Item 1.01 Entry into a Material Definitive Agreement
On January 28, 2021, U.S. Gold Corp. (the "Company"), entered into a securities
purchase agreement (the "Purchase Agreement") with certain institutional and
accredited investors (the "Purchasers"), pursuant to which the Company agreed to
issue and sell in a registered direct offering (the "Offering") an aggregate of
914,136 shares (the "Shares") of common stock of the Company, par value $0.001
per share (the "Common Stock"), at an offering price of $10.54 per share, for
gross proceeds of approximately $9.6 million before the deduction of financial
advisory fees and offering expenses. The Shares are being offered by the Company
pursuant to a shelf registration statement on Form S-3 (File No. 333-239062),
which was initially filed with the Securities and Exchange Commission (the
"Commission") on June 9, 2020 and was declared effective by the Commission on
June 23, 2020 (the "Registration Statement"), and a related prospectus. The
Company currently intends to use these proceeds for working capital purposes.
In a concurrent private placement (the "Private Placement"), the Company agreed
to issue to the Purchasers, for each Share purchased in the Offering, a common
warrant to purchase one-half share of Common Stock (the "Common Warrants"). The
Common Warrants are exercisable six months following the date of issuance and
terminate five years following the initial exercise date. The Common Warrants
have an exercise price of $14.50 per whole share and are exercisable to purchase
an aggregate of up to 457,068 shares of Common Stock. A holder of a Common
Warrant will not have the right to exercise any portion of its warrants if the
holder, together with its affiliates, would beneficially own in excess of 4.99%
(or 9.99% at the election of the holder prior to the date of issuance) of the
number of shares of Common Stock outstanding immediately after giving effect to
such exercise (the "Beneficial Ownership Limitation"); provided, however, that
upon 61 days' prior notice to the Company, the holder may increase the
Beneficial Ownership Limitation, provided that in no event shall the Beneficial
Ownership Limitation exceed 9.99%.
The Common Warrants and the shares of Common Stock issuable upon the exercise of
the Common Warrants are not being registered under the Securities Act of 1933,
as amended (the "Securities Act"), are not being offered pursuant to the
Registration Statement, and are being offered pursuant to the exemption provided
in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated
thereunder and may be exercised cashlessly if the shares of Common Stock
underlying the Common Warrants are not registered.
Pursuant to the terms of the Purchase Agreement, the Company has agreed not to
issue, enter into any agreement to issue or announce the issuance or proposed
issuance of any shares of Common Stock or Common Stock equivalent for a period
of 60 days following the date of the Purchase Agreement. In addition, subject to
certain exceptions, the Company agreed not to effect or enter into an agreement
to effect any issuance of Common Stock or Common Stock equivalents involving a
variable rate transaction, as defined in the Purchase Agreement, until such time
as no Purchaser holds any of the Common Warrants.
The closing of the Offering and the Private Placement is subject to satisfaction
of customary closing conditions set forth in the Purchase Agreement and is
expected to occur on or around February 1, 2021. The representations, warranties
and covenants contained in the Purchase Agreement were made solely for the
benefit of the parties to the Purchase Agreement. In addition, such
representations, warranties and covenants (i) are intended as a way of
allocating the risk between the parties to the Purchase Agreement and not as
statements of fact, and (ii) may apply standards of materiality in a way that is
different from what may be viewed as material by stockholders of, or other
investors in, the Company. Accordingly, the Purchase Agreement is filed with
this report only to provide investors with information regarding the terms of
transaction, and not to provide investors with any other factual information
regarding the Company. Stockholders should not rely on the representations,
warranties and covenants or any descriptions thereof as characterizations of the
actual state of facts or condition of the Company. Moreover, information
concerning the subject matter of the representations and warranties may change
after the date of the Purchase Agreement, which subsequent information may or
may not be fully reflected in public disclosures.
On January 27, 2021, the Company entered into an amendment to that certain
engagement agreement ("Engagement Agreement Amendment") with Palladium Capital
Group, LLC ("Palladium"), dated March 29, 2020, in connection with the Offering
and the Private Placement, among other things. Pursuant to the Engagement
Agreement Amendment, the Company has agreed to pay Palladium a cash fee equal to
8% of the aggregate gross proceeds received by the Company in the Offering and
the Private Placement from investors introduced to the Company by Palladium. In
addition, the Company has agreed to issue to Palladium warrants to purchase up
to 23,245 shares of Common Stock (the "Palladium Warrants"). The Palladium
Warrants are identical in all material respects to the Common Warrants. Neither
the Palladium Warrants or the shares of Common Stock issuable upon the exercise
of the Palladium Warrants are being registered under the Securities Act, and are
being offered pursuant to the exemption provided in Section 4(a)(2) under the
Securities Act and Rule 506(b) promulgated thereunder. Palladium has represented
that it was an "accredited investor" (as defined by Rule 501 under the
Securities Act).
The description of terms and conditions of the Purchase Agreement and the Common
Warrants set forth herein do not purport to be complete and are qualified in
their entirety by the full text of the Purchase Agreement and the form of Common
Warrant, which are attached hereto as Exhibit 10.1 and Exhibit 4.1,
respectively, and both of which are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K in
relation to the Common Warrants, the shares of Common Stock issuable upon the
exercise of the Common Warrants, the Palladium Warrants and shares of Common
Stock issuable upon the exercise of the Palladium Warrants is incorporated
herein by reference.
Item 8.01 Other Events.
On January 28, 2021, U.S. Gold Corp. issued a press release regarding the
transaction described above under Item 1.01 of this Current Report on Form 8-K.
A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1 Form of Common Warrant.
10.1 Purchase Agreement.
99.1 Press Release, dated January 28, 2021.
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