| Entry into a Material Definitive Agreement |
Note 8: Entry into a Material Definitive Agreement
On June 13, 2016, the Company entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with its wholly owned subsidiary, Dataram Acquisition Sub, Inc. (“Acquisition
Sub”), a Nevada corporation, U.S. Gold Corp., a Nevada corporation and exploration stage company that owns certain mining
leases and other mineral rights comprising the Copper King gold and copper development project located in the Silver Crown Mining
District of southeast Wyoming and the Keystone Project located in Eureka county, Nevada, and Copper King, LLC (“Copper King”), a principal stockholder of U.S. Gold Corp (the
“Merger”). The closing of the Merger is subject to conditions
as defined in the Merger Agreement.
Pursuant to the terms and conditions of
the Merger Agreement, at the closing of the Merger, U.S. Gold Corp.’s outstanding common stock and preferred stock
will be converted into the right to receive shares of the Company’s common stock or, at the election of any U.S. Gold
Corp. stockholder, shares of the Company’s newly designated 0% Series C Convertible Preferred Stock, par value $0.001
per share, which are convertible into shares of common stock (the “Merger Consideration”). The Merger
Consideration shall be allocated as defined in the Merger Agreement.
On July 29, 2016, the Company, Acquisition Sub, U.S.
Gold Corp. and Copper King, amended and restated the Merger Agreement to reflect the reverse split of the Company’s issued
and outstanding common stock and to adjust certain aspects of the Merger Consideration and management consideration as defined
in the Merger Agreement, as amended.
On September 14, 2016, the Company, Acquisition Sub,
U.S. Gold Corp. and Copper King, amended and restated the Merger Agreement, as amended, to adjust certain aspects of the Merger
Consideration and revise other covenants of the Merger Agreement, as amended (the “Second Amended and Restated Agreement”).
The Second Amended and Restated Agreement among other
things:
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Increased the number of shares issuable to holders of U.S. Gold’s Series C Preferred Stock issued in connection with U.S. Gold’s private placement to 18,181,817 from 16,666,667 shares and increase the maximum number of warrants to purchase the Company’s common stock issuable to the placement agent in the Financing to 400,000 warrants from 250,000 warrants; |
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Reduced the number of Escrow Shares (as defined in the Merger Agreement) to be delivered and held in escrow to secure any claims that may arise with respect to the representations, warranties, covenants or indemnification obligations of Copper King LLC to 10% of the Company Stockholder Consideration (as defined in the Merger Agreement) from 15%; |
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Removed the delivery of a new preliminary economic report showing a lower economic value for the Copper King Project than the previously delivered preliminary economic report as a trigger for the release of any Escrow Shares (as defined in the Merger Agreement); |
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Included a covenant for the delivery by U.S. Gold of a
new economic report within one year of the closing of the merger; |
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Included the requirement for the Company to register the Merger Consideration on a Form S-4; |
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Included a covenant that certain officers and directors of the Company shall be issued an aggregate of 820,000 shares of restricted stock pursuant to a shareholder approved equity incentive plan, subject to the execution of a two year lockup agreement; and |
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Revised the maximum number of shares the Company shall have outstanding at the closing of the merger, on a fully diluted basis, to 4,559,178 shares of common stock. |
On November 28, 2016, the Company, Acquisition Sub,
U.S. Gold Corp. and Copper King, amended and restated the Merger Agreement, as amended, to adjust certain aspects of the Merger
Consideration and revise other covenants of the Merger Agreement, as amended (the “Third Amended and Restated Agreement”).
The Third Amended and Restated Agreement among other
things:
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Increased the Merger Consideration for U.S. Gold holders of record, in the aggregate and on an “as converted” and fully diluted basis, to 48,616,089 shares of common stock and equivalents from 46,241,868 shares of common stock and equivalents. This includes: |
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Reducing the number of shares issuable to holders of U.S. Gold’s Series C Preferred Stock issued in connection with U.S. Gold’s private placement to 18,094,362 from 18,181,817; |
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Increasing the maximum number of warrants to purchase the Company’s common stock issuable to the placement agent in the Financing to 1,809,436 five-year cashless warrants from 400,000 warrants; |
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Adding a provision to issue 925,833 five-year options which vest 1/24 each month over the 2 years from the original date of issue to the holders of options issued in connection with the closing of the Keystone Acquisition (as defined in the Merger Agreement); |
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Eliminated a covenant that certain officers and directors of the Company be issued an aggregate of 820,000 shares of restricted stock pursuant to a shareholder approved equity incentive plan, subject to the execution of a two year lockup agreement; and |
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Revised the maximum number of shares the Company shall have outstanding at the closing of the merger, on a fully diluted basis, to 4,945,182 shares of common stock. |
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