Yuma Energy, Inc. (Form: 8-K, Received: 09/06/2016 17:23:51)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: September 2, 2016

(Date of earliest event reported)

Yuma Energy, Inc.

(Exact name of registrant as specified in its charter)


CALIFORNIA (State or other jurisdiction of incorporation)		001-32989 (Commission File Number)		94-0787340 (IRS Employer Identification No.)

1177 West Loop South, Suite 1825

Houston, Texas 77027

(Address of principal executive offices) (Zip Code)

(713) 968-7000

(Registrant’s telephone number, including area code)


	(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	[X]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	⬜	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	⬜	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	⬜	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On September 2, 2016, Yuma Energy, Inc. (the “Company”), Yuma Delaware Merger Subsidiary, Inc., a wholly-owned subsidiary of the Company (“Yuma Delaware”), Yuma Merger Subsidiary, Inc., a wholly-owned subsidiary of Yuma Delaware (“Merger Subsidiary”), and Davis Petroleum Acquisition Corp. (“Davis”), entered into an amendment (the “Amendment”) to the Agreement and Plan of Merger and Reorganization dated February 10, 2016 (the “Merger Agreement”), among the Company, Yuma Delaware, Merger Subsidiary and Davis.

The Amendment extends the outside date of the Merger Agreement from September 30, 2016 to October 31, 2016. The Amendment also provides the Company’s board of directors with the ability to adjust the ratio of the reverse stock split from 10-for-1 up to 20-for-1. Additionally, the Amendment provides the Davis board of directors with the ability to adjust its employee bonuses; however, it does not increase the aggregate bonus amount.

The preceding is a summary of the material provisions of the Amendment and is qualified in its entirety by reference to the complete text of the Amendment filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference herein.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as “expects,” “believes,” “intends,” “anticipates,” “plans,” “estimates,” “potential,” “possible,” or “probable” or statements that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. The forward-looking statements include statements about future operations, estimates of reserve and production volumes, the anticipated timing for closing the proposed merger and the ability of the Company to enter into an amendment to its credit agreement. Forward-looking statements are based on current expectations and assumptions and analyses made by the Company and Davis in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform with expectations is subject to a number of risks and uncertainties, including but not limited to: the possibility that the companies may be unable to obtain stockholder approval or satisfy the other conditions to closing; the possibility that the combined company may be unable to obtain an acceptable reserve-based credit facility; that problems may arise in the integration of the businesses of the two companies; that the acquisition may involve unexpected costs; the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas); risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; revisions to reserve estimates as a result of changes in commodity prices; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather; further declines in oil and gas prices; inability of management to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change. The Company’s annual report on Form 10-K/A for the year ended December 31, 2015, quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other SEC filings discuss some of the important risk factors identified that may affect its business, results of operations, and financial condition. The Company and Davis undertake no obligation to revise or update publicly any forward-looking statements, except as required by law.

Additional Information about the Transaction

In connection with the proposed transaction, Yuma Delaware filed with the SEC a registration statement on Form S-4 that includes a proxy statement of the Company that also constitutes a prospectus of Yuma Delaware relating to Yuma Delaware common stock to be exchanged for Company common stock and preferred stock in the reincorporation, Yuma Delaware common stock to be issued upon conversion of the shares of Davis common stock in the merger, Yuma Delaware preferred stock to be issued upon conversion of the Davis preferred stock in the merger, and Yuma Delaware common stock to be issued upon conversion of the Yuma Delaware preferred stock. The proxy statement/prospectus includes important information about both the Company and Davis. The Company and Yuma Delaware also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, DAVIS AND THE PROPOSED TRANSACTION. Investors and security holders may obtain these documents when available free of charge at the SEC’s website at www.sec.gov. In addition, the documents filed with the SEC by the Company and Yuma Delaware can be obtained free of charge from the Company’s website at www.yumaenergyinc.com.

Participants in Solicitation

The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in respect of the proposed transaction. Information regarding the Company’s directors and executive officers is available in its annual report on Form 10-K/A for the year ended December 31, 2015, which was filed with the SEC on May 23, 2016. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

This report shall not constitute an offer to sell or the solicitation of any offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits .

The following exhibit is filed with this Current Report on Form 8-K:

	Exhibit No.		Description

	2.1		First Amendment to the Agreement and Plan of Merger and Reorganization dated September 2, 2016, among Yuma Energy, Inc., Yuma Delaware Merger Subsidiary, Inc., Yuma Merger Subsidiary, Inc. and Davis Petroleum Acquisition Corp.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	YUMA ENERGY, INC.

	By:	/s/ Sam L. Banks
	Name:	Sam L. Banks
Date: September 6, 2016	Title:	President and Chief Executive Officer

EXHIBIT INDEX

	Exhibit No.		Description

	2.1		First Amendment to the Agreement and Plan of Merger and Reorganization dated September 2, 2016, among Yuma Energy, Inc., Yuma Delaware Merger Subsidiary, Inc., Yuma Merger Subsidiary, Inc. and Davis Petroleum Acquisition Corp.

Exhibit 2.1

FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

This First Amendment to the Agreement and Plan of Merger and Reorganization (this “ Amendment ”) is dated as of September 2, 2016, among Davis Petroleum Acquisition Corp., a Delaware corporation (the “ Company ”), Yuma Energy, Inc., a California corporation (“ Yuma ”), Yuma Delaware Merger Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Yuma (“ Delaware Merger Subsidiary ”), and Yuma Merger Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Delaware Merger Subsidiary (“ Merger Subsidiary ”), and amends that certain Agreement and Plan of Merger made as of February 10, 2016, among Davis, Yuma, Delaware Merger Subsidiary and Merger Subsidiary (the “ Merger Agreement ”). Capitalized terms used and not otherwise defined in this Amendment shall have the respective meanings set forth in the Merger Agreement (as defined below). Davis, Yuma, Delaware Merger Subsidiary and Merger Subsidiary are sometimes referred to herein individually as a “ Party ” and, collectively, as the “ Parties .”

WHEREAS, the Parties desire to modify the Merger Agreement on the terms herein; and

WHEREAS, the Parties desire to amend the Merger Agreement to amend the Outside Date to October 31, 2016, from September 30, 2016.

NOW, THEREFORE, in consideration of the premises and mutual promises, representations, warranties, covenants, conditions and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound by the terms hereof, agree as follows:

ARTICLE I

AMENDMENTS

Section 1.1 Amendments .

A. Section 6.21(d) of the Merger Agreement is hereby amended and restated to read in its entirety as follows:

(d) Prior to the Merger Effective Time, (i) the Company shall pay or award performance bonuses, whether in the form of cash, Company Common Stock or Company Restricted Shares, to officers and employees of the DPAC Companies with respect to their 2015 fiscal year in accordance with the Company’s compensation policies, provided that no such bonus shall exceed 100% of the target bonus for any such officer or employee and the aggregate amount of such performance bonuses shall not exceed $1,353,993; and (ii) the Company shall pay or award performance bonuses, whether in the form of cash, Company Common Stock or Company Restricted Shares, to officers and employees of the DPAC Companies with respect to the period from January 1, 2016 through the Merger Effective Time in accordance the Company’s compensation policies; provided that the 2016 target bonus shall be the same as the 2015 target bonus (or the target bonus of the predecessor of such officer or employee with respect to those officers and employees serving in place of any severed officer or employee) and the amount paid with respect to each such bonus shall be pro-rated for such period.

B. Section 9.01 of the Merger Agreement is hereby amended and restated to read in its entirety as follows:

SECTION 9.01 Termination . This Agreement may be terminated, and the Reincorporation Merger and the Merger may be abandoned, at any time prior to the Merger Effective Time (whether before or after the Yuma Shareholder Approval or any approval of this Agreement by the stockholders of the Company):

(a) by mutual written consent of the Company and Yuma duly authorized by each of their respective board of directors; or

(b) by either the Company or Yuma, if the Reincorporation Merger and the Merger have not been consummated by October 31, 2016 (the “ Outside Date ”); provided, however, that the right to terminate this Agreement under this Section 9.01(b) shall not be available to (i) Yuma, if the failure of any Yuma Entity to fulfill any of its material obligations under this Agreement caused the failure of the Reincorporation Closing or the Closing to occur on or before such date, or (ii) the Company, if the failure of the Company to fulfill any of its material obligations under this Agreement caused the failure of the Reincorporation Closing or the Closing to occur on or before such date, or (iii) Yuma or the Company, if the failure of the Reincorporation Closing or the Closing to occur on or before such date is due solely to the failure of the condition set forth in Section 8.01(d) notwithstanding the performance by Yuma of any obligations under Section 6.09; or

(c) by the Company, in the event of a Yuma Material Adverse Effect, or by Yuma, in the event of a Company Material Adverse Effect, or by either the Company or Yuma, whichever is the non-breaching party, if (i) there has been a breach by the other of any representation or warranty contained in this Agreement which would reasonably be expected to have a Company Material Adverse Effect or a Yuma Material Adverse Effect, as the case may be, and which breach is not curable, or if curable, the breaching party shall not be using on a continuous basis its reasonable best efforts to cure in all material respects such breach after written notice of such breach by the terminating party or such breach has not been cured within thirty (30) days after written notice of such breach by the terminating party, or (ii) there has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of the other party, which would reasonably be expected to have a Yuma Material Adverse Effect or a Company Material Adverse Effect, as the case may be, and which breach is not curable, or if curable, the breaching party shall not be using on a continuous basis its reasonable best efforts to cure such breach after written notice of such breach by the terminating party, or such breach has not been cured within thirty (30) days after written notice of such breach by the terminating party; or

(d) by either the Company or Yuma after ten (10) days following the entry of any final and non-appealable judgment, injunction, order or decree by a court or Governmental Entity of competent jurisdiction restraining or prohibiting the consummation of the Merger; or

(e) by the Company if prior to receipt of the Company Stockholders’ Approval, the Company receives a Superior Offer, resolves to accept such Superior Offer, complies with its Company Termination Fee payment obligations under Section 9.02 hereof and gives Yuma at least four (4) Business Days’ prior written notice of its intention to terminate pursuant to this provision; provided, however, that such termination shall not be effective until such time as the payment required by Section 9.02 shall have been received by Yuma; or

(f) by Yuma or the Company, if the Yuma Board shall have failed to recommend, or shall have withdrawn, modified or amended in a manner adverse to the Company in any material respect the Yuma Board Recommendation, or shall have resolved to do any of the foregoing, or shall have recommended another Acquisition Proposal or if the Yuma Board shall have resolved to accept a Superior Offer; or

(g) by Yuma if prior to receipt of the Yuma Shareholders’ Approval, Yuma receives a Superior Offer, resolves to accept such Superior Offer, complies with its Yuma Termination Fee payment obligations under Section 9.02 hereof and gives the Company at least four (4) Business Days’ prior written notice of its intention to terminate pursuant to this provision; provided, however, that such termination shall not be effective until such time as the payment required by Section 9.02 shall have been received by the Company; or

(h) by the Company or Yuma, if the Company Board shall have failed to recommend, or shall have withdrawn, modified or amended in a manner adverse to Yuma in any material respect the Company Board Recommendation, or shall have resolved to do any of the foregoing, or shall have recommended another Acquisition Proposal or if the Company Board shall have resolved to accept a Superior Offer; or

(i) (i) by Yuma, if the stockholders of the Company fail to approve the Merger in accordance with Section 6.07, or (ii) by the Company, if the shareholders of Yuma fail to approve the Yuma Shareholder Approval Matters at the Yuma Shareholders’ Meeting (including any adjournment or postponement thereof).

C. A new Section 1.11 is hereby added to the Merger Agreement as follows:

SECTION 1.11 Adjustments to Conversion of Capital Stock and Treatment of Outstanding Yuma Equity Awards .

(a) Yuma Common Stock and Yuma Series A Preferred Stock . Notwithstanding Section 1.08 of this Agreement, at any time before the Reincorporation Merger the Yuma Board may (i) decrease the conversion ratio for the conversion of shares of Yuma Common Stock, as set forth in Section 1.08(a) of this Agreement, to an amount not less than one-twentieth (0.05) of one share of Yuma Delaware Common Stock, and (ii) concurrently decrease the conversion ratio for the conversion of shares of Yuma Series A Preferred Stock, as set forth in Section 1.08(b) of this Agreement, to an amount not less than one and three-quarters (1.75) shares of Yuma Delaware Common Stock; provided, however that the lowering of each of the conversion ratios set forth in Section 1.08 as provided in this Section 1.11(a) shall be directly proportional to one another; for example, by way of illustration, if the conversion ratio of the Yuma Common Stock is decreased by action of the Yuma Board by a factor of two (i.e., by dividing by two) to one-twentieth (0.05) of one share of Yuma Delaware Common Stock then the conversion ratio of the Yuma Series A Preferred Stock shall be decreased by action of the Yuma Board by a factor of two (i.e., by dividing by two) to one and three-quarters (1.75) shares of Yuma Delaware Common Stock.

(b) Yuma Options, Yuma Restricted Shares, Yuma RSUs and Yuma SARs . In the event that the Yuma Board elects to decrease the conversion ratios set forth in Section 1.08(a) to an amount not less than one-twentieth (0.05) of one share of Yuma Delaware Common Stock, (such decreased amount to be the “ Applicable Ratio ”), then each occurrence of “one-tenth (0.10)” in Section 1.09 of the Agreement shall be deemed substituted and replaced by an amount equal to the Applicable Ratio as so determined by the Yuma Board.

Section 1.2 Miscellaneous .

A. No Further Amendments . Except as expressly set forth in this Amendment, the Merger Agreement is hereby ratified and confirmed in accordance with its terms.

B. Governing Law . This Amendment will be governed by and construed in accordance with the laws of the State of Delaware.

C. Counterparts . This Amendment may be executed in counterparts, each of which shall be deemed an original instrument, but all such counterparts together shall constitute but one agreement. Any Party’s delivery of an executed counterpart signature page by facsimile or email is as effective as executing and delivering this Amendment in the presence of the other Party. No Party shall be bound until such time as all of the Parties have executed counterparts of this Amendment.

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first above written.

DAVIS PETROLEUM ACQUISITION CORP.

By: /s/ Gregory Schneider

Name: Gregory Schneider

Title: President

YUMA ENERGY, INC.

By: /s/ Sam L. Banks

Name: Sam L. Banks

Title: Chairman, President and Chief Executive Officer

YUMA DELAWARE MERGER SUBSIDIARY, INC.

By: /s/ Sam L. Banks

Name: Sam L. Banks

Title: Chairman, President and Chief Executive Officer

YUMA MERGER SUBSIDIARY, INC.

By: /s/ Sam L. Banks

Name: Sam L. Banks

Title: Chairman, President and Chief Executive Officer