Form 8-K - Current report

 

 

 

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 (Date of earliest event reported): November 12, 2024 (November 8, 2024)

 

HOUSTON AMERICAN ENERGY CORP.

 

(Exact name of registrant as specified in its charter)

 

Delaware		1-32955		76-0675953
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(IRS Employer Identification No.)

 

801 Travis Street, Suite 1425

Houston, Texas 77002

 

(Address of principal executive offices, including zip code)

 

713-222-6966

 

(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 obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		HUSA		NYSE American

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

Private Placement

 

On October 26, 2024, Houston American Energy Corp. (the “Company”) entered into a letter agreement (the “Engagement Agreement”) with Univest Securities, LLC (“Univest”), pursuant to which Univest shall serve as the exclusive placement agent or exclusive lead underwriter in connection with the Company’s proposed private placement offering or public registered offering of shares of its common stock for a maximum amount of $2.5 million. The terms of the offering would be mutually agreed upon by the Company and the purchaser(s) to be documented by a purchase agreement.

 

 

The Company made certain customary representations, warranties and covenants concerning the Company and the offering. Pursuant to the terms of the Engagement Agreement, the Company also would provide Univest with customary indemnification rights. The Company would pay Univest a cash fee equal to 7% of the aggregate gross proceeds raised in the offering, payable at closing of the offering. In addition, Univest would be entitled to compensation for certain financing for the 12-month period after closing of the offering and would have right to appoint a board observer to the Company for one year.

 

On November 8, 2024, the Company entered into a subscription agreement (the “Subscription Agreement”) with an accredited investor (the “Purchaser”) for the sale and issuance (the “Offering”) of 2,180,180 shares of its common stock, par value $0.001 per share (the “Shares”) at a purchase price of $1.14669431 per share. The aggregate gross proceeds to the Company from the Offering were approximately $2.5 million, before deducting placement agent fees and other offering expenses. Univest acted as the exclusive placement agent for the Offering.

 

The Company made certain customary representations, warranties and covenants concerning the Company and the Offering in the Subscription Agreement. In addition, the Purchaser made certain customary representations, warranties and covenants concerning its accredited investor status and agreed to indemnify the Company, the placement agent, and other indemnitees for certain liabilities.

 

Agreement with Departing CEO

 

On November 11, 2024 (the “Effective Date”), the Company entered into an agreement with John Terwilliger (the “Departing CEO Agreement”), pursuant to which the Company paid Mr. Terwilliger a one-time payment of $800,000 and in exchange, Mr. Terwilliger agreed that his change in control agreement with the Company was terminated on Effective Date and he would forgo any claim he was entitled to under such change in control agreement. In addition, pursuant to the Departing CEO Agreement, Mr. Terwilliger stepped down as President and Chief Executive Officer (“CEO”) of the Company as of the Effective Date but would continue as an advisor to the new CEO through December 31, 2024 at his current salary and would retire effective on January 1, 2025. Mr. Terwilliger continues to serve as a director of the board of directors (the “Board”) of the Company.

 

 

The foregoing descriptions of the Engagement Agreement, the Subscription Agreement and the Departing CEO Agreement are not complete and are qualified in their entirety by the full text of such documents, copies of which are filed as exhibits to this report and incorporated herein by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth under Item 1.01 of this Current Report is incorporated herein by reference.

 

The issuance of the shares pursuant to the Subscription Agreement was not registered under the Securities Act in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D promulgated thereunder, or under any state securities laws. The Company relied on this exemption from registration in entering into the Subscription Agreement and in issuing such securities based in part on representations made by the Purchaser. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(b), (c), (d), (e)

 

Departure of CEO

 

The information set forth under Item 1.01 of this Current Report is incorporated herein by reference.

 

Appointment of New CEO

 

On the Effective Date, the Company appointed Peter F. Longo as President and CEO of the Company. Mr. Longo also joined the Board as a director on the Effective Date. Mr. Longo, age 65, has been serving, since 2018, as the Chairman of Cyient, Inc. the U.S. subsidiary of Cyient, Ltd., a leading management services provider in engineering, manufacturing, geospatial, network, and operations management services to global industry leaders in all aspects of the energy sector. Prior to Cyient, from 2016 to 2018, Mr. Longo served as SVP of Operations for United Technologies Corp. (UTC) from prior to its merger with Raytheon. Since 1988, Mr. Longo had served as CFO, and CIO at a number of UTC’s subsidiaries. Neither Cyient nor UTC is affiliated with the Company. Mr. Longo has a bachelor in accountancy degree from Bentley University and is a Certified Public Accountant (CPA) since 1981.

 

In connection with his appointment, the Compensation Committee has approved the following compensation for Mr. Longo: (1) a base salary of $15,000 a month, (2) the monthly-issuance of options to acquire a number of shares of the Company’s common stock equal to $15,000 divided by the then trading price per share of the Company’s common stock.

 

There are no family relationship between Mr. Longo and any of the Company’s other directors or executive officers. There are no related party transactions with Mr. Longo required to be disclosed as required by Item 404(a) of Regulations S-K.

 

Changes to the Board of Directors

 

The Board has received the resignation of James A. Schoonover as a director from the Board which took effect on the Effective Date. Mr. Schoonover’s departure from the Board was not due to any disagreement between the director and the company.

 

Also on the Effective Date, Robert J. Bailey has joined the Board. Mr. Bailey, age 60, has been serving as the Corporate Vice President – Controller from 2016 to 2020 with Raytheon Technologies Corporation (formerly United Technologies Corp.), a leading aerospace and defense product provider for the U.S. government and commercial markets. In his role, he led Raytheon’s SEC reporting, compliance, and accounting matters. Raytheon is not affiliated with the Company. Mr. Bailey holds a bachelor of Science in accounting from University of Massachusetts and is a CPA since 1986.

 

 

There are no arrangements nor understandings with Mr. Bailey pursuant to which he was selected as a director of the Company, and there are no family relationship between Mr. Bailey and any of the Company’s other directors or executive officers. There are no related party transactions with Mr. Bailey required to be disclosed as required by Item 404(a) of Regulations S-K. Mr. Bailey will be entitled to receive the standard compensation provided to directors of the Company.

 

With these changes, the Board will have five members. Each of Mr. Longo and Mr. Bailey will serve until the Company’s next annual meeting of stockholders and will be eligible to stand for re-election at that time, subject in each case until the director’s earlier resignation or removal.

 

Item 7.01 Regulation FD Disclosure.

 

On November 11, 2024, the Company issued a press release announcing the closing of the Offering and the management and board changes as noted above. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information furnished pursuant to Item 7.01 of this Current Report on Form 8-K and in Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference into any filing of the Company under the Securities Act, as amended or the Exchange Act, except as otherwise expressly stated in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
10.1		Engagement Letter, dated October 26, 2024, by and between Houston American Energy Corp. and Univest Securities, LLC.
10.2 *+		Subscription Agreement, dated November 8, 2024, by and between Houston American Energy Corp. and the undersigned purchaser on the signature page thereto.
10.3		Agreement, dated November 11, 2024, by and between Houston American Energy Corp. and John Terwilliger.
99.1		Press release dated November 11, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

 

+ Certain portions of this document that constitute confidential information have been redacted pursuant to Item 601(b)(10) of Regulation S-K.

 

 

SIGNATURES

 

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.

 

	HOUSTON AMERICAN ENERGY CORP.
Dated: November 12, 2024
	By:	/s/ John Terwilliger
	Name:	John Terwilliger
	Title:	Chief Executive Officer

 

 

Exhibit 10.1

 

 

10/26/2024

 

Mr. John Terwilliger

CEO

Houston American Energy Corp.

 

Mr. Terwilliger,

 

This letter (the “Agreement”) constitutes the agreement between Univest Securities, LLC (“Univest” or the “Bank”) and Houston American Energy Corp. (the “Company”), pursuant to which the Bank shall serve as the exclusive placement agent or exclusive lead underwriter for the Company, in connection with its proposed offering (the “Offering”) of securities and instruments either in the form of a public offering registered with the Securities and Exchange Commission, or in the form of a private placement pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (collectively the “Securities”), with the intention to raise $2,500,000. The terms of the Offering and the Securities shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”) to be documented by a purchase agreement, or to be mutually agreed upon by the Company and the Bank to be document by a underwriting agreement at a later time and nothing herein constitutes that the Bank would have the power or authority to bind the Company or impose an obligation for the Company to issue any Securities or complete the Offering. It is understood that Bank’s assistance in the Offering will be subject to the satisfactory completion of such investigation and inquiry into the affairs of the Company as Bank deems appropriate under the circumstances and to the receipt of all internal approvals of Bank in connection with the transaction. The date of the closing of the Offering shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and agrees that the execution of this Agreement does not constitute a commitment by the Bank to purchase the Securities and does not ensure the successful offering of the Securities or any portion thereof or the success of the Bank’s with respect to securing any other financing on behalf of the Company. The Bank may retain other brokers or dealers to act as co-underwriters, or sub-agents or selected dealers on its behalf in connection with the Offering.

 

SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.

 

A. Representations of the Company. Each of the representations and warranties (together with any related disclosure schedules thereto) and covenants made by the Company in connection with the Offering is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and is, as of the date of this Agreement and as of the Closing Date, hereby made to, and in favor of, the Bank. In addition to the foregoing, the Company represents and warrants that:

 

1. The Company is eligible to use free writing prospectuses in connection with the Offering pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. The Company will not, without the prior consent of the Bank, prepare, use or refer to, any free writing prospectus.

 

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

2. There are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except as set forth in the Registration Statement and SEC Reports.

 

SECTION 2. REPRESENTATIONS OF THE BANK. Univest represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the States applicable to the offers and sales of the Securities by such Bank, (iv) is and will be a body corporate validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this Agreement. Univest will immediately notify the Company in writing of any change in its status as such.

 

SECTION 3. COMPENSATION. In consideration of the services to be provided for hereunder, the Company shall pay to the Bank or their respective designees their pro rata portion (based on the Securities placed) of the following compensation with respect to the Securities which they are placing or underwriting.

 

A. A cash fee or as to an underwritten Offering an underwriter discount (the “Cash Fee”) equal to seven percent (7%) of the aggregate gross proceeds raised in the Offering to be paid at the Closing of the Offering

 

B. At the closing of the Offering, the Company agrees to reimburse Univest zero percent (0%) of the actual amount of the Offering as non-accountable expense of the Offering.

 

C. Subject to compliance with FINRA Rule 5110(f)(2)(D), the Company also agrees to reimburse the Bank for all reasonable travel and other out-of-pocket expenses, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $0,000. The Company will reimburse Bank directly as soon as applicable once requested. In the event this Agreement shall terminate prior to the consummation of the Offering, the Bank shall be entitled to reimbursement for actual expenses; provided, however, that such amount in no way limits or impairs the indemnification and contribution provisions of this Agreement.

 

D. Bank reserves the right to reduce any item of its compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that such Bank’s aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.

 

SECTION 4. INDEMNIFICATION. The Company agrees to the indemnification and other agreements set forth in the Indemnification Provisions (the “Indemnification”) attached hereto as Addendum A, the provisions of which are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

SECTION 5. ENGAGEMENT TERM. The Bank’s engagement hereunder shall be exclusive until the earlier of (i) the final closing date of the Offering and (ii) the date a party terminates the engagement according to the terms of the next sentence (such date, the “Termination Date” and the period of time during which this Agreement remains in effect is referred to herein as the “Term”). On and after January 10^th, 2025, the engagement may be terminated at any time by either party upon 60 days written notice to the other party, effective upon receipt of written notice to that effect by the other party. If the Company elects to terminate this Agreement for any reason even though the Bank was prepared to proceed with the Offering reasonably within the intent of this Agreement, and if within twelve (12) months following such termination, the Company completes any financing of equity, equity-linked or debt or other capital raising activity of the Company (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any of the Purchasers contacted by Bank during the term of this Agreement, then the Company will pay the Bank upon the closing of such financing the compensation set forth in Section 3 herein. Notwithstanding anything to the contrary contained herein, the provisions concerning the Company’s obligation, subject to FINRA Rule 5110 (g)(5)(B), to pay any fees actually earned pursuant to Section 3 hereof and the provisions concerning confidentiality, indemnification and contribution contained herein and the Company’s obligations contained in the Indemnification Provisions will survive any expiration or termination of this Agreement for any reason whatsoever; the Company shall be obligated to pay Bank its actual and accountable out-of-pocket expenses related to the Offering (including the fees and disbursements of Bank’s legal counsel) and, if applicable, for electronic road show service used in connection with the Offering. All fees due to the Bank shall be paid by the Company to the Bank on or before the Termination Date (in the event such fees are earned or owed as of the Termination Date). Furthermore, the Company agrees that during Bank’s engagement hereunder, all inquiries from prospective U.S. investors and with respect to the Offering will be referred to Bank. Additionally, except as set forth hereunder or otherwise disclosed to Bank in writing, the Company represents, warrants and covenants that no brokerage or finder’s fees or commissions are or will be payable by the Company or any subsidiary of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other third-party with respect to the Offering.

 

The Bank agrees, not to use any confidential information concerning the Company provided to the Bank by the Company for any purposes other than those contemplated under this Agreement.

 

SECTION 6. TAIL FINANCING. The Company and Univest agree that for a period of twelve (12) months from the closing date of the Offering, Univest shall be entitled to compensation commensurate with those set forth under Sections 3, from the sale of any equity, debt and/or equity derivative instruments to any investor actually introduced by Univest to the Company during the period between the date of this Agreement and the closing of the Offering (each, a “Tail Financing”), and such Tail Financing is consummated at any time within the twelve (12) month period from the closing date of the Offering. The fees in Section 3 do not apply to an At-The-Market offering.

 

SECTION 7. FUTURE SERVICE. The Company and Univest agree that for a period of eighteen (18) months from the closing date of the Offering, the Company grants Univest the right to provide investment banking services to the Company on an exclusive basis in the matters below, for which investment banking services are sought by the Company (such right, the “Right of First Refusal”), which right is exercisable in Univest’s sole discretion. For these purposes, investment banking services shall include, (a) acting as lead or joint-lead manager for any underwritten public offering; (b) acting as lead or joint book-runner and/or lead or joint placement agent, initial purchaser in connection with any private offering of securities of the Company; and (c) acting as financial advisor in connection with any sale or other transfer by the Company, directly or indirectly, of a majority or controlling portion of its capital stock or assets to another entity, any purchase or other transfer by another entity, directly or indirectly, of a majority or controlling portion of the capital stock or assets of the Company, and any merger or consolidation of the Company with another entity. Univest shall notify the Company of its intention to exercise the Right of First Refusal within 15 business days following notice in writing by the Company. Any decision by Univest to act in any such capacity shall be contained in separate agreements, which agreements would contain, among other matters, provisions for customary fees for transactions of similar size and nature, as may be mutually agreed upon, and indemnification of Univest and shall be subject to general market conditions. In compliance with FINRA Rule 5110(g)(6)(A), in no circumstances the Right of First Refusal shall have a duration of more than three years from the commencement of sales of the public offering or the termination date of the engagement between the Company and Univest. If Univest declines to exercise the Right of First Refusal, the Company shall have the right to retain any other person or persons to provide such services on terms and conditions which are not more favorable to such other person or persons than the terms declined by Univest. The Right of First Refusal granted hereunder may be terminated by the Company for “Cause,” which shall mean a material breach by Univest of this Agreement or a material failure by Univest to provide the services as contemplated by this Agreement. The services provided by Univest hereunder are solely for the benefit of the Company and are not intended to confer any rights upon any persons or entities not a party hereto (including, without limitation, securityholders, employees or creditors of the Company) as against Univest or its directors, officers, agents and employees.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

SECTION 8. BOARD OBSERVER. Upon closing of this Offering; Univest will have the right to appoint an individual to be an observer at all meetings of the Board of Directors for a period of one year from the appointment. This appointee will be notified of any and all meetings of the Board of Directors and have the ability to attend all meetings. They will not have the right to vote on any issues.

 

SECTION 9. INFORMATION; RELIANCE. The Company agrees that any information or advice rendered by the Bank in connection with this engagement is for the confidential use of the Company only in their evaluation of the Offering and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Bank’s prior written consent. The Company shall furnish, or cause to be furnished, to Bank all information requested by Bank for the purpose of rendering services hereunder and conducting due diligence (all such information being the “Information”). In addition, the Company agrees to make available to Bank upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company. The Company recognizes and confirms that Bank (a) will use and rely on the Information, including any documents provided to Purchasers in the Offering (the “Offering Documents”) and on information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (b) does not assume responsibility for the accuracy or completeness of the Information and such other information; and (c) will not make an appraisal of any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with Bank or its representatives to discuss all information relevant for disclosure and will cooperate in any investigation undertaken by Bank thereof. At the request of Bank, the Company shall deliver such legal letters (including, without limitation, negative assurance letters), opinions, comfort letters, officers’ and secretary certificates and good standing certificates, all in form and substance satisfactory to Bank and its counsel as is customary for the Offering. Bank shall be a third-party beneficiary of any representations, warranties, covenants, closing conditions and closing deliverables made by the Company in any Offering Documents, including representations, warranties, covenants, closing conditions and closing deliverables made to any Purchaser in the Offering.

 

SECTION 10. NO FIDUCIARY RELATIONSHIP. The Company acknowledges that Bank has been retained only by the Company, that Bank is providing services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of Bank is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto as against Bank or any of its affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), employees or agents. Unless otherwise expressly agreed in writing by Bank, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of Bank, and no one other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation or advice, written or oral, given by Bank to the Company in connection with Bank’s engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for any other purpose. Bank shall not have the authority to make any commitment binding on the Company. The Company, in its sole discretion, shall have the right to reject any Purchaser introduced to it by Bank. This Agreement does not create and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the Indemnification Provisions hereof. The Company acknowledges and agrees that Bank is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of such Bank hereunder, all of which are hereby expressly waived.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

SECTION 11. RELATED AGREMENTS. At each Offering, the Company shall enter into the following additional agreements:

 

	1.	Underwritten Offering. If an Offering is an underwritten Offering, the Company and Bank shall enter into a customary underwriting agreement in form and substance satisfactory to Bank and its counsel.
	2.	Best Efforts Offering. If an Offering is on a best efforts basis, the sale of Securities to the Purchasers in the Offering will be evidenced by a purchase agreement (“Purchase Agreement”) between the Company and such Purchasers in a form reasonably satisfactory to the Company and Bank. Bank shall be a third party beneficiary with respect to the representations, warranties, covenants, closing conditions and closing deliverables included in the Purchase Agreement. Prior to the signing of any Purchase Agreement, officers of the Company with responsibility for financial affairs will be available to answer inquiries from prospective Purchasers.
	3.	Escrow, Settlement and Closing. If each Offering is not settled via delivery versus payment (“DVP”), the Company and Bank shall enter into an escrow agreement with a third party escrow agent pursuant to which Bank’s compensation and expenses shall be paid from the gross proceeds of the Securities sold. If the Offering is settled in whole or in part via DVP, Bank shall arrange for its clearing agent to provide the funds to facilitate such settlement. The Company shall pay Bank closing costs, which shall also include the reimbursement of the out-of-pocket cost of the escrow agent or clearing agent, as applicable, which closing costs shall not exceed $12,900.
	4.	FINRA Amendments. Notwithstanding anything herein to the contrary, in the event that Bank determines that any of the terms provided for hereunder shall not comply with a FINRA rule, including but not limited to FINRA Rule 5110, then the Company shall agree to amend this Agreement (or include such revisions in the final underwriting agreement) in writing upon the request of Bank to comply with any such rules; provided that any such amendments shall not provide for terms that are less favorable to the Company than are reflected in this Agreement.

 

SECTION 12. GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

SECTION 13. ENTIRE AGREEMENT/MISC. This Agreement (including the attached Indemnification Provisions) embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by both Bank and the Company. The Company represents and warrants that it has all requisite power and authority to enter into and carry out the terms and provisions of this Agreement and the execution, delivery and performance of this Agreement does not breach or conflict with any agreement, document or instrument to which it is a party or bound. The representations, warranties, agreements and covenants contained herein shall survive the closing of the Offering and delivery of the Securities. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.

 

SECTION 14. CONFIDENTIALITY. The Bank, (i) will keep the Confidential Information (as such term is defined below) confidential and will not (except as required by applicable law or stock exchange requirement, regulation or legal process (“Legal Requirement”)), without the Company’s prior written consent, disclose to any person any Confidential Information, and (ii) will not use any Confidential Information other than in connection with the Offering. The Bank further agree, severally and not jointly, to disclose the Confidential Information only to its Representatives (as such term is defined below) who need to know the Confidential Information for the purpose of the Offering, and who are informed by the Bank of the confidential nature of the Confidential Information. The term “Confidential Information” shall mean, all confidential, proprietary and non-public information (whether written, oral or electronic communications) furnished by the Company to the Bank or its Representatives in connection with such Bank’s evaluation of the Offering. The term “Confidential Information” will not, however, include information which (i) is or becomes publicly available other than as a result of a disclosure by a Bank or its Representatives in violation of this Agreement, (ii) is or becomes available to a Bank or any of its Representatives on a non-confidential basis from a third- party, (iii) is known to a Bank or any of its Representatives prior to disclosure by the Company or any of its Representatives, or (iv) is or has been independently developed by a Bank and/or the Representatives without use of any Confidential Information furnished to it by the Company. The term “Representatives” shall mean Bank’s directors, board committees, officers, employees, financial advisors, attorneys and accountants. This provision shall be in full force until the earlier of (a) the date that the Confidential Information ceases to be confidential and (b) two years from the date hereof. Notwithstanding any of the foregoing, in the event that the Bank or any of their respective Representatives are required by Legal Requirement to disclose any of the Confidential Information, such Bank and their respective Representatives will furnish only that portion of the Confidential Information which such Bank or their respective Representative, as applicable, is required to disclose by Legal Requirement as advised by counsel, and will use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Confidential Information so disclosed.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

SECTION 15. NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.

 

SECTION 16. PRESS ANNOUNCEMENTS. The Company agrees that the Bank shall, from and after any Closing, have the right to reference the Offering and the Bank’s role in connection therewith in the Bank’s marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.

 

SECTION 17. CONFLICTS. The Company acknowledges that Bank and its affiliates may have and may continue to have investment banking and other relationships with parties other than the Company pursuant to which Bank may acquire information of interest to the Company. Bank shall have no obligation to disclose such information to the Company or to use such information in connection with any contemplated transaction.

 

SECTION 18. Anti-Money Laundering. To help the United States government fight the funding of terrorism and money laundering, the federal laws of the United States require all financial institutions to obtain, verify and record information that identifies each person with whom they do business. This means Bank must ask the Company for certain identifying information, including a government-issued identification number (e.g., a U.S. taxpayer identification number) and such other information or documents that Bank considers appropriate to verify the Company’s identity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

 

[The remainder of this page has been intentionally left blank.]

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Univest the enclosed copy of this Agreement.

 

	UNIVEST SECURITIES, LLC
		/s/ Bradley Richmond
	Name:	Bradley Richmond
		Oct 31 2024
	Title:	COO

 

Accepted and Agreed to as of the date first written above:

 

HOUSTON AMERICAN ENERGY CORP.
By:	/s/ John Terwilliger
	John Terwilliger
	10/29/24
Title:	CEO

 

Signature Page to Engagement Agreement Between Houston American and Univest Securities, LLC.
 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

ADDENDUM A

INDEMNIFICATION PROVISIONS

 

In connection with the engagement of Univest Securities, LLC(the “Bank”) or together with other broker dealers registered with FINRA and caused by Univest to also act as a manager (the “Banks”) by Houston American Energy Corp. (the “Company”) pursuant to an engagement agreement dated as of the date hereof, between the Company and the Bank(s), as it may be amended from time to time in writing (the “Agreement”), the Company hereby agrees as follows:

 

1. To the extent permitted by law, the Company will indemnify the Bank(s) and each of their affiliates, directors, officers, employees, shareholders, agents and employees of any of the foregoing (collectively the “Indemnified Persons”), from and against any and all claims, actions, suits, proceedings (including those of shareholders), damages, liabilities and expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred, whether or not the Company is a party thereto (collectively a “Claim”), that are (A) related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person in connection with the Company’s engagement of Bank(s), or (B) otherwise relate to or arise out of Bank(s)’ activities on the Company’s behalf under Bank(s)’ engagement, and the Company shall reimburse any Indemnified Person for all expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating, preparing or defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation in which any Indemnified Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined to have resulted from the gross negligence or willful misconduct of any such Indemnified Person for such Claim. The Company further agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of Bank(s) except for any Claim incurred by the Company as a result of such Indemnified Person’s gross negligence or willful misconduct.

 

2. Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company is requested by such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel for such Indemnified Person and the payment of the fees and expenses of such counsel, provided, however, that such counsel shall be satisfactory to the Indemnified Person and provided further that if the legal counsel to such Indemnified Person reasonably determines that having common counsel would present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim, includes an Indemnified Person and the Company, and legal counsel to such Indemnified Person reasonably concludes that there may be legal defenses available to it or other Indemnified Persons different from or in addition to those available to the Company, such Indemnified Person will employ its own separate counsel (including local counsel, if necessary) to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. If such Indemnified Person does not request that the Company assume the defense of such Claim, such Indemnified Person will employ its own separate counsel (including local counsel, if necessary) to represent or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified Person shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully indemnified by the Company therefor, including without limitation, for the reasonable fees and expenses of its counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In addition, with respect to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to retain his, her or its own counsel therefor at his, her or its own expense.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

3. The Company agrees to notify the Bank(s) promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by the Agreement.

 

4. If for any reason the foregoing indemnity is unavailable to an Indemnified Person or insufficient to hold the an Indemnified Person harmless, then the Company and Bank(s) shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and Bank(s) on the other, in connection with Bank(s)’ engagement referred to above, subject to the limitation that in no event shall the amount of Bank(s)’ contribution to such Claim exceed the amount of fees actually received by Bank(s) from the Company pursuant to Bank(s)’ engagement. The Company hereby agrees that the relative benefits to the Company, on the one hand, and Bank(s) on the other, with respect to Bank(s)’ engagement shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company pursuant to the Offering (whether or not consummated) for which Bank(s) are engaged to render services bears to (b) the fee paid or proposed to be paid to Bank(s) in connection with such engagement.).

 

5. The Company’s indemnity, reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise adversely affect any rights that any Indemnified Person may have at law or at equity and (b) shall be effective whether or not the Company is at fault in any way.

 

6. These Indemnification Provisions shall remain in full force and effect whether or not the transaction contemplated by the Agreement is completed and shall survive the termination of the Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under the Agreement or otherwise.

 

UNIVEST SECURITIES, LLC	75 ROCKEFELLER PLAZA 18C	+1 212.343.8888
	NEW YORK, NEW YORK

 

 

 

Exhibit 10.2

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

SUBSCRIPTION AGREEMENT

 

To subscribe for

shares of Common Stock in the

private offering of

 

HOUSTON AMERICAN ENERGY CORP.

 

1.	On the Signature Page for the Subscription Agreement, Date and Fill in the number of share of the Company’s common stock, par value $0.001 per share (the “Common Stock”) that you wish to purchase at a price of $1.14669431 per share (the “Securities”).

 

2.	Initial and sign the Accredited Investor Certification attached to this Subscription Agreement (begins on Page 15 with signature page on Page 18).

 

3.	Complete and Sign the signature page attached to this Subscription Agreement (see Page 14).

 

4.	Complete and Sign the Selling Stockholder Notice and Questionnaire (begins on Page 19 with signature page on Page 24).

 

For wiring funds, use the following instructions:

 

	Bank Name:	[***]
	Bank Address:	[***]
		[***]
	Acct. Name:	Houston American Energy Corp.
	ABA Number:	[***]
	SWIFT Code:
	A/C Number:	[***]

 

Investors will purchase the number of shares of Common Stock of Houston American Energy Corp. , a Delaware corporation (the “Company”), set forth on the signature page to the Subscription Agreement. The Securities are being offered (the “Offering”) by the Company pursuant to the offering terms set forth in the Company’s Subscription Agreement (the “Agreement”). The Placement Agent is Univest Securities, LLC (the “Placement Agent”)

 

The Securities are being offered on a “best efforts” basis up to the Maximum Offering of $2,500,000 of shares of the Common Stock (the “Maximum Offering”) at a purchase price per share of $1.14669431. The Securities may be sold at one or more closings of the Offering (each a “Closing”, and, collectively, the “Closings”), at any time during the Offering Period (defined hereafter). The subscription for the Securities will be made in accordance with and subject to the terms and conditions of the Subscription Agreement.

 

ALL SUBSCRIPTION DOCUMENTS MUST BE FILLED IN AND SIGNED EXACTLY AS SET FORTH WITHIN.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

SUBSCRIPTION AGREEMENT FOR

 

HOUSTON AMERICAN ENERGY CORP.

 

November 8. 2024

 

Houston American Energy Corp.

801 Travis, Suite 1425

Houston, TX 77002

 

Ladies and Gentlemen:

 

1. Subscription. The undersigned (the “Purchaser”) will purchase the number of shares (the “Securities”) of common stock, par value $0.001 per share (“Common Stock”) of Houston American Energy Corp., a Delaware corporation (the “Company”), set forth on the signature page to this agreement (the “Subscription Agreement” or this “Agreement”). The Securities are being offered (the “Offering”) by the Company pursuant to this Subscription Agreement dated hereof, as may be amended and/or supplemented from time to time (the “Subscription Agreement”).

 

The Securities are being offered on a “best efforts” basis with respect to the maximum of $2,500,000 of shares of Common stock (the “Maximum Offering”) at a purchase price per share of $1.14669431; provided, that in no case will the number of shares sold exceed 19.99% of the number of issued and outstanding shares of the Common Stock as of the Closing. The Securities will be sold at the closing of the Offering (the “Closing”), at any time prior to the Termination Date (defined hereafter). The minimum investment amount that may be purchased by an Investor is a purchase price of $100,000 (the “Investor Minimum Investment”). The subscription for the Securities will be made in accordance with and subject to the terms and conditions of this Subscription Agreement.

 

The Securities will be offered through the earlier of (i) the date upon which subscriptions for the Maximum Offering offered hereunder have been accepted; (ii) November 15, 2024 (subject to the right of the Company and the Placement Agent to extend the offering without further notice to investors), (iii) the date upon which the Company and the Placement Agent elect to terminate the Offering or (iv) the date upon which the Company elects to terminate the Offering (the “Termination Date”).

 

2. Payment. The Purchaser will immediately make a wire transfer payment to the Company in the full amount of the purchase price of the Securities being subscribed for. Together with the wire transfer of the full purchase price, the Purchaser is delivering a completed and executed signature page to this Subscription Agreement along with a completed and executed Accredited Investor Certification, which are annexed hereto.

 

3. Acceptance of Subscription. The Purchaser understands and agrees that the Company, in its sole discretion, reserves the right to accept this or any other subscription for the Securities, in whole or in part, notwithstanding prior receipt by the Purchaser of notice of acceptance of this or any other subscription. The Company will have no obligation hereunder until the Company executes and delivers to the Purchaser an executed copy of the Subscription Agreement. If Purchaser’s subscription is rejected in whole (at the sole discretion of the Company), the Offering is terminated, all funds received from the Purchaser will be returned without interest, penalty, expense or deduction, and this Subscription Agreement will thereafter be of no further force or effect. If Purchaser’s subscription is rejected in part (at the sole discretion of the Company) and the Company accepts the portion not so rejected, the funds for the rejected portion of such subscription will be returned without interest, penalty, expense or deduction, and this Subscription Agreement will continue in full force and effect to the extent such subscription was accepted.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

4. Representations and Warranties of the Purchaser. The Purchaser hereby acknowledges, represents, warrants, and agrees as follows:

 

(a) None of the Securities are registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Purchaser understands that the offering and sale of the Securities is intended to be exempt from registration under the Securities Act, by virtue of Section 4(a)(2) thereof and the provisions of Regulation D promulgated thereunder, based, in part, upon the representations, warranties and agreements of the Purchaser contained in this Subscription Agreement;

 

(b) The Purchaser and the Purchaser’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, “Advisors”), have received and have carefully reviewed this Subscription Agreement and all other documents requested by the Purchaser or its Advisors, if any, and understand the information contained therein, prior to the execution of this Subscription Agreement;

 

(c) Neither the U.S. Securities and Exchange Commission (the “Commission”) nor any state securities commission has approved or disapproved of the Securities or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy of the Subscription Agreement. The Subscription Agreement have not been reviewed by any federal, state or other regulatory authority. Any representation to the contrary may be a criminal offense;

 

(d) All documents, records, and books pertaining to the investment in the Securities including, but not limited to, all information regarding the Company and the Securities, have been made available for inspection and reviewed by the Purchaser and its Advisors, if any;

 

(e) The Purchaser and its Advisors, if any, have reviewed the Company’s filings with the Commission, including but not limited to, the Company’s Quarterly Reports on Form 10-Q for the periods ended June 30, 2024, as well as the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

(f) The Purchaser and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from the Company’s officers and any other persons authorized by the Company to answer such questions, concerning, among other related matters, the Offering, the Securities, the Subscription Agreement and the business, financial condition, results of operations and prospects of the Company and all such questions have been answered by the Company to the full satisfaction of the Purchaser and its Advisors, if any;

 

(g) In evaluating the suitability of an investment in the Company, the Purchaser has not relied upon any representation or other information (oral or written) other than as stated in the Subscription Agreement or as contained in documents so furnished to the Purchaser or its Advisors, if any, by the Company or the Placement Agent in writing;

 

(h) The Purchaser is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television, radio or over the Internet, in connection with the offering and sale of the Securities and is not subscribing for the Securities and did not become aware of the Offering through or as a result of any seminar or meeting to which the Purchaser was invited by, or any solicitation of a subscription by, a person not previously known to the Purchaser in connection with investments in securities generally;

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(i) The Purchaser has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Subscription Agreement or the transactions contemplated hereby (other than fees to be paid by the Company to the Placement Agent);

 

(j) The Purchaser, either alone or together with its Advisors, if any, has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with the Offering to evaluate the merits and risks of an investment in the Securities and the Company and to make an informed investment decision with respect thereto;

 

(k) The Purchaser is not relying on the Company, the Placement Agent or any of their respective employees or agents with respect to the legal, tax, economic and related considerations of an investment in any of the Securities and the Purchaser has relied on the advice of, or has consulted with, only its own Advisors;

 

(l) The Purchaser is acquiring the Securities solely for such Purchaser’s own account for investment and not with a view to resale or distribution thereof, in whole or in part. The Purchaser has no agreement or arrangement, formal or informal, with any person to sell or transfer all or any part of any of the Securities and the Purchaser has no plans to enter into any such agreement or arrangement;

 

(m) The Purchaser understands and agrees that purchase of the Securities is a high-risk investment and the Purchaser is able to afford an investment in a speculative venture having the risks and objectives of the Company, including a risk of total loss of such investment. The Purchaser must bear the substantial economic risks of the investment in the Securities indefinitely because none of the Securities may be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws or an exemption from such registration is available. Legends will be placed on the certificates representing the Securities to the effect that such securities have not been registered under the Securities Act or applicable state securities laws and appropriate notations thereof will be made in the Company’s books. The Purchaser understands that there is no public market for the Securities to be issued in the Offering and the Company has no intention of seeking an active trading market for these Securities;

 

(n) The Purchaser has adequate means of providing for such Purchaser’s current financial needs and foreseeable contingencies and has no need for liquidity from its investment in the Securities for an indefinite period of time;

 

(o) The Purchaser is aware that an investment in the Securities involves a number of very significant risks and has carefully read the Subscription Agreement and the matters under the caption “Risk Factors” in the Company’s most recent public filings made with the Commission’s on its EDGAR website and understands any of such risk may materially adversely affect the Company’s operations and future prospects;

 

(p) At the time that such Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Commission under the Securities Act and has truthfully and accurately completed the Selling Stockholder Notice and Questionnaire attached to this Subscription Agreement and will submit to the Company such further assurances of such status as may be reasonably requested by the Company;

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(q) The Purchaser: (i) if a natural person, represents that the Purchaser has reached the age of 21 and has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company, or association, joint stock company, trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities, such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority to execute and deliver this Subscription Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Securities, the execution and delivery of this Subscription Agreement has been duly authorized by all necessary action, this Subscription Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Subscription Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Subscription Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom the Purchaser is executing this Subscription Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant to this Subscription Agreement and make an investment in the Company, and represents that this Subscription Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this Subscription Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Purchaser is a party or by which it is bound;

 

(r) The Purchaser and its Advisors, if any, have had the opportunity to obtain any additional information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Subscription Agreement, including, but not limited to, the terms and conditions of the Securities as set forth therein, and the Subscription Agreement and all other related documents received or reviewed in connection with the purchase of the Securities and have had the opportunity to have representatives of the Company provide them with such additional information regarding the terms and conditions of this particular investment and the financial condition, results of operations, business and prospects of the Company deemed relevant by the Purchaser or its Advisors, if any, and all such requested information, to the extent the Company had such information in its possession or could acquire it without unreasonable effort or expense, has been provided by the Company in writing to the full satisfaction of the Purchaser and its Advisors, if any;

 

(s) The Purchaser represents to the Company that any information which the undersigned has heretofore furnished or is furnishing herewith to the Company is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under federal and state securities laws in connection with the offering of Securities ;

 

(t) The Purchaser has significant prior investment experience, including investment in non-listed and non-registered securities. The Purchaser has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The Purchaser’s overall commitment to investments which are not readily marketable is not excessive in view of the Purchaser’s net worth and financial circumstances and the purchase of the Securities will not cause such commitment to become excessive. This investment is a suitable one for the Purchaser;

 

(u) The Purchaser is satisfied that it has received adequate information with respect to all matters which it or its Advisors, if any, consider material to its decision to make this investment;

 

(v) The Purchaser acknowledges that any and all estimates or forward-looking statements or projections provided to the Purchaser by the Company and included in the Subscription Agreement were prepared in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed, will not be updated by the Company and should not be relied upon;

 

(w) Reserved;

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(x) Within five (5) days after receipt of a request from the Company, the Purchaser will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws and ordinances to which the Company is subject;

 

(y) THE PURCHASER ACKNOWLEDGES THAT SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL;

 

(z) The Purchaser acknowledges that the Securities have not been recommended by any federal or state securities commission or regulatory authority. In making an investment decision, investors must rely on their own examination of the Company and the terms of the Offering, including the merits and risks involved. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Subscription Agreement. Any representation to the contrary is a criminal offense. The Securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and the applicable state securities laws or pursuant to registration or exemption therefrom. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time;

 

(aa) (For ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Purchaser or Plan fiduciary (a) is responsible for the decision to invest in the Company; (b) is independent of the Company and any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Purchaser or Plan fiduciary has not relied on any advice or recommendation of the Company or any of its affiliates; and

 

(bb) The Purchaser has read in its entirety the Subscription Agreement and all exhibits, annexes and schedules thereto, including, but not limited to, all information relating to the Company and the Securities, and understands to its full satisfaction all information included in the Subscription Agreement.

  

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

(cc) The Purchaser consents to the placement of a legend on any certificate or other document evidencing the Securities that such securities have not been registered under the Securities Act or any state securities or “blue sky” laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. The Purchaser is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES OR “BLUE SKY LAWS,” AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED

 

(dd) The Purchaser acknowledges that if he or she is a Registered Representative of a Financial Industry Regulatory Authority, Inc. (“FINRA”) member firm, he or she must give such firm the notice required by the FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm prior to an investment in the Securities.

 

(ee) The Purchaser represents that (i) the Purchaser was contacted regarding the sale of the Securities by the Company or the Placement Agent (or another person whom the Purchaser believed to be an authorized agent or representative thereof) with whom the Purchaser had a prior substantial pre-existing relationship and (ii) it did not learn of the offering of the Securities by means of any form of general solicitation or general advertising, and in connection therewith, the Purchaser did not (A) receive or review any advertisement, article, notice or other communication published in a newspaper or magazine or similar media or broadcast over television or radio, whether closed circuit, or generally available; or (B) attend any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.

 

(ff) The Purchaser understands, acknowledges and agrees with the Company that this subscription may be rejected, in whole or in part, by the Company or the Placement Agent, in its sole and absolute discretion, at any time before any Closing notwithstanding prior receipt by the Purchaser of notice of acceptance of the Purchaser’s subscription.

 

(gg) The Purchaser agrees not to issue any public statement with respect to the Offering, Purchaser’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law.

 

(hh) The Purchaser acknowledges that the information contained in the Subscription Agreement or otherwise made available to the Purchaser is confidential and non-public and agrees that all such information shall be kept in confidence by the Purchaser and neither used by the Purchaser for the Purchaser’s personal benefit (other than in connection with this subscription) nor disclosed to any third party for any reason, notwithstanding that a Purchaser’s subscription may not be accepted by the Company; provided, however, that (a) the Purchaser may disclose such information to its affiliates and advisors who may have a need for such information in connection with providing advice to the Purchaser with respect to its investment in the Company so long as such affiliates and advisors have an obligation of confidentiality, and (b) this obligation shall not apply to any such information that (i) is part of the public knowledge or literature and readily accessible at the date hereof, (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of this provision) or (iii) is received from third parties without an obligation of confidentiality (except third parties who disclose such information in violation of any confidentiality agreements or obligations, including, without limitation, any subscription or other similar agreement entered into with the Company).

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(ii) Other than with respect to the transactions contemplated herein, since the earlier to occur of: (i) the time that the Purchaser was first contacted by the Company or the Placement Agent regarding an investment in the Company and (ii) the thirtieth (45^th) day prior to the date hereof, neither the Purchaser nor any affiliate of the Purchaser which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to the Purchaser’s investments or trading or information concerning such Purchaser’s investments, including in respect of the Securities, or (z) is subject to the Purchaser’s review or input concerning such affiliate’s investments or trading decisions (collectively, “Trading Affiliates”) has, directly or indirectly, nor has any person acting on behalf of, or pursuant to, any understanding with such Purchaser or Trading Affiliates effected or agreed to effect any transactions in the securities of the Company or involving the Company’s securities.

 

5. Representations and Warranties of the Company. Subject to any qualifications set forth herein, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a) Subsidiaries. Other than HAEC Louisiana E&P, Inc., the Company has no subsidiary.

 

(b) Organization and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

(d) No Conflicts. The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not: (i) conflict with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Subscription Agreement, other than: (i) the notice and/or application(s) to each applicable Trading Market, if any, for the issuance and sale of the Offering Shares and the listing of the Offering Shares for trading thereon in the time and manner required thereby, and (ii) the filing of a Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the Subscription Agreement, will be duly and validly issued, fully paid and, if and as applicable, nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Offering Shares at least equal to the Required Minimum on the date hereof.

 

(g) Capitalization. The capitalization of the Company is as set forth in the Company’s SEC Reports. The Company has not issued any capital stock and/or Common Stock Equivalents not set forth in the SEC Reports. Except as set forth in the SEC Reports, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Subscription Agreement. Except as a result of the purchase and sale of the Securities or as described in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except as set forth in the SEC Reports, the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of securities of the Company to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock and other securities of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except for the Company’s articles of incorporation, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

 

(j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of the Subscription Agreement or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as described in the SEC Reports, since December 31, 2018, neither the Company, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission or any state securities administrator involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(k) Compliance. The Company is not: (i) in default under or in violation of and no event has occurred that has not been waived that, with notice or lapse of time or is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) and has not been, in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

(l) Regulatory Permits. The Company possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as presently conducted, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

(m) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $100,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(n) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(o) Certain Fees. No brokerage, finder’s fees, commissions or due diligence fees are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Subscription Agreement except for the fees payable to the Placement Agent. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 6(r) that may be due in connection with the transactions contemplated by the Subscription Agreement.

 

(p) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.

 

(q) Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2 and in the Subscription Agreement entered into by each Purchaser in connection with this Agreement, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(v) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the registration of any such securities under the Securities Act.

 

(y) Reserved.

 

(z) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

(aa) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.

 

(bb) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Subscription Agreement and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Subscription Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Subscription Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

(cc) Money Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(dd) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated.

 

(ee) Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(ff) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

(gg) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the securities of the Company, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.

 

(hh) DTC Status. The Company’s transfer agent (the “Transfer Agent”) is a participant in and the Common Stock is eligible for transfer pursuant to the Depository Trust Company Automated Securities Transfer Program.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

(ii) OFAC. Neither the Company nor, to the Company’s knowledge, any director, officer, agent, employee, affiliate or person acting on its behalf, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myranmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any person currently subject to any U.S. sanctions.

 

(jj) Reserved.

 

(kk) Reserved.

 

6. Indemnification. The Purchaser agrees to indemnify and hold harmless the Company, the Placement Agent and each of their respective officers, directors, managers, employees, agents, attorneys, control persons and affiliates from and against all losses, liabilities, claims, damages, costs, fees and expenses whatsoever (including, but not limited to, any and all expenses incurred in investigating, preparing or defending against any litigation commenced or threatened) based upon or arising out of any actual or alleged false acknowledgement, representation or warranty, or misrepresentation or omission to state a material fact, or breach by the Purchaser of any covenant or agreement made by the Purchaser herein or in any other document delivered in connection with this Subscription Agreement.

 

7. Binding Effect. This Subscription Agreement will survive the death or disability of the Purchaser and will be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives, and permitted assigns. If the Purchaser is more than one person, the obligations of the Purchaser hereunder will be joint and several and the agreements, representations, warranties and acknowledgments herein will be deemed to be made by and be binding upon each such person and such person’s heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

8. Modification. This Subscription Agreement will not be modified or waived except by an instrument in writing signed by the party against whom any such modification or waiver is sought.

 

9. Notices. Any notice or other communication required or permitted to be given hereunder will be in writing and will be mailed by certified mail, return receipt requested, or delivered against receipt to the party to whom it is to be given (a) if to the Company, at the address set forth in this Subscription Agreement or (b) if to the Purchaser, at the address set forth on the signature page hereof (or, in either case, to such other address as the party will have furnished in writing in accordance with the provisions of this Section 10). Any notice or other communication given by certified mail will be deemed given at the time of certification thereof, except for a notice changing a party’s address which will be deemed given at the time of receipt thereof. Any notice or other communication given by overnight courier will be deemed given at the time of delivery.

 

10. Assignability. This Subscription Agreement and the rights, interests and obligations hereunder are not transferable or assignable by the Purchaser and the transfer or assignment of any of the Securities will be made only in accordance with all applicable laws.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

  

11. Applicable Law. This Subscription Agreement will be governed by and construed under the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York. The parties hereto (1) agree that any legal suit, action or proceeding arising out of or relating to this Subscription Agreement will be instituted exclusively in New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, (2) waive any objection which the parties may have now or hereafter to the venue of any such suit, action or proceeding, and (3) irrevocably consent to the jurisdiction of the New York State Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the parties hereto further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the New York State Supreme Court, County of New York, or in the United States District Court for the Southern District of New York and agrees that service of process upon it mailed by certified mail to its address will be deemed in every respect effective service of process upon it, in any such suit, action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.

 

12. Blue Sky Qualification. The purchase of Securities pursuant to this Subscription Agreement is expressly conditioned upon the exemption from qualification of the offer and sale of the Securities from applicable federal and state securities laws.

 

13. Use of Pronouns. All pronouns and any variations thereof used herein will be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons referred to may require.

 

14. Confidentiality. The Purchaser acknowledges and agrees that any information or data the Purchaser has acquired from or about the Company not otherwise properly in the public domain, was received in confidence. The Purchaser agrees not to divulge, communicate or disclose, except as may be required by law or for the performance of this Subscription Agreement, or use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any confidential information of the Company, including any trade or business secrets of the Company and any business materials that are treated by the Company as confidential or proprietary, including, without limitation, confidential information obtained by or given to the Company about or belonging to third parties.

 

15. Miscellaneous.

 

(a) This Subscription Agreement, constitute the entire agreement between the Purchaser and the Company with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions.

 

(b) Each of the Purchaser’s and the Company’s representations and warranties made in this Subscription Agreement will survive the execution and delivery hereof and delivery of the Securities.

 

(c) Each of the parties hereto will pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

 

(d) This Subscription Agreement may be executed in two or more counterparts each of which will be deemed an original, but all of which will together constitute one and the same instrument.

 

(e) Each provision of this Subscription Agreement will be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality will not impair the operation of or affect the remaining portions of this Subscription Agreement.

 

(f) Paragraph titles are for descriptive purposes only and will not control or alter the meaning of this Subscription Agreement as set forth in the text.

 

16. Signature Page. It is hereby agreed by the parties hereto that the execution by the Purchaser of this Subscription Agreement, in the place set forth herein below, will be deemed and constitute the agreement by the Purchaser to be bound by all of the terms and conditions hereof.

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

HOUSTON AMERICAN ENERGY CORP.

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

Purchaser hereby elects to purchase a total of 2,180,180 shares of Common Stock, for an aggregate subscription amount of $2,500,000. (NOTE: to be completed by the Purchaser).

 

By execution and delivery of this signature page, you are (a) agreeing to become (i) a Purchaser, as defined above, dated as of November 8, 2024.

 

If the Purchaser is an INDIVIDUAL, and if purchased as JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY:

 

Purchaser:
Print Name				Social Security Number
Signature		Date		Mailing Address
Co-Purchaser (if applicable):
Print Name				Social Security Number
Signature		Date		Address (if different from above)

 

If the Purchaser is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or TRUST:

 

Bower Family Holdings, LLC,				[***]
Name of Partnership, Corporation, Limited Liability Company or Trust				Federal Taxpayer Identification Number
/s/ Kevin Bower		11/7/24		[***]
Signature		Date		[***]
Kevin Bower
Print Name				Business Address
President
Title

 

AGREED AND ACCEPTED:

 

HOUSTON AMERICAN ENERGY CORP.

 

/s/ John F. Terwilliger		Nov 8, 2024
Print Name		Date
CEO
Title

 

 

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE OF INFORMATION THAT THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE AND CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

 

HOUSTON AMERICAN ENERGY CORP.

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(All individual investors must INITIAL where appropriate.

Where there are joint investors both parties must INITIAL):

 

Initial(s) _______

I certify that I have a “net worth” of at least $1 million either individually or through aggregating my individual holdings and those in which I have a joint, community property or other similar shared ownership interest with my spouse. For purposes of calculating net worth under this paragraph, (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

 

Initial(s) _______

I certify that I have had an annual gross income for the past two years of at least $200,000 (or $300,000 jointly with my spouse) and expect my income (or joint income, as appropriate) to reach the same level in the current year.

 

For Non-Individual Investors

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial(s) ___KB____	The undersigned certifies that it is a partnership, corporation, limited liability company or business trust that is 100% owned by persons who meet either of the criteria for individual investors, above.
Initial(s) ___KB____	The undersigned certifies that it is a partnership, corporation, limited liability company or business trust that has total assets of at least $5 million and was not formed for the purpose of investing in the Company.
Initial(s) ___KB____	The undersigned certifies that it is an employee benefit plan whose investment decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a bank, savings and loan association, insurance company or registered investment adviser.
Initial(s) ___KB____	The undersigned certifies that it is an employee benefit plan whose total assets exceed $5,000,000 as of the date of the Subscription Agreement.
Initial(s) ___KB____	The undersigned certifies that it is a self-directed employee benefit plan whose investment decisions are made solely by persons who meet either of the criteria for individual investors, above.
Initial(s) ___KB____	The undersigned certifies that it is a U.S. bank, U.S. savings and loan association or other similar U.S. institution acting in its individual or fiduciary capacity.
Initial(s) ___KB____	The undersigned certifies that it is a broker-dealer registered pursuant to §15 of the Securities Exchange Act of 1934.
Initial(s) ___KB____	The undersigned certifies that it is an organization described in §501(c)(3) of the Internal Revenue Code with total assets exceeding $5,000,000 and not formed for the specific purpose of investing in the Company.
Initial(s) ___KB____	The undersigned certifies that it is a trust with total assets of at least $5,000,000, not formed for the specific purpose of investing in Company, and whose purchase is directed by a person with such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.
Initial(s) ___KB____	The undersigned certifies that it is a plan established and maintained by a state or its political subdivisions, or any agency or instrumentality thereof, for the benefit of its employees, and which has total assets in excess of $5,000,000.
Initial(s) ___KB____	The undersigned certifies that it is an insurance company as defined in §2(a)(13) of the Securities Act of 1933, as amended, or a registered investment company.

 

 

 

Exhibit 10.3

 

AGREEMENT

 

This Agreement (“Agreement”) is entered into by and between Houston American Energy Corp., a Delaware Corporation (the “Company”), and John F. Terwilliger (“Terwilliger” and, together with the Company, collectively, the “Parties”) effective as of November 11, 2024.

 

RECITALS

 

WHEREAS, the Parties are parties to that certain Change in Control Agreement dated as of June 11, 2012 (“The “CIC Agreement”) and wish to terminate that Agreement and to provide for an orderly transition of the role of Chief Executive Officer of the Company.

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties agree as follows:

 

AGREEMENT TERMS

 

1. One Time Bonus. The Company will pay Terwilliger a one time bonus of $800,000 (less applicable tax withholdings) on November 11, 2024 (the “Effective Date”) and in exchange, Terwilliger and the Company agree that the CIC Agreement is terminated and null and void, and no payments will be made pursuant to the CIC Agreement.

 

2. Transition of Chief Executive Officer Position. The Parties agree that Terwilliger will step down as Chief Executive Officer effective as of the Effective Date, but will continue on as advisor to the Chief Executive Officer through December 31, 2024 at his current salary and will retire effective on January 1, 2025.

 

3. Assigns and Successors-in-Interest. This Agreement shall be binding upon and inure to the benefit of the heirs, successors, and assigns of the undersigned hereto.

 

4. Applicable Law and Choice of Venue. The existence, validity, construction, and operation of this Agreement, and all of its covenants, agreements, representations, warranties, terms, and conditions, shall be determined in accordance with the laws of the State of Texas. In the event of a suit or other legal proceeding arising out of this Agreement, any such action shall be brought in the state or federal courts located in Houston, Texas. The Parties consent to the jurisdiction of those courts for any dispute or proceeding relating to this Agreement.

 

5. Integration. This Agreement contains the entire agreement between the Parties, and fully supersedes any and all prior and/or contemporaneous agreements or understandings between the undersigned that pertain to the subject matter hereof. The terms of this Agreement may not be contradicted by evidence of any prior or contemporaneous agreement and no extrinsic evidence whatsoever may be introduced to vary its terms in any judicial proceeding involving this Agreement. This Agreement cannot be modified or amended, except in writing executed by the Parties.

 

6. Counterparts. This Agreement may be executed in counterparts and, as executed, shall constitute one agreement, binding on all signatories who have executed a counterpart, notwithstanding that all such signatories may not have executed the original or the same counterparts. The Parties acknowledge and represent that undersigned individuals who execute this Agreement on their behalf has authority to do so.

 

7. Electronic Signatures. This Agreement may be executed by telecopy or electronically submitted signatures. This Agreement shall be binding on the Parties, and each of them, notwithstanding that all signatories’ telecopied or electronically submitted signature pages are not to the same counterparts. Scanned copies of signatures sent via e-mail shall be accepted as originals.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

1

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above:

 

	Houston American energy corp.
	By:	/s/ Stephen P. Hartzell
	Name:	Stephen P. Hartzell
	Title:	Chairman

 

	/s/ John F. Terwilliger
	John F. Terwilliger

 

2

 

 

Exhibit 99.1

 

 

Houston American Energy Corp. Announces Closing of Private Placement and New Leadership to Boost Growth & Transformation

 

HOUSTON, TX, November 11, 2024 – Houston American Energy Corp. (NYSE American: HUSA) (the “company”) today announced that the company has closed a private placement offering for the issuance and sale of 2,180,180 shares of common stock of the company (the “private placement”) to an accredited investor. The aggregate gross proceeds to the company from the offering were approximately $2.5 million, before deducting placement agent fees and other offering expenses.

 

Univest Securities, LLC acted as the exclusive placement agent for the private placement.

 

The company today also announced certain management changes.

 

John F. Terwilliger, the company’s President and Chief Executive Officer, has advised the company that he would be stepping down from those positions, effective November 11, 2024. Mr. Terwilliger will provide advisory services to the company for a limited period of time to effect an orderly transition. Mr. Terwilliger will continue to serve as a director of the company.

 

The company’s board of directors has appointed Peter F. Longo to serve as President and Chief Executive Officer of the company, effective on November 11, 2024. Mr. Longo will also join the company’s board as a director effective November 11, 2024.

 

Mr. Longo is a seasoned and innovative executive. Mr. Longo currently serves as the Chairman of Cyient, Inc. the U.S. subsidiary of Cyient, Ltd. Cyient has approximate revenues of $700 million and provides engineering, manufacturing, geospatial, network, and operations management services to global industry leaders in various sectors including all aspects of the energy sector. Prior to Cyient, Mr. Longo served as SVP of Operations for United Technologies Corp. (UTC) prior to its merger with Ratheon. Peter served as CFO, and CIO at a number of its subsidiaries including UTC Aerospace Systems, Pratt & Whitney, Sikorsky, & Hamilton Sundstrand.

 

Peter Longo: “Houston American Corp. has a long history in the oil & gas sector. I am honored to be in a position to help drive shareholder value as we embark on this new period of transition and growth for Houston American Corp. The funds received in the private placement will enable us to explore opportunities to add to our portfolio. We will be seeking out new opportunities in various parts of the energy sector. The demand for all forms of energy is only growing and there are many opportunities in oil & gas, renewable energy, and energy transition technologies. I am committed to unlocking new opportunities for innovation and growth for the company.”

 

 

The securities sold in the private placement were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws. Accordingly, such securities may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from such registration requirements. The securities were offered only to accredited investors

 

The company intends to use the net proceeds from the offering for general corporate purposes and to pursue strategic growth initiatives which may include acquisitions and investments in the energy sector; including oil & gas, energy transition, renewable energy, and/or companies that service these sectors. The company will consider various opportunities including portfolio companies of Bower Family Holdings, LLC or any other investor of the company.

 

In addition, the board has received the resignation of James A. Schoonover as a director from the board, effective November 11, 2024. Mr. Schoonover’s departure from the board was not due to any disagreement between the director and the company. Robert J. Bailey, has joined the board of directors of the company effective November 11, 2024.

 

Cautionary Note Regarding Forward-Looking Information:

 

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information is based on management’s current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking information in this news release includes statements about: the use of the net proceeds of the offerings and the next stages of the Company’s commercial activities.

 

With respect to the forward-looking information contained in this news release, the company has made numerous assumptions. While the company considers these assumptions to be reasonable, these assumptions are inherently subject to significant business, economic, competitive, market and social uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause the company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing our business is disclosed in our Annual Report on Form 10-K and other filings with the SEC on www.sec.gov.

 

All forward-looking information herein is qualified in its entirety by this cautionary statement, and the company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.

 

For additional information, view the company’s website at www.houstonamerican.com or contact Houston American Energy Corp. at [phone].

 

 

Cover	Nov. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 12, 2024
Entity File Number	1-32955
Entity Registrant Name	HOUSTON AMERICAN ENERGY CORP.
Entity Central Index Key	0001156041
Entity Tax Identification Number	76-0675953
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	801 Travis Street
Entity Address, Address Line Two	Suite 1425
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77002
City Area Code	713
Local Phone Number	222-6966
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	HUSA
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false
Entity Information, Former Legal or Registered Name	including area code)

---