U.S. Energy Corp. Enters $25M Equity Deal

The company gains discretion to sell shares over two years while maintaining control over timing and volume.

October 10, 2025

Flexible Financing Strategy Announced

U.S. Energy Corp. has secured a flexible financing arrangement allowing it to raise up to $25 million through a structured equity purchase agreement with Roth Principal Investments. The agreement, announced on October 9, 2025, grants U.S. Energy the right—but not the obligation—to sell common stock over a 24-month term, depending on market conditions and corporate funding needs.

Under the terms of the Common Stock Purchase Agreement and a concurrent Registration Rights Agreement, U.S. Energy can initiate stock sales at its own discretion, directing Roth to buy shares either at the opening of trading or during the trading day. The pricing for these transactions will be based on volume-weighted average pricing (VWAP), with a fixed discount applied. This allows the company to time transactions strategically, without being locked into a fixed issuance schedule.

The company retains control over both the frequency and volume of stock sales, with sales conditioned on share price thresholds and the successful delivery of previously transacted shares. These safeguards ensure that Roth only purchases shares under defined market conditions and when certain procedural requirements have been met.

Key Deal Limitations and Protections

The agreement contains several important limits. U.S. Energy cannot sell more than 7.12 million shares—representing 19.99% of its outstanding shares at the time the agreement was signed—unless it receives shareholder approval or meets certain average pricing conditions. Additionally, Roth cannot hold more than 4.99% of the company's outstanding shares at any time, ensuring that control of the company is not concentrated through this transaction.

To initiate the agreement, U.S. Energy issued 223,141 commitment shares valued at $1.21 per share and paid a $25,000 structuring fee. The company also committed to a $180,000 cash fee and may owe up to $270,000 in a make-whole payment if Roth’s resale proceeds from the commitment shares fall below that threshold. However, if Roth resells all commitment shares for $270,000 or more, the make-whole clause will not be triggered.

Trading Restrictions and Underwriting Support

Roth has agreed not to engage in short selling or hedging activities involving U.S. Energy’s stock during the agreement’s term. In return, the company has committed not to pursue similar variable-rate equity transactions with other investors for the duration of the agreement. These provisions aim to stabilize trading and prevent dilution through conflicting equity deals.

The company also engaged D. Boral Capital, a registered broker-dealer, to serve as the qualified independent underwriter for the upcoming resale registration. D. Boral Capital will receive a flat fee of $50,000 for its role in overseeing regulatory compliance under FINRA’s rules.

Termination and Proceeds Allocation

The purchase agreement has built-in termination clauses that allow for cancellation under specific conditions, such as reaching the full $25 million investment threshold, delisting of the company’s stock, or bankruptcy proceedings. U.S. Energy may also terminate the agreement at any time after the transaction commences, provided it gives ten trading days’ written notice.

Net proceeds from any sales under this agreement will be directed toward general working capital and corporate purposes. However, the amount raised will ultimately depend on the company’s decisions about when and how much stock to sell, influenced by prevailing market dynamics and strategic priorities.

This arrangement offers U.S. Energy a non-dilutive, on-demand capital infusion model, enabling it to access funding incrementally and under favorable market conditions. By retaining the ability to control timing and pricing, the company enhances its financial agility without committing to a rigid capital raise.