted by law. Unless the nature of a particular transaction and
the rules of law applicable thereto require such approval, our Board of Directors has the authority to issue these shares of preferred stock without shareholder approval.
12
LEGAL MATTERS
The validity of the common stock being offered from time to time under this prospectus will be passed upon for us by Jones & Keller, P.C.,
Denver, Colorado. Reid A. Godbolt, a member of Jones & Keller, P.C., beneficially owns 12,753 shares of our common stock held of record by a limited liability company he owns jointly with his spouse.
EXPERTS
The consolidated financial statements incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated by reference in reliance upon the report of Grant Thornton LLP, independent registered
public accountants, upon the authority of said firm as experts in giving said report.
TRANSFER AGENT AND
REGISTRAR
Our Transfer Agent and Registrar is Wells Fargo Shareowner Services, 161 N. Concord Exchange Street, South St. Paul,
Minnesota 55075.
13
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Where You Can Find More Information
We file
annual, quarterly and current reports, proxy statements and other information with the Commission. You may read and copy any reports, statements or other information we file with the Commission at the Commission’s Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our Commission filings are also available to the public from commercial document retrieval
services and at the Internet site maintained by the Commission at
www.sec.gov
.
We have filed with the Commission a registration
statement on Form S-3 relating to the securities covered by this prospectus and any prospectus supplement. This prospectus is a part of the registration statement and does not contain all the information in the registration statement. Whenever a
reference is made in this prospectus or any prospectus supplement to a contract or other document, the reference is only a summary and you should refer to the exhibits that are a part of the registration statement for a copy of the contract or other
document. You may review a copy of the registration statement at the Commission’s public reference room in Washington, D.C., as well as through the Commission’s Internet site.
The Commission allows us to “incorporate by reference” into this prospectus the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information we file later with the Commission will automatically update and supersede such
information. The following documents filed with the Commission are hereby incorporated by reference into this prospectus:
(a) Our Annual
Report on Form 10-KSB/A for the Year Ended December 31, 2007, filed on April 3, 2008, which contains audited financial statements for the most recent fiscal year for which such statements have been filed;
(b) Our Quarterly Report on Form 10-QSB for the quarter ended March 31, 2008, filed on May 13, 2008;
(c) Our Current Report on Form 8-K, filed on June 5, 2008; and
(d) Our Current Report on Form 8-K, filed on June 11, 2008;
In addition, all documents which we file
with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (including any Form 8-K in which the information is filed but not furnished) will be deemed to be incorporated by reference into this prospectus
and any prospectus supplements.
This prospectus is part of a registration statement that we filed with the Commission. Upon written or
oral request, we will provide, without charge, to each person, including beneficial owners of our securities, to whom a copy of this prospectus is delivered, a copy of any or all of the information incorporated by reference in this prospectus (other
than exhibits to such documents, unless the exhibits are specifically incorporated by reference in such documents). Your requests for copies should be directed to the Secretary, GeoResources, Inc., 110 Cypress Station Drive, Suite 220, Houston,
Texas 77090; telephone (281) 537-9920.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of registrant pursuant to the above, the registrant has been advised
that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
14
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