Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
The information required by Item 201 of Regulation S-K is contained in ‘‘ Item 1. Business .’’
On December 31, 2020, our Board made a grant to our directors, executive officers and employees, entitling them to receive an aggregate of 200,900 Common Shares which shares will not be issued to the award recipients unless certain time or performance based vesting criteria, as applicable, are met, in which case the vesting will occur in equal parts over a three-year period. On September 1, 2020 our Board made a grant to our CEO, entitling him to receive an aggregate of 125,000 Common Shares which shares will not be issued to the award recipient unless certain performance based vesting criteria are met, in which case the vesting will occur over a three-year period. The awards were made under the 2020 Equity Incentive Plan in accordance with Rule 701 promulgated under the Securities Act.
Commencing on May 20, 2019, the Company entered into a share repurchase program on the NASDAQ conducted in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934. The Company was authorized to repurchase up to 1,367,762 of its outstanding common shares, representing 5% of the outstanding common shares of Epsilon as of May 20, 2019, for an aggregate purchase price of not more than $5.0 million. The program ended on May 19, 2020, but Epsilon’s final repurchase under this program occurred on May 8, 2020.
Repurchases were made at management’s discretion from time to time through the facilities of the NASDAQ Global Market. The price paid for the common shares was, subject to applicable securities laws, the prevailing market price of such common shares on the NASDAQ Global Market at the time of such purchase. The Company funded the purchases out of available cash and did not incur debt to fund the share repurchase program.
Substantial Issuer Bid/Issuer Tender Offer
On May 14, 2020, the Company’s Board of Directors announced its intention to commence a substantial issuer bid/issuer tender offer to purchase for cash up to an aggregate of approximately $6.2 million of its common shares. In May 2020, upon the terms and subject to the conditions described in the Offer to Purchase dated May 19, 2020, as amended, the Company offered to repurchase up to 2,000,000 of its common shares for $3.06 per share, excluding taxes and interest, for a total cost of approximately $6.1 million, excluding expenses of the tender offer. As permitted under Rule 13e-4(f) and Rule 14e-1(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as stated in its Offer to Purchase, Epsilon was permitted to take up and pay for 2,000,000 Common Shares plus 2% of its issued and outstanding Common Shares, or an aggregate total of up to 2,522,673 Common Shares. The tender offer expired on June 30, 2020, and on July 6, 2020 the Company announced that it accepted 2,337,034 shares for repurchase under the terms of the Offer to Purchase for an aggregate consideration of $7,151,324, or $3.06 per share, excluding fees and expenses. The Company canceled all common shares taken up and paid for under the tender offer. The Company funded the repurchases under the tender offer with cash on hand.
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The following table contains information about our repurchase of equity securities during the year ended December 31, 2020:
Total number
Maximum number
of shares
of shares that
purchased as
may yet be
Total number
Average price
part of publicly
purchased under
of shares
paid per
announced plans
the plans or
purchased
share
or programs (4)
programs (5)
Beginning of normal-course issuer bid, May 20, 2019
—
1,367,762
Shares purchased through December 31, 2019 (1) (2)
696,096
$
3.72
January 2020 (2)
102,051
$
2.95
February 2020 (2)
261,519
$
3.11
March 2020 (2)
124,459
$
2.98
April 2020 (2)
156,585
$
2.48
May 2020 (2)
12,700
$
2.91
July 2020 (3)
2,337,034
$
3.06
2,337,034
—
Total as of December 31, 2020
3,690,444
$
3.16
2,337,034
—
(1) Shares purchased through December 31, 2019 were cancelled prior to the year ended December 31, 2019.
(2) Epsilon repurchased these shares under its share repurchase program that commenced on May 20, 2019, as described above.
(3) Epsilon repurchased these shares under its substantial issuer bid/issuer tender offer dated May 19, 2020, as described above.
(4) The Company announced its intention to commence a substantial issuer bid/issuer tender offer on May 14, 2020, and the substantial issuer bid/issuer tender offer commenced May 19, 2020, as described above.
(5) The normal-course issuer bid expired on May 19, 2020, and the substantial issuer bid/issuer tender offer expired on June 30, 2020.
ITEM 6. SELECTED FINANCIAL DATA.
The table below presents our selected historical consolidated financial data for the years ended December 31, 2020 and 2019. The selected historical consolidated financial data as of and for the years ended December 31, 2020 and 2019 have been derived from our audited consolidated financial statements, which have been audited by BDO USA, LLP, an independent registered public accounting firm. The selected historical consolidated financial data set forth below should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for such periods and our consolidated financial statements and related notes. Our consolidated financial
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statements included in this report have been prepared in accordance with United States generally accepted accounting principles, or GAAP.
Year ended December 31,
2020
2019
Income Statement Data
Revenues
$
24,425,280
$
26,690,336
Cost of revenues
8,482,220
7,908,803
Development geological and geophysical expenses
12,910
83,748
Depreciation, depletion, amortization and accretion
9,557,891
7,387,681
Impairment
1,760,000
—
Gain on sale of property
—
(1,375,000)
General and administrative expense
5,589,963
4,500,000
Income (loss) from operations
(977,704)
8,185,104
Other income
2,428,295
4,290,384
Income tax expense
575,420
3,777,489
Net income
$
875,171
$
8,697,999
Net income per share, basic
$
0.03
$
0.32
Net income per share, diluted
$
0.03
$
0.32
Weighted average number of shares outstanding, basic
25,122,501
27,129,430
Weighted average number of shares outstanding, diluted
25,122,501
27,129,430
As of December 31,
2020
2019
Balance Sheet Data
Cash and cash equivalents
$
13,270,913
$
14,052,417
Oil and gas properties
57,254,675
62,611,733
Gathering system properties
10,101,020
11,483,535
Total assets
86,676,184
97,669,203
Total long-term liabilities
13,146,361
13,807,341
Total shareholders’ equity (1)
69,019,443
76,362,994
(1) No cash dividends were declared or paid during the periods presented.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.