UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Amendment #1
Proxy Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed by a Party other than the
Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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CARBON
ENERGY CORPORATION
(Name of Registrant as Specified in Its
Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee
(Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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CARBON ENERGY CORPORATION
1700 Broadway, Suite 1170
Denver, CO 80290
August __, 2020
To the Stockholders of Carbon Energy Corporation:
You are cordially invited
to attend a Special Meeting of stockholders of Carbon Energy Corporation, a Delaware corporation (the “Company”), to
be held on August__, 2020, at _____ a.m. local time. The Special Meeting will be held at the offices of the Company which are located
at 1700 Broadway, Suite 1170, Denver, CO 80290.
At the Special
Meeting, you will be asked to consider and vote upon a proposal to amend the Company’s Amended and Restated Certificate
of Incorporation, to reverse stock split the Company’s common stock, (the “Reverse Stock Split”) at a ratio
of 4-for-1. If the Reverse Stock Split is approved, the Company will file with the Delaware Secretary of State a certificate of
amendment to its Amended and Restated Certificate of Incorporation, at which date (the “effective time”) a stockholder
owning fewer than four shares immediately prior to the effective time, would only be entitled to a fraction of a share of common
stock and will be paid cash in lieu of such fraction of a share, on the basis of $1.00, (the “Cash Payment”) for each
share of common stock held by the stockholder (the “Cashed Out Stockholders”) immediately prior to the effective time
and the Cashed Out Stockholders will no longer be stockholders of the Company.
The purpose of the
Reverse Stock Split is to enable the Company to reduce the number of record holders of its common stock below 300, which is the
level below which the Company can suspend its duty to file periodic and current reports and other information with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in
the accompanying proxy statement, the Company’s Board of Directors has determined that the costs of being a public reporting
company outweigh the benefits of being a public company. The actions the Company would take to suspend, and events that occur as
a result of such actions that would have the effect of suspending the Company’s reporting obligations under the Exchange
Act, and the registration of the Company’s common stock under Section 12(g) of the Exchange Act, are collectively referred
to as the “Transaction”. After giving effect to the Transaction, the Company will no longer be subject to the reporting
requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley
Act of 2002 (the “Sarbanes-Oxley Act”).
The Company anticipates
that after the Reverse Stock Split its common stock will continue to trade on the Pink Non-Current platform of the OTC Markets
Group.
Furthermore, after
giving effect to the Transaction and as necessary to maintain the Company’s suspension of its SEC reporting obligations,
the Company reserves the right to take additional actions that may be permitted under Delaware law, including further reverse stock
splits.
The Board of Directors
has determined (by a unanimous vote) that the Reverse Stock Split is in the best interests of the Company’s stockholders
and the specific terms of the Reverse Stock Split are fair to Cashed Out Stockholders.
The Board recommends
(by a unanimous vote of directors) that you vote “FOR” the adoption of the Reverse Stock Split. Please read the accompanying
proxy statement carefully.
Your vote is important. Whether
or not you plan to attend the Special Meeting, the Company urges you to please vote by proxy as soon as possible. If you do attend
the Special Meeting and desire to vote in person, you may do so, even though you have previously voted by proxy.
Sincerely,
Patrick R. McDonald
Chief Executive Officer
CARBON ENERGY CORPORATION
1700 Broadway, Suite 1170
Denver, CO 80290
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST____, 2020
To the Stockholders of Carbon Energy Corporation:
Notice is hereby given
that a special meeting of stockholders of Carbon Energy Corporation (the “Company”), will be held on August__, 2020,
at ______ a.m. local time. The Special Meeting will be held at the offices of the Company which are located at 1700 Broadway, Suite
1170, Denver, CO 80290. The Special Meeting is being held for the following purposes:
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to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation
to reverse split the Company’s common stock on a 4-for-1 basis; and
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to
transact such other business as may properly come before the Meeting.
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August__, 2020
is the record date for the determination of stockholders entitled to notice of and to vote at the Special Meeting (the “Record
Date”).
A copy of the proposed
form of amendment to the Company’s Amended and Restated Certificate of Incorporation is attached as Appendix A to
the accompanying proxy statement.
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Carbon Energy Corporation
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Patrick R. McDonald
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Chief Executive Officer
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August__, 2020
PLEASE INDICATE YOUR VOTING INSTRUCTIONS
ON THE ATTACHED PROXY CARD,
AND SIGN, DATE AND RETURN THE PROXY CARD.
TO SAVE THE COST OF FURTHER SOLICITATION,
PLEASE VOTE PROMPTLY.
PRELIMINARY
PROXY STATEMENT
CARBON ENERGY CORPORATION
1700 Broadway, Suite 1170
Denver, CO 80290
The accompanying
proxy is solicited by the Company’s directors for voting at the Special Meeting of shareholders to be held on August__,
2020 and at all adjournments of the Special Meeting. If the proxy is executed and returned, it will be voted at the Special Meeting
in accordance with any instructions, and if no specification is made, the proxy will be voted for the proposal set forth in the
accompanying notice of the Special Meeting. Shareholders who execute proxies may revoke them at any time before they are voted,
either by writing to the Company at the address shown above or in person at the time of the Special Meeting. Additionally, any
later dated proxy will revoke a previous proxy from the same shareholder. This proxy statement was posted on the Company’s
website on or about August__, 2020.
As of August__,
2020, the Company had:
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8,304,781 outstanding shares of common stock, with each common share entitled to one vote at the
Special Meeting, and
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50,000 outstanding shares of Series B preferred stock with each share entitled to 12.5 votes at
the Special Meeting.
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Provided a quorum consisting
of a majority of the shares entitled to vote is present at the meeting, in person or represented by proxy, the adoption of the
proposal to come before the Special Meeting will be approved if the affirmative vote of the majority of shares present in person
or represented by proxy at the Special Meeting approve the proposal. The approval of at least a majority of the Company’s
unaffiliated security holders is not required to adopt the Reverse Stock Split.
Shares of the Company’s
common stock represented by properly executed proxies that reflect abstentions or “broker non-votes” will be counted
as present for purposes of determining the presence of a quorum at the special meeting. “Broker non-votes” represent
shares held by brokerage firms in “street-name” with respect to which the broker has not received instructions from the
customer or otherwise does not have discretionary voting authority. Abstentions and broker non-votes will not be counted as having
voted against the proposal to be considered at the Special Meeting.
THE REVERSE
STOCK SPLIT AND OTHER ASPECTS OF THE TRANSACTION HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF THE REVERSE STOCK SPLIT, ANY OTHER ASPECTS OF TRANSACTION, OR THE UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION IN THE ATTACHED PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROPOSAL TO APPROVE A REVERSE SPLIT OF
THE
COMPANY’S COMMON STOCK
SUMMARY TERM SHEET
The following summary
term sheet highlights certain information about the Reverse Stock Split and other aspects of the Transaction, but may not contain
all of the information that is important to you. For a more complete description of the Reverse Stock Split and other aspects of
the Transaction, we urge you to carefully read this proxy statement.
At the Special
Meeting, you will be asked to consider and vote upon a proposal to amend the Company’s Certificate of Incorporation, to
reverse stock split the Company’s common stock at a ratio of 4-for-1, (the “Reverse Stock Split”). If the Reverse
Stock Split is approved, the Company will file with the Delaware Secretary of State a certificate of amendment to its certificate
of incorporation, at which date (the “effective time”) a stockholder owning fewer than four shares immediately prior
to the effective time, would only be entitled to a fraction of a share of common stock and will be paid cash in lieu of such fraction
of a share, on the basis of $1.00, (the “Cash Payment”) for each share of common stock held by the stockholder (the
“Cashed Out Stockholder”) immediately prior to effective time and the Cashed Out Stockholders will no longer be a
stockholder of the Company. As of August __, 2020, 90 shareholders that collectively owned 191 shares of the Company’s common
stock owned less than four shares of common stock. If the Reverse Stock Split is approved, the Company would pay $191.00 to these
Cashed Out Shareholders. The Company will use its own funds to pay the Cashed Out Stockholders.
The purpose of the
Reverse Stock Split is to enable the Company to reduce the number of record holders of its common stock below 300, which is the
level below which the Company can suspend its duty to file periodic and current reports and other information with the SEC under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in this proxy statement, the Company’s
Board of Directors has determined that the costs of being a public reporting company outweigh the benefits of being a public company.
The actions the Company would take to suspend, and events that occur as a result of such actions that would have the effect of
suspending its reporting obligations under the Exchange Act, and the registration of its common stock under Section 12(g) of the
Exchange Act, are collectively referred to as the “Transaction”. After giving effect to the Transaction, the Company
will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company,
including requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
The Company’s
officers, directors and each Yorktown Fund intend to vote in favor of the Reverse Stock Split since these persons believe the
Reverse Stock Split is in the best interest of the Company and its shareholders.
The Company anticipates
that after the Reverse Stock Split its common stock will trade on the Pink Non-Current platform of the OTC Markets Group.
Special
Factors
At the Special
Meeting, you will be asked to consider and vote upon a proposal to amend the Company’s Amended and Restated Certificate
of Incorporation, to reverse stock split the Company’s common stock at a ratio of 4-for-1, (the “Reverse Stock Split”).
If the Reverse Stock Split is approved the Company will file with the Delaware Secretary of State a certificate of amendment to
its Amended and Restated Certificate of Incorporation, at which date (the “effective time”) a stockholder owning fewer
than four shares immediately prior to the effective time, would only be entitled to a fraction of a share of common stock and
will be paid cash in lieu of such fraction of a share on the basis of $1.00, (the “Cash Payment”) for each share of
common stock held by the stockholder (the “Cashed Out Stockholder”) immediately prior to the effective time and the
Cashed Out Stockholder will no longer be a stockholder of the Company. As of August __, 2020, 90 shareholders that collectively
owned 191 shares of the Company’s common stock owned less than four shares of common stock. If the Reverse Split is approved,
the Company would pay $191.00 to these Cashed Out Shareholders. The Company will use its own funds to pay the Cashed Out Stockholders.
Each Cashed Out Stockholder will receive a check by mail at such Cashed Out Stockholder’s registered address as soon as
practicable after the effective time. None of the Cashed Out Stockholders are officers, directors or affiliates of the Company.
The purpose of
the Reverse Stock Split is to enable the Company to reduce the number of record holders of its common stock below 300, which is
the level below which the Company can suspend its duty to file periodic and current reports and other information with the SEC
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in this proxy statement,
the Company’s Board of Directors has determined that the costs of being a public reporting company outweigh the benefits
of being a public company. The actions the Company would take to suspend, and events that occur as a result of such actions that
would have the effect of suspending its reporting obligations under the Exchange Act, and the registration of its common stock
under Section 12(g) of the Exchange Act, are collectively referred to as the “Transaction”. After giving effect to
the Transaction, the Company will no longer be subject to the reporting requirements under the Exchange Act or other requirements
applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
Based upon the
closing price of the Company’s common stock on August __, 2020 three shares of its common stock were worth approximately
$3.00. The Company does not know any securities broker which would accept securities worth $3.00 for deposit or which would sell
securities worth $3.00 for any customer. Since a stockholder of record owning fewer than four shares immediately prior to the
Reverse Stock Split will be paid $1.00 for each share held by the stockholder, the Company’s Board of Directors has determined
(by a unanimous vote) that the Reverse Stock Split is in the best interests of the Company’s stockholders and the specific
terms of the Reverse Stock Split are fair to the Cashed Out Stockholders.
The Company’s
Board of Directors has also determined (by a unanimous vote) that the specific terms of the Reverse Stock Split are in the best
interest of the Company’s stockholders which will not be Cashed Out for the reasons shown below under the caption “Advantages
of the Reverse Stock Split”.
Since the cost to the
Company of reducing the record holders below 300 is $191.00 (exclusive of legal, printing and mailing costs associated with this
proxy statement) the Company did not consider any alternatives to the Reverse Stock Split as a means of reducing the number of
record holders of its common stock below 300.
Neither the Company
nor any other person (to the knowledge of the Company) has received any report, opinion or appraisal from an outside party that
is materially related to the Reverse Stock Split.
Advantages of the Reverse Stock Split
If the Reverse Stock
Split occurs, there will be certain advantages to the Company’s stockholders, including the following:
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After giving effect to the Reverse Stock Split, the Company’s
compliance obligations under the Exchange Act and the Sarbanes-Oxley Act will be suspended and the Company expects to realize
recurring savings of approximately $675,000 per year.
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The Company will also save the significant amount of
time and effort expended by its management and employees on the preparation of SEC filings and compliance with the Exchange Act
and the Sarbanes-Oxley Act.
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Potential Disadvantages of the Reverse
Stock Split
If the Reverse
Stock Split occurs, there will be certain potential disadvantages to the Company’s stockholders, including the following:
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Cashed Out Stockholders will no longer have any ownership
interest in the Company.
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The Company will, after giving effect to the Reverse Stock Split, cease to file annual, quarterly,
current, and other reports and documents with the SEC. As a result, the Company’s stockholders will have significantly less
information about its business, operations, and financial performance than they have currently.
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The Company will no longer be subject to the liability provisions of the Exchange Act or the provisions
of the Sarbanes-Oxley Act.
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The Company’s officers, directors and 10% stockholders will no longer be subject to the reporting
requirements of Section 16 of the Exchange Act or be subject to the prohibitions against retaining short-swing profits for trading
our common stock. Persons acquiring 5% of the Company’s common stock will no longer be required to report their beneficial
ownership under the Exchange Act.
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Other Matters
Only the Company’s
officers and directors intend to solicit votes with respect to the Reverse Stock Split.
Generally, a Cashed
Out Stockholder who receives cash for a fractional share as a result of the Reverse Stock Split will recognize capital gain or
loss for United States federal income tax purposes based upon the amount the Cashed Out Stockholder paid for the fractional share.
A stockholder who does not receive cash for a fractional share as a result of the Reverse Stock Split generally will not recognize
any gain or loss for United States federal income tax purposes. The Company believes that the Reverse Stock Split generally should
be treated as a tax-free “recapitalization” or other non-recognition event for federal income tax purposes in which
case the Reverse Stock Split should have no material federal income tax consequences to the Company.
No ruling from
the IRS or opinion of counsel has been or will be obtained regarding the United States federal income tax consequences to stockholders
in connection with the reverse stock split. Accordingly, each stockholder is encouraged to consult their own tax advisor as to
the particular federal, state, local, foreign, and other tax consequences of the Reverse Stock Split in light of their individual
circumstances.
Shareholders owning
four or more shares on the effective date of the Reverse Stock Split will receive fractional shares in the event the number of
shares they own is not a multiple of four.
The Reverse Stock
Split will be affected at both the record holder level and the street name level. For persons holding shares of common stock in
“street name,” the broker, bank or other nominee holding the shares is considered the stockholder of record with respect
to those shares. Depending upon their internal procedures, the broker, bank or other nominee may not be obligated to treat the
Reverse Stock Split as affecting beneficial holders’ shares. The Company intends to treat persons who hold shares of common
stock in street name in the same manner as persons who hold shares of common stock in their own names. Banks, brokers or other
nominees will be instructed to affect the Reverse Stock Split for their customers holding the Company’s common stock in
street name. However, these banks, brokers or other nominees may have different procedures than registered stockholders for processing
the Reverse Stock Split and making payments for fractional shares. Persons holding shares of common stock in street name and having
any questions in this regard should contact their bank, broker or other nominee.
Shareholders holding
more than three shares may nevertheless have their shares Cashed Out if their shares are held in a combination of accounts at
several brokerage firms. For those shareholders in this situation which desire to remain a stockholder of the Company after the
Reverse Stock Split, the Company recommends that the shareholder combine the shareholder’s holdings in one brokerage account
or become a record holder prior to the effective time of the Reverse Stock Split. A shareholder should be able to determine whether
the shareholder’s shares will be Cashed Out by examining the shareholder’s brokerage account statements to see if
the shareholder holds less than four shares in any one account.
If a shareholder
owns fewer than four shares of common stock before the Reverse Stock Split, the only way a shareholder can continue to be a stockholder
of the Company after the Reverse Stock Split is to purchase, prior to the effective time of the Reverse Stock Split, sufficient
additional shares such that the shareholder will own at least four shares at the effective time of the Reverse Stock Split.
The Company does
not intend to forward split its common stock if the Reverse Stock Split is approved at the special meeting.
Under Delaware law,
no appraisal or dissenters’ rights are available to the Company’s stockholders in connection with the Reverse Stock
Split.
No provision has been
made by the Company in connection with the Reverse Stock Split to grant any of the holders of Company’s common stock or Series
B preferred stock access to the corporate files of the Company or to obtain counsel or appraisal services at the expense of the
Company.
A majority of the Company’s
directors who are not employees of the Company have not retained an unaffiliated representative to act solely on behalf of unaffiliated
security holders for purposes of negotiating the Reverse Stock Split and/or preparing a report concerning the fairness of the Reverse
Stock Split.
The Company anticipates
that after the Reverse Stock Split its common stock will trade on the Pink Non-Current platform of the OTC Markets Group.
The Company’s
Amended and Restated Certificate of Incorporation provides that the Company is presently authorized to issue 35,000,000 shares
common stock. The Reverse Stock Split, if adopted, would not change the number of shares of common stock which the Company is authorized
to issue. A reverse split would reduce the number of the Company’s outstanding shares, which would enable the Company to
issue more shares than it would be able to issue if the Reverse Stock Split was not adopted.
After giving effect
to the Reverse Stock Split and as necessary to maintain the Company’s suspension of its SEC reporting obligations, the Company
reserves the right to take additional actions that may be permitted under Delaware law, including further reverse stock splits.
The Company’s
Board of Directors may abandon the proposed Stock Split at any time prior to its completion, whether prior to or following the
Special Meeting, if it believes the Reverse Stock Split is no longer in the best interests of the Company or its stockholders.
The Company’s
Board of Directors recommends that stockholders vote FOR the Reverse Stock Split.
INFORMATION CONCERNING CARBON ENERGY
CORPORATION
Carbon Energy Corporation
was incorporated in Delaware in 2007.
The Company’s
address and telephone number are: 1700 Broadway, Suite 1170, Denver, Colorado, 80290, (720) 407-7043.
The Company is an independent
oil and natural gas company engaged in the acquisition, exploration, development and production of oil, natural gas and natural
gas liquids in the United States. The Company currently develops and operates oil and gas properties in California’s Ventura
Basin.
For purposes of Schedule
13E-3 and Regulation M-A of the Securities and Exchange Commission, the Company is the “Filing Person” and the “Subject
Company”.
Management
The names, titles,
and ages of our executive officers and directors are shown below.
Name
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Age
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Position
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Patrick R. McDonald
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63
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Chief Executive Officer, Director
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Erich W. Kirsch
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35
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Principal Financial and Accounting Officer, Secretary and Treasurer
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James H. Brandi
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71
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Chairman of the Board
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John A. Bailey
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50
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Director
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David H. Kennedy
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70
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Director
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Peter A. Leidel
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63
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Director
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Edwin H. Morgens
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78
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Director
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The following information
pertains to our executive officers and directors and their principal occupations and other public company directorships for at
least the last five years.
Patrick R. McDonald. Mr. McDonald
is Chief Executive Officer and Director of the Company and has been Chief Executive Officer since 2004. From 1998 to 2003, Mr.
McDonald was Chief Executive Officer and Director of Carbon Energy Corporation, an oil and gas exploration and production company.
From 1987 to 1997 Mr. McDonald was Chief Executive Officer and Director of Interenergy Corporation, a natural gas gathering, processing
and marketing company. Prior to that he worked as an exploration geologist with Texaco International Exploration Company where
he was responsible for oil and gas exploration efforts in the Middle East and Far East. Mr. McDonald served as Chief Executive
Officer of Forest Oil Corporation from June 2012 to December 2014. Mr. McDonald is Chairman of the Board of Prairie Provident Resources
(TSX: PPR), an exploration and production company based in Calgary, Alberta, Canada. Mr. McDonald received a Bachelor’s degree
in both Geology and Economics from Ohio Wesleyan University and a Master’s degree in Business Administration (Finance) from
New York University. Mr. McDonald is a Certified Petroleum Geologist and is a member of the American Association of the Petroleum
Geologists and of the Canadian Society of Petroleum Geologists.
Erich W. Kirsch. Mr. Kirsch was
appointed the Company’s Principal Financial and Accounting Officer on June 11, 2020. Mr. Kirsch has served as the Company’s
Senior Vice President, Finance and Accounting since August 2019, and previously served as the Company’s Vice President, Accounting
and Finance from March 2018 to August 2019 and as the Company’s Director of Financial Reporting from May 2017 to March 2018.
From November 2015 to January 2017, Mr. Kirsch served as the Director of Accounting and Finance at Star Mountain Resources, Inc.
From April 2013 to March 2016, Mr. Kirsch served as the Corporate Controller of Rare Element Resources Ltd.
James H. Brandi. Mr. Brandi is Chairman
of the Board of Directors and has been a Director since 2012. Mr. Brandi was formerly a Managing Director of BNP Paribas Securities
Corp., where he served from 2010 until 2011. From 2005 to 2010, Mr. Brandi was a partner of Hill Street Capital, LLC, a financial
advisory and private investment firm purchased by BNP Paribas in 2010. From 2001 to 2005, Mr. Brandi was a Managing Director at
UBS Securities, LLC, where he was the Deputy Global Head of the Energy and Power Groups. Prior to 2001, Mr. Brandi was a Managing
Director at Dillon, Read & Co. Inc. and later its successor firm, UBS Warburg, concentrating on transactions in the energy
and consumer goods areas. Mr. Brandi currently serves as a director of OGE Energy Corp (NYSE: OGE) and had served as a member of
the board of directors of Approach Resources, Inc. from 2007-2017.
John A. Bailey. Mr. Bailey has
been a Director since December 2019. Since May 2019, Mr. Bailey has been employed by Yorktown Partners LLC, a manager of private
equity partnerships which invest in the energy industry. Mr. Bailey was previously employed at Voya Investment Management since
June 2011 with roles in investment research and portfolio management. Mr. Bailey was a founder and Managing Partner of 1859 Partners
LLC, an energy investment partnership, from March 2009 until June 2011. From December 2006 until August 2008, Mr. Bailey was a
Portfolio Manager at Carlyle-Blue Wave Partners Management, LP, an investment partnership. Mr. Bailey served as a Director
of LR Energy from November 2011 until its merger with Vanguard Natural Resources in October 2015. Mr. Bailey also served as a
Director of Encore Acquisition Company, a NYSE-listed oil and gas exploration and production company, from May 2006 until its
merger with Denbury Resources Inc. in March 2010.
David H. Kennedy. Mr. Kennedy has
been a Director since December 2014 and previously served as a director from February 2011 to March 2012. Mr. Kennedy is since
2005 an Executive Advisor to Cadent Energy Partners. From 2001 - 2004, Mr. Kennedy served as an advisor to RBC Energy Fund and
served on the boards of several of its portfolio companies. Mr. Kennedy was a managing director of First Reserve Corporation from
its founding in 1981 until 1998, serving on boards of several of its portfolio companies. From 1974 to 1981, Mr. Kennedy was employed
by Price Waterhouse. Mr. Kennedy served as a director of predecessor company Carbon Energy Corporation.
Peter A. Leidel. Mr. Leidel
has been a Director since 2005. Since 1997, Mr. Leidel is a founder and member of Yorktown Partners LLC, a manager of private
equity partnerships which invest in the energy industry. Previously, Mr. Leidel was a partner at Dillon, Read & Co. Inc.,
held corporate treasury positions at Mobil Corporation and worked for KPMG Peat Marwick and the U.S. Patent and Trademark Office.
Mr. Leidel is a director of Ramaco Resources, Inc. (Nasdaq: METC), Extraction Oil & Gas, Inc. (Nasdaq: XOG) and certain non-public
companies in which funds and other investment vehicles managed by Yorktown hold equity interests. Mr. Leidel served as a director
of predecessor companies, Carbon Energy Corporation and Interenergy Corporation.
Edwin H. Morgens. Mr. Morgens has
been a Director since May 2012. Since 1967, Mr. Morgens is Chairman and Co-founder of Morgens, Waterfall, Vintiadis & Company,
Inc., a New York investment firm. Mr. Morgens is a trustee of the American Museum of Natural History, an Overseer of the Weill
Cornell Medical College and emeritus trustee of Cornell University.
None of the Company’s
officers or directors have been convicted in a criminal proceeding during the past five years (excluding traffic violations or
similar misdemeanors).
None of the Company’s
officers or directors have been a party to any judicial or administrative proceeding during the past five years (except for matters
that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the officer or
director from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any
violation of federal or state securities laws.
On May 21, 2020
the Company granted shares of its restricted common stock to the following officers and directors:
Name
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Shares
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Patrick R. McDonald
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25,000
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James H. Brandi
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5,000
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John A. Bailey
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4,000
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David H. Kennedy
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4,000
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Peter A. Leidel
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|
|
4,000
|
|
Edwin H. Morgan
|
|
|
4,000
|
|
On May 26, 2020 Patrick
McDonald returned 20,286 shares of common stock to the Company in payment of his tax liability associated with his award of restricted
common stock. On June 5, 2020 Mr. McDonald purchased 100 shares of common stock in the open market at a price of $3.06 per share.
On July 6, 2020 Mr. McDonald purchased 939 shares of common stock in the open market at a price of $1.10 per share.
Principal Stockholders
The following table
lists, as of August __, 2020, the shareholdings of (i) each person owning beneficially 5% or more of the Company’s common
stock; (ii) each executive officer and director of the Company, and (iii) all officers and directors as a group. Unless otherwise
indicated, each owner has sole voting and investment power over his shares of common stock. The business address for each of the
Company’s officers and directors is 1700 Broadway, Suite 1170, Denver, Colorado 80290.
Name and Address of Beneficial Owner
|
|
Shares Beneficially
Owned(1)
|
|
|
Percent of Class(2)
|
|
|
|
|
|
|
|
|
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yorktown Energy Partners V, L.P.
|
|
|
896,916
|
(3)
|
|
|
10.8
|
%
|
410 Park Avenue,
|
|
|
|
|
|
|
|
|
19th Floor
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yorktown Energy Partners VI, L.P.
|
|
|
896,916
|
(4)
|
|
|
10.8
|
%
|
410 Park Avenue,
|
|
|
|
|
|
|
|
|
19th Floor
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yorktown Energy Partners IX, L.P.
|
|
|
1,111,112
|
(5)
|
|
|
13.4
|
%
|
410 Park Avenue,
|
|
|
|
|
|
|
|
|
19th Floor
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yorktown Energy Partners XI, L.P.
|
|
|
2,584,829
|
(6)(7)
|
|
|
28.9
|
%
|
410 Park Avenue,
|
|
|
|
|
|
|
|
|
19th Floor
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arbiter Partners QP, LP(8)
|
|
|
655,733
|
|
|
|
8.2
|
%
|
530 Fifth Avenue
|
|
|
|
|
|
|
|
|
20th Floor
|
|
|
|
|
|
|
|
|
New York, NY 10036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AWM Investment Company Inc.(9)
|
|
|
706,549
|
|
|
|
8.9
|
%
|
c/o Special Situation Funds
|
|
|
|
|
|
|
|
|
527 Madison Avenue,
|
|
|
|
|
|
|
|
|
Suite 2600
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
Executive Officers and Directors
|
|
Shares Beneficially
Owned(1)
|
|
|
Percent of Class(2)
|
|
|
|
|
|
|
|
|
Patrick R. McDonald, Chief Executive Officer and Director(10)
|
|
|
340,553
|
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
Erich W. Kirsch, Principal Financial and Accounting Officer
|
|
|
51,149
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
James H. Brandi, Director
|
|
|
42,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
John A. Bailey, Director
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
David H. Kennedy, Director
|
|
|
32,154
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Peter A. Leidel, Director
|
|
|
36,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Edwin H. Morgens, Director
|
|
|
119,334
|
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (seven persons) ()
|
|
|
621,190
|
|
|
|
9.7
|
%
|
(1)
|
The amounts and percentages of common stock beneficially owned are reported on the bases of rules
of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to
be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or
direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of
such security. In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which the information is provided. Securities
that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not
for purposes of computing any other person’s percentage. Further, under the rules of the SEC, more than one person may be
deemed beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest. Except as otherwise indicated in these footnotes, each of the beneficial owners has, to our knowledge,
sole voting and investment power with respect to the indicated shares of common stock.
|
(2)
|
Calculated in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 based on 8,304,781
shares of our common stock issued and outstanding on August __, 2020. Percentages are rounded to the nearest one-tenth of one percent.
|
(3)
|
Yorktown V Company LLC is the sole general partner of Yorktown Energy Partners V, L.P. As a result,
Yorktown V Company LLC has the power to vote or direct the vote or to dispose or direct the disposition of the shares owned by
Yorktown Energy Partners V, L.P. Yorktown V Company LLC disclaims beneficial ownership of the shares held by Yorktown Energy Partners
V, L.P. in excess of its pecuniary interest therein. Mr. Leidel is a manager of Yorktown V Company LLC, and Mr. Bailey is an employee
of Yorktown Partners LLC, which manages the investments of Yorktown Energy Partners V, L.P. under the direction of Yorktown V Company
LLC. Messrs. Leidel and Bailey do not have sole or shared voting or investment power within the meaning of Rule 13d-3 under the
Exchange Act with respect to the shares of common stock held by such investment fund and disclaim beneficial ownership of the shares
of common stock held by Yorktown Energy Partners V, L.P.
|
(4)
|
Yorktown VI Company LP is the sole general partner of Yorktown Energy Partners VI, L.P. Yorktown
VI Associates LLC is the sole general partner of Yorktown VI Company LP. As a result, Yorktown VI Associates LLC has the power
to vote or direct the vote or to dispose or direct the disposition of the shares owned by Yorktown Energy Partners VI, L.P. Yorktown
VI Company LP and Yorktown VI Associates LLC disclaim beneficial ownership of the shares held by Yorktown Energy Partners VI, L.P.
in excess of their pecuniary interest therein. Mr. Leidel is a manager of Yorktown VI Associates LLC, and Mr. Bailey is an employee
of Yorktown Partners LLC, which manages the investments of Yorktown Energy Partners VI, L.P. under the direction of Yorktown VI
Associates LLC. Messrs. Leidel and Bailey do not have sole or shared voting or investment power within the meaning of Rule 13d-3
under the Exchange Act with respect to the shares of common stock held by such investment fund and disclaim beneficial ownership
of the shares of common stock held by Yorktown Energy Partners VI, L.P.
|
(5)
|
Yorktown IX Company LP is the sole general partner of Yorktown Energy Partners IX, L.P. Yorktown
IX Associates LLC is the sole general partner of Yorktown IX Company LP. As a result, Yorktown IX Associates LLC has the power
to vote or direct the vote or to dispose or direct the disposition of the shares owned by Yorktown Energy Partners IX, L.P. Yorktown
IX Company LP and Yorktown IX Associates LLC disclaim beneficial ownership of the shares held by Yorktown Energy Partners IX, L.P.
in excess of their pecuniary interest therein. Mr. Leidel is a manager of Yorktown IX Associates LLC, and Mr. Bailey is an employee
of Yorktown Partners LLC, which manages the investments of Yorktown Energy Partners IX, L.P. under the direction of Yorktown IX
Associates LLC. Messrs. Leidel and Bailey do not have sole or shared voting or investment power within the meaning of Rule 13d-3
under the Exchange Act with respect to the shares of common stock held by such investment fund and disclaim beneficial ownership
of the shares of common stock held by Yorktown Energy Partners IX, L.P.
|
(6)
|
Yorktown XI Company LP is the sole general partner of Yorktown Energy Partners XI, L.P. Yorktown
XI Associates LLC is the sole general partner of Yorktown XI Company LP. As a result, Yorktown XI Associates LLC has the power
to vote or direct the vote or to dispose or direct the disposition of the shares owned by Yorktown Energy Partners XI, L.P. Yorktown
XI Company LP and Yorktown XI Associates LLC disclaim beneficial ownership of the shares held by Yorktown Energy Partners XI, L.P.
in excess of their pecuniary interest therein. Mr. Leidel is a manager of Yorktown XI Associates LLC, and Mr. Bailey is an employee
of Yorktown Partners LLC, which manages the investments of Yorktown Energy Partners XI, L.P. under the direction of Yorktown XI
Associates LLC. Messrs. Leidel and Bailey do not have sole or shared voting or investment power within the meaning of Rule 13d-3
under the Exchange Act with respect to the shares of common stock held by such investment fund and disclaim beneficial ownership
of the shares of common stock held by Yorktown Energy Partners XI, L.P.
|
(7)
|
The amount reported includes 50,000 shares of Series B convertible preferred stock which currently
may be converted into up to 625,000 shares of our common stock.
|
(8)
|
Arbiter Partners QP, LP holds sole voting and investment power over these shares. Arbiter Partners
Capital Management LLC acts as investment advisor on behalf of Arbiter Partners QP, LP and on behalf of certain other managed
accounts none of which hold more than five percent of the common stock of the Company.
|
(9)
|
Consists of (i) 490,186 common stock shares owned by Special Situations Fund III QP, L.P. (“SSFQP”),
(ii) 144,134 common stock shares owned by Special Situations Cayman Fund, L.P. (“Cayman”), and (iii) 72,229 common
stock shares owned by Special Situations Private Equity Fund L.P. (“SSPE”). AWM Investment Company, Inc., a Delaware
Corporation (“AWM”) is the investment advisor to SSFQP, Cayman and SSPE. AWM holds sole voting and investment power
over these shares.
|
(10)
|
Includes (i) 24,136 shares owned by McDonald Energy, LLC over which Mr. McDonald has voting and
investment power.
|
The following table
lists, as of August __, 2020, the shareholdings of each person owning the Company’s Series B preferred stock. Unless otherwise
indicated, each owner has sole voting and investment power over the shares of preferred stock:
Name and Address of Beneficial Owner
|
|
Shares Beneficially
Owned
|
|
|
Percent of
Class
|
|
|
|
|
|
|
|
|
|
|
Yorktown Energy Partners XI, L.P.
|
|
|
50,000
|
|
|
|
100
|
%
|
(1)
|
Each Series B preferred share is currently convertible into 12.5 shares of the Company’s
common stock and is currently entitled to 12.5 votes on any matter submitted to the Company’s stockholders.
|
The Reverse Stock Split
will have an insignificant effect on the relative voting power of the Company’s stockholders. Based on current record and
beneficial owner information, the Reverse Stock Split will result in an insignificant change in the relative voting power of the
Company’s directors and executive officers as a group.
None of the Company’s
officers, directors or affiliates currently intend to tender or sell the Company’s common stock owned or held by them to
the Company.
Market for Our Common Stock
The Company has one
class of common stock outstanding that is quoted on the OTCQB under the symbol CRBO.
The following table
sets forth the high and low bid price per share of our common stock for the periods presented, as quoted on the OTCQB. The information
reflects inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions:
Year Ended December 31,
|
|
Quarter
|
|
High
|
|
|
Low
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
First
|
|
$
|
11.00
|
|
|
$
|
9.80
|
|
|
|
Second
|
|
$
|
12.00
|
|
|
$
|
9.80
|
|
|
|
Third
|
|
$
|
13.00
|
|
|
$
|
9.50
|
|
|
|
Fourth
|
|
$
|
9.25
|
|
|
$
|
6.50
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
First
|
|
$
|
10.00
|
|
|
$
|
9.25
|
|
|
|
Second
|
|
$
|
10.00
|
|
|
$
|
5.00
|
|
|
|
Third
|
|
$
|
8.00
|
|
|
$
|
4.00
|
|
|
|
Fourth
|
|
$
|
4.00
|
|
|
$
|
3.15
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
First
|
|
$
|
4.50
|
|
|
$
|
3.15
|
|
|
|
Second
|
|
$
|
4.98
|
|
|
$
|
1.18
|
|
The limited and sporadic
quotations of our common stock do not constitute an established trading market for the Company’s common stock, and there
can be no assurance that an active market will develop in the future.
As of August 4,
2020:
|
●
|
the closing price of the
Company’s common stock on the OTCQB was $____ per share.
|
|
●
|
there were 310 holders of record of the Company’s common stock. The number of holders does
not include the stockholders for whom shares are held in a “nominee” or “street” name; and
|
|
●
|
the Company had 8,304,781 outstanding shares of common stock.
|
The Company has not
to date paid any cash dividends on its common stock and does not intend to pay any dividends in the foreseeable future. The payment
of dividends will be within the discretion of the Board of Directors.
The terms of the Company’s
loan agreements with two lenders prohibit the Company from paying dividends on the Company’s stock while amounts are owed
under the loan agreements.
The provisions in the
Company’s Amended and Restated Certificate of Incorporation relating to its preferred stock allow its directors to issue
preferred stock with rights to multiple votes per share and dividend rights which would have priority over any dividends paid with
respect to its common stock. The issuance of preferred stock with such rights may make more difficult the removal of management
even if such removal would be considered beneficial to stockholders generally, and will have the effect of limiting stockholders
participation in certain transactions such as mergers or tender offers if such transactions are not favored by incumbent management.
Yorktown Energy Partners
As of August __,
2020:
|
●
|
Yorktown Energy Partners V, L.P.,
|
|
●
|
Yorktown Energy Partners VI, L.P.,
|
|
●
|
Yorktown Energy Partners IX, L.P., and
|
|
●
|
Yorktown Energy Partners XI, L.P.
|
each, a “Yorktown Fund”,
owned greater than 10% of the Company’s outstanding common stock, and Yorktown Energy Partners XI, L.P. owned 50,000 shares
of the Company’s Series B preferred stock or 100% of the outstanding Series B preferred shares. Accordingly, each Yorktown
Fund may be deemed an affiliate of the Company.
Peter A. Leidel,
a director of the Company, is a managing member of the indirect general partner of each Yorktown Fund. John A. Bailey, a director
of the Company, is an employee of Yorktown Partners, LLC, which manages the investments of each Yorktown Fund under the direction
of the indirect general partner of such Yorktown Fund.
Yorktown V Company
LLC (“Yorktown V Company”) is the sole general partner of Yorktown Energy Partners V, L.P. As a result, Yorktown V
Company controls the voting of the Company shares owned by Yorktown Energy Partners V, L.P.
Yorktown VI Company
LP (“Yorktown VI Company”) is the sole general partner of Yorktown VI. Yorktown VI Associates LLC (“Yorktown
VI Associates”) is the sole general partner of Yorktown VI Company. As a result, Yorktown VI Associates controls the voting
of the Company shares owned by Yorktown Energy Partners VI, L.P.
Yorktown IX Company
LP (“Yorktown IX Company”) is the sole general partner of Yorktown IX. Yorktown IX Associates LLC (“Yorktown
IX Associates”) is the sole general partner of Yorktown IX Company. As a result, Yorktown IX Associates controls the voting
of the Company shares owned by Yorktown Energy Partners IX, L.P.
Yorktown XI Company
LP (“Yorktown XI Company”) is the sole general partner of Yorktown XI. Yorktown XI Associates LLC (“Yorktown
XI Associates”) is the sole general partner of Yorktown XI Company. As a result, Yorktown XI Associates controls the voting
of the Company shares owned by Yorktown Energy Partners XI, L.P.
Each Yorktown Fund
intends to vote its shares in favor of the Reverse Stock Split.
See “Management”
and “Principal Stockholders” for information concerning Mr. Bailey and Mr. Leidel and each Yorktown Fund’s ownership
of the Company’s common stock.
Based upon the
closing price of the Company’s common stock on August 4, 2020 three shares of its common stock were worth approximately
$3.00. No Yorktown Fund knows any securities broker which would accept securities worth $3.00 for deposit or which would sell
securities worth $3.00 for any customer. Since a stockholder of record owning fewer than four shares immediately prior to the
Reverse Stock Split will be paid $1.00 for each share held by the stockholder, each Yorktown Fund has determined that the Reverse
Stock Split is in the best interests of the Company’s stockholders and the specific terms of the Reverse Stock Split are
fair to the Cashed Out Stockholders.
Each Yorktown Fund
has also determined that the specific terms of the Reverse Stock Split are in the best interest of the Company’s stockholders
which will not be Cashed Out for the reasons shown above under the caption “Advantages of the Reverse Stock Split”.
Since the cost
to the Company of reducing the record holders below 300 is $191.00 (exclusive of legal, printing and mailing costs associated
with this proxy statement) No Yorktown Fund considered any alternatives to the Reverse Stock Split as a means of reducing the
number of record holders of its common stock below 300.
No Yorktown Fund
nor any other person (to the knowledge of such Yorktown Fund) has received any report, opinion or appraisal from an outside party
that is materially related to the Reverse Stock Split.
No Yorktown Fund
intends to solicit votes with respect to the Reverse Stock Split.
No Yorktown Fund
nor any Yorktown Fund officer, manager or member has been convicted in a criminal proceeding during the past five years (excluding
traffic violations or similar misdemeanors).
No Yorktown Fund
nor any Yorktown Fund officer, manager or member has been a party to any judicial or administrative proceeding during the past
five years (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final
order enjoining the officer or director from future violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities laws.
Each Yorktown Fund
is a limited partnership organized under the laws of Delaware. Each Yorktown Fund’s address and telephone number are:
410 Park Avenue
19th Floor
New York, NY 10022
(212) 515-2114
Summary Financial Information
(In thousands, except per share amounts)
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
26,269
|
|
|
|
34,010
|
|
|
|
36,027
|
|
|
|
29,032
|
|
Non-current assets
|
|
|
271,985
|
|
|
|
276,881
|
|
|
|
272,359
|
|
|
|
277,032
|
|
Current liabilities
|
|
|
48,718
|
|
|
|
52,855
|
|
|
|
40,800
|
|
|
|
49,215
|
|
Non-current liabilities
|
|
|
173,315
|
|
|
|
182,001
|
|
|
|
175,706
|
|
|
|
187,259
|
|
Stockholders’ equity (1)
|
|
|
50,071
|
|
|
|
47,751
|
|
|
|
60,074
|
|
|
|
43,874
|
|
Non-controlling interests
|
|
|
26,150
|
|
|
|
28,284
|
|
|
|
31,806
|
|
|
|
25,716
|
|
Total stockholders’ equity
|
|
|
76,221
|
|
|
|
76,035
|
|
|
|
91,880
|
|
|
|
69,590
|
|
|
|
Year Ended December 31,
|
|
|
Three Months Ended March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2020
|
|
|
2019
|
|
Gross Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before non-controlling interests and preferred shares
|
|
|
(1,001
|
)
|
|
|
12,779
|
|
|
|
15,458
|
|
|
|
(6,690
|
)
|
Net income (loss) attributable to non-controlling Interests
|
|
|
(2,098
|
)
|
|
|
4,375
|
|
|
|
5,659
|
|
|
|
(2,590
|
)
|
Net income (loss) attributable to controlling interests before preferred shares
|
|
|
1,097
|
|
|
|
8,404
|
|
|
|
9,799
|
|
|
|
(4,100
|
)
|
Net income (loss) attributable to preferred shares – beneficial conversion feature
|
|
|
-
|
|
|
|
1,125
|
|
|
|
-
|
|
|
|
-
|
|
Net income attributable to preferred shares – preferred return
|
|
|
300
|
|
|
|
224
|
|
|
|
75
|
|
|
|
75
|
|
Net income (loss) attributable to common shares
|
|
|
797
|
|
|
|
7,055
|
|
|
|
9,724
|
|
|
|
(4,175
|
)
|
Income (loss) per share from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
.10
|
|
|
$
|
.94
|
|
|
$
|
1.25
|
|
|
$
|
(0.54
|
)
|
Diluted
|
|
$
|
.10
|
|
|
$
|
.87
|
|
|
$
|
1.20
|
|
|
$
|
(0.54
|
)
|
Net income (loss) per share from all operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
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$
|
.10
|
|
|
$
|
.94
|
|
|
$
|
1.25
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|
|
$
|
(0.54
|
)
|
Diluted
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|
$
|
.10
|
|
|
$
|
.87
|
|
|
$
|
1.20
|
|
|
$
|
(0.54
|
)
|
Book value per share
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|
|
|
|
|
|
|
|
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|
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|
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(1)
|
Exclusive of non-controlling interests.
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The more complete financial
statements if the Company are incorporated by reference. See “Incorporation of Certain Documents by Reference” below.
Other
During the last two
years, none of the Company’s directors, executive officers or 10% stockholders have entered into any transactions with the
Company.
The Company has not
purchased any shares of its common stock within the past two years.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
In the Company’s
filings with the SEC, information is sometimes incorporated by reference. This means that the Company is referring you to information
that it has filed separately with the SEC. The information incorporated by reference should be considered part of this proxy statement,
except for any information superseded by information contained directly in this proxy statement or in any other subsequently filed
document.
This proxy statement
incorporates by reference the following documents that the Company has previously filed with the SEC. They contain important information
about the Company and its financial condition.
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●
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Quarterly Reports on Form 10-Q for the period ended March 31, 2020 and June 30, 2020;
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●
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Current Reports on Form 8-K filed with the SEC on February 21, 2020, April 8, 2020, May 6, 2020, May 29, 2020, June 17, 2020, and July 16, 2020.
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●
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Audited consolidated balance sheets as of December 31, 2019 and 2018, the related consolidated
statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December
31, 2019, and the related notes to the Company’s financial statements, are contained in its Annual Report on Form 10-K for
the fiscal year ended December 31, 2019; and
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●
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Unaudited consolidated condensed balance sheets as of March 31, 2020 and 2019, the related
consolidated condensed statements of operations, stockholders’ equity, and cash flows for the three months ended March 31,
2020 and 2019, and the related notes to the Company’s financial statements, are contained in its Quarterly Report on Form 10-Q for the period ended March 31, 2020.
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The Company will
send any stockholder of record as of the record date for the Special Meeting a copy of any document incorporated by reference
into this proxy statement within three business days of receipt of a request. The request for any document incorporated by reference
should be addressed to us at the following address: 1700 Broadway, Suite 1170, Denver, CO 80290. Documents incorporated by referenced
are also are available on our website, www.carbonenergycorp.com and the SEC’s website at http://www.sec.gov.
WHERE YOU CAN FIND MORE INFORMATION
The Company is
subject to the informational requirements of the Securities Exchange Act of 1934 and files reports and other information with
the SEC. Such reports and other information filed by the Company may be inspected and copied at the SEC’s Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549, as well as in the SEC’s public reference room in New York, New York.
Please call the SEC at 1-800-SEC-0330 for further information on the operation of the SEC’s public reference room. The SEC
also maintains an Internet site that contains reports, proxy statements and other information about issuers, like us, who file
electronically with the SEC. The address of the SEC’s web site is http://www.sec.gov.
GENERAL
The Company will bear
the entire cost of solicitation, including the preparation, assembly, printing and mailing of this proxy statement, the proxy card
and any additional materials requested by stockholders. The Company’s officers, directors and employees may solicit proxies
by telephone or other means. Approximately $30,000 will be incurred by the Company to effect the Reverse Stock Split which represents
estimated legal costs of $15,000 and estimated printing and mailing costs of $15,000.
Failure of a quorum
to be present at the Special Meeting will necessitate adjournment and will subject the Company to additional expense.
The Company’s
Board of Directors does not intend to present and does not have reason to believe that others will present any other items of business
at the Special Meeting. However, if other matters are properly presented to the Special Meeting for a vote, the proxies will be
voted upon such matters in accordance with the judgment of the persons acting under the proxies.
CARBON ENERGY CORPORATION
NOTICE OF INTERNET AVAILABILITY OF
PROXY MATERIALS
Important Notice
Regarding the Availability of Proxy Materials for the Special Stockholder’s Meeting to Be Held on ____________, 2020.
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1.
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This notice is not a form for voting.
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2.
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This communication presents only an overview of the more complete proxy materials that are available
to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials
before voting.
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3.
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The Notice of the Special Meeting of Stockholders and related Proxy Statement are available
at www.carbonenergycorp.com.
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4.
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If you want to receive a paper or email copy of these documents, you must request one. There
is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before ________________,
2020 to facilitate timely delivery.
|
The Special Meeting
of the Company’s stockholders will be held at 1700 Broadway, Suite 1170, Denver, CO 80290 on ______________, 2020, at ____
a.m. Mountain Time, for the following purposes:
to approve an amendment to the
Company’s Amended and Restated Certificate of Incorporation to reverse split the outstanding shares of the Company’s
common stock on a 4-for-1 basis.
The Board of Directors
recommends that stockholders vote FOR the proposal to reverse split the Company’s common stock.
_____________, 2020
is the record date for the determination of stockholders entitled to notice of and to vote at such Special Meeting. Holders of
the Company’s common stock are entitled to one vote per share. Holders of the Company’s Series B preferred shares are
entitled to 12.5 votes per share.
Stockholders may
access the following documents at www._______________:
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●
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Notice of the Special Meeting of Stockholders;
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●
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Company’s Proxy Statement;
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|
●
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December 31, 2019 10-K report.
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Stockholders
may request a paper copy of the Proxy Materials and Proxy Card by calling __________________, by emailing the Company at ______________________,
or by visiting ________________ and indicating if you want a paper copy of the proxy materials
and proxy card:
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●
|
for this meeting only; or
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●
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for this meeting and all other meetings.
|
If you
have a stock certificate registered in your name, or if you have a proxy from a stockholder of record on ________________, 2020,
you can, if desired, attend the special meeting and vote in person. Stockholders can obtain directions to the Special Stockholders’
Meeting at __________________.
Please visit __________________
to print and fill out the Proxy Card. Complete and sign the Proxy Card and mail the Proxy Card to:
Carbon Energy Corporation
Attn: ______________________
1700 Broadway, Suite 1170
Denver, Co 80290
PRELIMINARY PROXY
CARBON ENERGY CORPORATION
This Proxy is solicited by the Company’s
Board of Directors
The undersigned stockholder of
Carbon Energy Corporation (“the Company”) acknowledges receipt of the Notice of the Special Meeting of Stockholders
to be held on ____________, 2020, at ____ a.m., local time, at 1700 Broadway, Suite 1170, Denver, CO 80290, and hereby appoints
_________________________ with the power of substitution, as Attorney and Proxy to vote all the shares of the undersigned at said
Special Meeting of Stockholders and at all adjournments thereof, hereby ratifying and confirming all that said Attorney and Proxy
may do or cause to be done by virtue hereof. The above named Attorney and Proxy is instructed to vote all of the undersigned’s
shares as follows:
|
(1)
|
to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation
to reverse split the Company’s common stock on a 4-for-1 basis;
|
☐ FOR
☐ AGAINST ☐ ABSTAIN
to transact such other
business as may come before the Special Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL
BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER IF NO DISCRETION IS INDICATED, THIS PROXY WILL BE VOTED IN FAVOR OF
ITEM 1.
|
Dated this ____ day of _____________, 2020.
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(Signature)
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(Print Name)
|
Please sign your name exactly as it appears
on your stock certificate.
If shares are held jointly, each holder
should sign.
Executors, trustees, and other fiduciaries
should so indicate when signing.
Please Sign, Date and Return this Proxy
so that your shares may be voted at the Special Meeting.
Send your proxy by regular mail, email,
or fax to:
Carbon Energy Corporation
Attn: ______________________
1700 Broadway, Suite 1170
Denver, Co 80290
Email: _________________
Fax: ____________
APPENDIX A
CARBON ENERGY CORPORATION
AMENDMENT TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Article 4 is amended
by adding the following:
4.5 Reverse Stock
Split
Every four shares of
this Corporation’s common stock will automatically be converted into one share of this Corporation’s common stock.
Stockholders owning fewer than four shares will only be entitled to a fraction of a share of common stock, will be paid cash in
lieu of such fraction of a share and will no longer be stockholders of the Corporation.
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