UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. __)

 

	Yuma Energy, Inc.
	(Name of Issuer)
	Common Stock, $0.001 par value
	(Title of Class of Securities)
	98872F10 5
	(CUSIP Number)
	Reid. A Godbolt, Esq. Jones & Keller, P.C. 1999 Broadway, Suite 3150 Denver, Colorado 80202
	(303) 573-1600
	(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
	October 26, 2016
	(Date of Event Which Requires Filing of This Statement)

 

 

 

 

 

 

CUSIP No. 98872F10 5

 

1	NAMES OF REPORTING PERSONS:   Sam L. Banks
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a)         [ ] (b)         [ ]
3	SEC USE ONLY:
4	SOURCE OF FUNDS (See Instructions):   OO – merger transaction
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e): ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION:   United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:		7	SOLE VOTING POWER:   2,102,138
		8	SHARED VOTING POWER:   -0-
		9	SOLE DISPOSITIVE POWER:   2,077,018
		10	SHARED DISPOSITIVE POWER:   -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:   2,111,648
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions):   ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):   17.29% (1)
14	TYPE OF REPORTING PERSON (See Instructions):   IN

_________________

 

 

 

 

This statement on Schedule 13D (this “Schedule 13D”) relates to the common stock, $0.001 par value per share (the “Common Stock”), of Yuma Energy, Inc., a Delaware corporation (the “Company”). The principal executive offices of the Company are located at 1177 West Loop South, Suite 1825, Houston, Texas 77027.

 

 

 

 

 

 

 

 

 

The Reporting Person acquired the securities of the Company on October 26, 2016 in connection with the reincorporation of the Company from California to Delaware, whereby Yuma Energy, Inc., a California corporation (“Yuma California”), merged with and into the Company, with the Company surviving the merger and effected a reverse stock split of 1-for-20 (the “Reincorporation Merger”), and subsequently, Yuma Merger Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (the “Merger Subsidiary”), merged with and into Davis Petroleum Acquisition Corp., a Delaware corporation (“Davis”), with Davis surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”) pursuant to that certain Agreement and Plan of Merger and Reorganization dated as of February 10, 2016 and as amended on September 2, 2016 (the “First Amendment”) (as amended, the “Merger Agreement”), by and among the Company, Yuma California, Merger Subsidiary and Davis. The Merger Agreement further resulted in a change of control of the Company. Four of the seven directors on the board of directors of the Company were nominated by Davis.

 

Pursuant to the Reincorporation Merger, each share of common stock, no par value per share (“Yuma California Common Stock”), of Yuma California, was exchanged for one-twentieth of one share of common stock, $0.001 par value per share (the “Common Stock”), of the Company. The offer and sale of the Common Stock issued in the Reincorporation Merger was registered under the Securities Act of 1933, as amended (the “Securities Act”), on the registration statement on Form S-4 (File No. 333-212103), originally filed with the Securities and Exchange Commission (the “SEC”) on June 17, 2016 by the Company.

 

Upon consummation of the Reincorporation Merger, the Reporting Person received a total of 2,077,018 shares of Common Stock in exchange for his shares of Yuma California Common Stock. In addition, the Company assumed the Reporting Person’s outstanding Yuma California restricted stock awards, which were exchanged for restricted stock awards denominated in shares of Common Stock in the aggregate amount of 25,120 restricted shares of Common Stock, subject to vesting as follows: 1,893 shares vest on January 1, 2017, 11,614 shares vest on May 31, 2017, and 11,613 shares vest on May 31, 2018. The Company also assumed the Reporting Person’s outstanding Yuma California stock appreciation right award, which was exchanged for a stock appreciation right award denominated in shares of Common Stock in the aggregate amount of 28,530 stock appreciation rights (“SARs”) with an exercise price of $12.10, subject to vesting as follows: 9,510 SARs vested on May 31, 2016, 9,510 SARs vest on May 31, 2017, and 9,510 SARs vest on May 31, 2018.

 

 

The foregoing description of the Merger Agreement and the First Amendment do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement and the First Amendment, which are attached hereto as Exhibit 1 and Exhibit 2, respectively, and are incorporated herein by reference.

 

 

The Reporting Person acquired the Common Stock reported herein for investment purposes and as part of his compensation for serving as President and Chief Executive Officer of the Company. The Reporting Person intends to review his investment in the Company from time to time and, depending on market conditions and other factors that the Reporting Person may deem material in making his investment decision, the Reporting Person may make purchases or sales of Common Stock in open market or private transactions, sell all or any portion of the Common Stock the Reporting Person has or subsequently acquires in open market or private transactions, or take other steps to increase or decrease his investment in the Company. The Reporting Person may in the future acquire, restricted stock awards, stock appreciation rights, stock options, restricted stock units or other rights to acquire securities of the Company in the ordinary course of business in connection with his service as an executive officer of the Company.

 

The Reporting Person is the President and Chief Executive Officer of the Company and serves as a member of the board of directors of the Company, and in such capacities, the Reporting Person will take an active role in working with the Company’s other management members on operational, financial and strategic initiatives and may be involved from time to time in the consideration of matters specified in the next sentence on behalf of the Company. Except as set forth herein, as of the date hereof, there are no plans or proposals that the Reporting Person has that relate to or would result in (a) the acquisition of securities of the Company or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company’s business or corporate structure; (g) changes in the Company’s certificate of incorporation, bylaws, or other instruments corresponding thereto or other actions that may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration under the Exchange Act of 1934, as amended (the “Exchange Act”); or (j) any action similar to any of the matters enumerated above.

 

 

	(a) and (b)	The Reporting Person is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 2,111,648 shares of Common Stock (which includes 25,120 restricted shares of Common Stock subject to restricted stock awards and 9,510 SARs which are vested and exercisable), which represents approximately 17.29% of the outstanding shares of Common Stock as reported in the Company’s Current Report on Form 8-K filed on November 1, 2016 with the SEC. Of the 2,111,648 shares of Common Stock, (i) 25,120 shares are subject to restricted stock awards assumed by the Company upon the consummation of the Reincorporation Merger and vest as follows: 1,893 shares vest on January 1, 2017, 11,614 shares vest on May 31, 2017, and 11,613 shares vest on May 31, 2018; and (ii) and 9,510 SARs which are vested and exercisable. The Reporting Person has sole power to vote or direct the vote of 2,102,138 shares of Common Stock. The Reporting Person has sole power to dispose or to direct the disposition of 2,077,018 shares of Common Stock. The Reporting Person has sole voting, but not dispositive, power with respect to 25,120 restricted shares of Common Stock that will vest as set forth above.
	(c)	Except as set forth in Item 3 above, the Reporting Person has not effected any transaction in the shares of Common Stock during the past 60 days.
	(d)	Not applicable.
	(e)	Not applicable.

 

 

 

As required under the Merger Agreement, on October 26, 2016, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Reporting Person and certain other stockholders of the Company, pursuant to which the Company agreed to register, at its cost, with the SEC the resale of the Common Stock issued to such holders of Common Stock and the Common Stock issued upon conversion of the Series D Convertible Preferred Stock, $0.001 par value per share, of the Company (the “Series D Preferred Stock”). The Company has agreed to file a shelf registration statement (the “Shelf Registration Statement”) with the SEC within 180 days after the closing of the Merger. The parties to the Registration Rights Agreement may request registration no more than three times during any twelve (12) consecutive months of shares having an estimated offering price of greater than $5.0 million. No request may be made after the fourth anniversary of the effectiveness of the Shelf Registration Statement. In addition, if the Company files a registration statement within four years of the effectiveness of the Shelf Registration Statement, it must offer to the parties to the Registration Rights Agreement the opportunity to include the resale of their shares in the registration statement, subject to customary qualifications and limitations. The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 3 and is incorporated by reference herein.

 

As required under the Merger Agreement, on October 26, 2016, the Company entered into a Lock-up Agreement (the “Lock-up Agreement”) with the Reporting Person and the other stockholders party to the Registration Rights Agreement (collectively, the “Lock-up Persons”), pursuant to which the Lock-up Persons are restricted for a period of 180 days (the “Lock-up Period”) after the closing of the Merger from offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant to purchase, lending or otherwise transferring or disposing of any shares of Common Stock, Series D Preferred Stock or any other class of the Company’s capital stock (collectively, “Capital Stock”) or any other securities convertible into or exercisable or exchangeable for any Capital Stock, whether now owned or hereafter acquired by the Lock-up Person during the Lock-Up Period or with respect to which the undersigned has or hereafter acquires the power of disposition during the Lock-Up Period, or enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequence of ownership of any Capital Stock or any securities convertible into or exercisable or exchangeable for any Capital Stock. The foregoing restrictions do not apply to certain other transfers customarily excepted. The foregoing description of the Lock-up Agreement does not purport to be complete and is qualified in its entirety by reference to the Lock-up Agreement, a copy of which is attached hereto as Exhibit 4 and is incorporated by reference herein.

 

Other than as described in this Schedule 13D and in the agreements and documents attached as exhibits hereto or incorporated herein by reference, to the knowledge of the Reporting Person, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Person and any other person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, the existence of which would give another person voting or investment power over the securities of the Company.

 

 

Exhibit No.		Description of Exhibit
1		Agreement and Plan of Merger and Reorganization dated as of February 10, 2016, by and among Yuma Energy, Inc., Yuma Delaware Merger Subsidiary, Inc., Yuma Merger Subsidiary, Inc. and Davis Petroleum Acquisition Corp. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K/A filed by Yuma Energy, Inc. (SEC File No.: 001-32989) with the SEC on February 16, 2016).
2		First Amendment to the Agreement and Plan of Merger and Reorganization dated as of September 2, 2016, by and among Yuma Energy, Inc., Yuma Delaware Merger Subsidiary, Inc., Yuma Merger Subsidiary, Inc. and Davis Petroleum Acquisition Corp. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Yuma Energy, Inc. (SEC File No.: 001-32989) with the SEC on September 6, 2016).
3		Registration Rights Agreement dated October 26, 2016 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Registrant with the SEC on November 1, 2016)
4		Lock-up Agreement dated October 26, 2016 between Yuma Energy, Inc. and Sam L. Banks.

 

 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

 

	SAM L. BANKS
Date: November 7, 2016	By:	/s/ Sam L. Banks

 

 

 

 

 

 

 

 Exhibit 4

 

LOCK-UP AGREEMENT

 

Agreement and Plan of Merger and Reorganization

dated as of February 10, 2016

by and among

Yuma Energy, Inc.,

Yuma Delaware Merger Subsidiary, Inc.,

Yuma Merger Subsidiary, Inc.,

and

Davis Petroleum Acquisition Corp.

 

Dated as of October 26, 2016

 

Yuma Energy, Inc.

1177 West Loop South, Suite 1825

Houston, Texas 77027

 

Yuma Delaware Merger Subsidiary, Inc.

1177 West Loop South, Suite 1825

Houston, Texas 77027

 

Ladies and Gentlemen:

This agreement is being delivered to Yuma Energy, Inc. (“Yuma”) and Yuma Delaware Merger Subsidiary, Inc. (“Yuma Delaware”) in connection with the Agreement and Plan of Merger and Reorganization, dated as of February 10, 2016, by and among Yuma, Yuma Delaware, Yuma Merger Subsidiary, Inc., and Davis Petroleum Acquisition Corp. (“Davis”) (the “Merger Agreement”). Capitalized terms not defined herein shall have the meanings set forth in the Merger Agreement.

In order to induce you to enter into the Merger Agreement, and in light of the benefits that the Merger Agreement will confer upon the undersigned in its capacity as a securityholder of Davis, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with Yuma and Yuma Delaware that, during the period beginning on and including the date of the Closing through and including the date that is the 180th day after the date of the Closing (the “Lock-Up Period”), the undersigned will not, without the prior written consent of Yuma Delaware, directly or indirectly:

(i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of Yuma Delaware’s Common Stock, its Series D Convertible Preferred Stock or any other class of its capital stock (collectively, “Capital Stock”) or any other securities convertible into or exercisable or exchangeable for any Capital Stock, whether now owned or hereafter acquired by the undersigned during the Lock-Up Period or with respect to which the undersigned has or hereafter acquires the power of disposition during the Lock-Up Period, or

(ii) enter into any swap or other agreement, arrangement or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequence of ownership of any Capital Stock or any securities convertible into or exercisable or exchangeable for any Capital Stock, whether any transaction described in clause (i) or (ii) above is to be settled by delivery of any Capital Stock, other securities, in cash or otherwise.

 

Notwithstanding the provisions set forth in the immediately preceding paragraph, the undersigned may, without the prior written consent of Yuma or Yuma Delaware, transfer any Capital Stock or any securities convertible into or exchangeable or exercisable for any Capital Stock:

(1) if the undersigned is a natural person, as a bona fide gift or gifts, or by will or intestacy, to any member of the immediate family (as defined below) of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned or members of the undersigned’s immediate family or as a bona fide gift or gifts to a charity or educational institution,

(2) if the undersigned is a partnership or a limited liability company, to a partner or member, as the case may be, of such partnership or limited liability company if, in any such case, such transfer is not for value,

(3) if the undersigned is a corporation, partnership, limited liability company or other business entity, any transfer made by the undersigned to another corporation, partnership, limited liability company or other business entity so long as the transferee is an affiliate (as defined below) of the undersigned and such transfer is not for value,

(4) if the undersigned is a corporation, partnership, limited liability company or other business entity, any transfer made by the undersigned in connection with the sale or other bona fide transfer in a single transaction of all or substantially all of the undersigned’s capital stock, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially all of the undersigned’s assets, in any such case not undertaken for the purpose of avoiding the restrictions imposed by this agreement, and

(5) the conversion, exchange or exercise of any securities convertible into or exercisable or exchangeable for Yuma Delaware’s Common Stock, including Yuma Delaware’s Series D Preferred Stock, and any shares of Common Stock or received upon such conversion, exchange or exercise shall continue to be subject to the terms of this agreement,

provided, however, that in the case of any transfer described in clause (1), (2), (3) or (4) above, it shall be a condition to the transfer that (A) the transferee executes and delivers to Yuma Delaware not later than one business day prior to such transfer, a written agreement, in substantially the form of this agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate family of the transferee) and otherwise satisfactory in form and substance to Yuma Delaware, and (B) if the undersigned is required to file a report under Section 16(a) of the Securities Exchange Act of 1934, as amended, reporting a reduction in beneficial ownership of shares of any Capital Stock or any securities convertible into or exercisable or exchangeable for any Capital Stock by the undersigned during the Lock-Up Period (as the same may be extended as described above), the undersigned shall include a statement in such report to the effect that such transfer or distribution is not a transfer for value and (w) in the case of any transfer pursuant to clause (1), that such transfer is being made as a gift or by will or intestacy, as the case may be, (x) in the case of any transfer pursuant to clause (2), that such transfer is being made to the partners or members, as the case may be, of the applicable partnership or limited liability company, as the case may be, (y) in the case of any transfer pursuant to clause (3), that such transfer is being made to another corporation, partnership, limited liability company or other business entity that is an affiliate of the undersigned, and (z) in the case of any transfer pursuant to clause (4), that such transfer is being made in connection with the sale or other bona fide transfer in a single transaction of all or substantially all of the undersigned’s capital stock, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially all of the undersigned’s assets. For purposes of this paragraph, “immediate family” shall mean a spouse, father, mother, child, grandchild or other lineal descendant (including by adoption), brother or sister of the undersigned, and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”). Any Common Stock of Yuma Delaware acquired by the undersigned in the open market after the date hereof will not be subject to the restrictions set forth in this agreement.

 

Furthermore, nothing in this agreement shall prohibit the undersigned from receiving shares of Capital Stock, including Yuma Delaware’s Series D Preferred Stock, by reason of a stock dividend, reclassification, recapitalization, split, combination, exchange of shares or similar event or transaction, and any such shares received will also be subject to the terms of this agreement.

The undersigned further agrees that (i) it will not, during the Lock-Up Period make any demand for or exercise any right with respect to the registration under the 1933 Act, of any shares of any Capital Stock or any securities convertible into or exercisable or exchangeable for any Capital Stock, and (ii) Yuma Delaware may, with respect to any Capital Stock or any securities convertible into or exercisable or exchangeable for any Capital Stock owned or held (of record or beneficially) by the undersigned that is subject to the restrictions set forth in this agreement, cause the transfer agent or other registrar to enter stop transfer instructions and implement stop transfer procedures with respect to such securities during the Lock-Up Period.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this agreement and that this agreement has been duly authorized (if applicable), executed and delivered by the undersigned and is a valid and binding agreement of the undersigned. This agreement and all authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

[Signature Page Immediately Follows]

 

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this agreement as of the date first set forth above.

Yours very truly,

 

Print Name: Sam L. Banks