Nevada
(State or other jurisdiction of incorporation or organization)
|
26-0657736
(I.R.S. Employer Identification No.)
|
1658 Cole Boulevard
Building 6, Suite 210
Lakewood CO
(Address of principal executive offices)
|
80401
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
x
|
PART I – FINANCIAL INFORMATION
|
Page
|
|
ITEM 1
|
Financial Statements
|
3
|
ITEM 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
22
|
ITEM 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
27
|
ITEM 4
|
Controls and Procedures
|
27
|
PART II – OTHER INFORMATION
|
||
ITEM 1
|
Legal Proceedings
|
28
|
ITEM 1A
|
Risk Factors
|
28
|
ITEM 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
28
|
ITEM 3
|
Defaults Upon Senior Securities
|
28
|
ITEM 4
|
Mine Safety Disclosures
|
28
|
ITEM 5
|
Other Information
|
28
|
ITEM 6
|
Exhibits
|
28
|
PERSHING GOLD CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
(FORMERLY SAGEBRUSH GOLD LTD.)
|
||||||||||||||||||||
(AN EXPLORATION STAGE COMPANY)
|
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
For the Period from
Inception of
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
June 30, 2013
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||||
Net revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating expenses:
|
||||||||||||||||||||
Compensation and related taxes
|
1,439,412 | 8,320,213 | 3,073,655 | 14,810,946 | 23,882,483 | |||||||||||||||
Exploration cost
|
299,603 | 1,770,062 | 715,075 | 3,059,961 | 7,736,098 | |||||||||||||||
Consulting fees
|
437,080 | 685,949 | 782,613 | 1,604,573 | 8,688,089 | |||||||||||||||
General and administrative expenses
|
962,154 | 1,284,812 | 2,066,030 | 2,306,675 | 7,670,783 | |||||||||||||||
Total operating expenses
|
3,138,249 | 12,061,036 | 6,637,373 | 21,782,155 | 47,977,453 | |||||||||||||||
Operating loss from continuing operations
|
(3,138,249 | ) | (12,061,036 | ) | (6,637,373 | ) | (21,782,155 | ) | (47,977,453 | ) | ||||||||||
OTHER INCOME (EXPENSES):
|
||||||||||||||||||||
Other income
|
- | - | - | 80,000 | 80,000 | |||||||||||||||
Gain from sale of uranium assets pursuant to an option agreement
|
- | - | - | 930,000 | 930,000 | |||||||||||||||
Gain from sale of subsidiaries
|
- | 2,500,000 | - | 2,500,000 | 2,500,000 | |||||||||||||||
Loss from extinguishment of debts
|
- | - | - | (4,769,776 | ) | (4,769,776 | ) | |||||||||||||
Change in fair value of derivative liability
|
- | - | - | (1,454,889 | ) | 5,447,917 | ||||||||||||||
Loss from disposal of assets
|
- | (12,494 | ) | - | (21,928 | ) | (192,759 | ) | ||||||||||||
Warrant settlement expense
|
(45,484 | ) | (4,883,196 | ) | (45,484 | ) | (4,883,196 | ) | (9,727,680 | ) | ||||||||||
Realized gain - trading securities
|
- | - | - | 19,702 | 19,702 | |||||||||||||||
Realized gain - available for sale securities (see Note 4)
|
1,205,000 | 17,600 | 1,656,333 | 340,600 | 3,146,933 | |||||||||||||||
Share of loss of equity method investee
|
- | (83,333 | ) | - | (83,333 | ) | (83,333 | ) | ||||||||||||
Interest expense and other finance costs, net of interest income
|
(8,995 | ) | (8,356 | ) | (17,702 | ) | (11,338,774 | ) | (15,941,976 | ) | ||||||||||
Total other income (expenses) - net
|
1,150,521 | (2,469,779 | ) | 1,593,147 | (18,681,594 | ) | (18,590,972 | ) | ||||||||||||
Loss from continuing operations before provision for income taxes
|
(1,987,728 | ) | (14,530,815 | ) | (5,044,226 | ) | (40,463,749 | ) | (66,568,425 | ) | ||||||||||
Provision for income taxes
|
- | - | - | - | - | |||||||||||||||
Loss from continuing operations
|
(1,987,728 | ) | (14,530,815 | ) | (5,044,226 | ) | (40,463,749 | ) | (66,568,425 | ) | ||||||||||
Discontinued operations:
|
||||||||||||||||||||
(Loss) gain from discontinued operations, net of tax
|
- | (124 | ) | - | (50,298 | ) | 802,367 | |||||||||||||
Net loss
|
(1,987,728 | ) | (14,530,939 | ) | (5,044,226 | ) | (40,514,047 | ) | (65,766,058 | ) | ||||||||||
Less: Net loss (income) attributable to non-controlling interest
|
- | (1,770 | ) | - | (1,164 | ) | (172,517 | ) | ||||||||||||
Net loss attributable to Pershing Gold Corporation
|
(1,987,728 | ) | (14,532,709 | ) | (5,044,226 | ) | (40,515,211 | ) | (65,938,575 | ) | ||||||||||
Preferred deemed dividend
|
- | (1,086,000 | ) | - | (2,702,777 | ) | (5,987,173 | ) | ||||||||||||
Preferred stock dividends
|
- | (12,150 | ) | - | (21,150 | ) | (21,150 | ) | ||||||||||||
Net loss available to common stockholders
|
$ | (1,987,728 | ) | $ | (15,630,859 | ) | $ | (5,044,226 | ) | $ | (43,239,138 | ) | $ | (71,946,898 | ) | |||||
Loss per common share, basic and diluted:
|
||||||||||||||||||||
Loss from continuing operations
|
$ | (0.01 | ) | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.22 | ) | $ | (0.31 | ) | |||||
Loss from discontinued operations
|
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | 0.00 | |||||||||||
$ | (0.01 | ) | $ | (0.07 | ) | $ | (0.02 | ) | $ | (0.22 | ) | $ | (0.31 | ) | ||||||
WEIGHTED AVERAGE COMMON SHARES
|
||||||||||||||||||||
OUTSTANDING - Basic and Diluted
|
273,292,023 | 208,433,252 | 271,700,310 | 180,593,498 | 217,215,254 |
Level 1:
|
Observable inputs such as quoted market prices in active markets for identical assets or
liabilities
|
|
Level 2:
|
Observable market-based inputs or unobservable inputs that are corroborated by market data
|
|
Level 3:
|
Unobservable inputs for which there is little or no market data, which require the use of the
reporting entity’s own assumptions.
|
•
|
The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.
|
|
•
|
The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.
|
1.
|
Significant underperformance relative to expected historical or projected future operating results;
|
|
2.
|
Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
|
|
3.
|
Significant negative industry or economic trends.
|
Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Realized Gain from Sale of Securities
|
Fair Value
|
||||||||||||||||
Marketable securities – available for sale
|
—
|
—
|
—
|
1,656,333
|
—
|
|||||||||||||||
Total
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
1,656,333
|
$
|
—
|
June 30,
2013
|
December 31, 2012
|
|||||||||||
Relief Canyon Mine – Gold Acquisition
|
$
|
8,501,071
|
$
|
8,501,071
|
||||||||
Relief Canyon Mine – Newmont Leased Properties
|
7,709,441
|
7,709,441
|
||||||||||
Pershing Pass Property
|
576,400
|
576,400
|
||||||||||
$
|
16,786,912
|
$
|
16,786,912
|
Estimated Life
|
June 30,
2013
|
December 31, 2012
|
||||||||||
Furniture and fixtures
|
5 years
|
$
|
56,995
|
$
|
56,995
|
|||||||
Office and computer equipment
|
1 - 5 years
|
227,344
|
220,060
|
|||||||||
Land
|
—
|
266,977
|
266,977
|
|||||||||
Building and improvements
|
5 - 25 years
|
727,965
|
727,965
|
|||||||||
Site costs
|
10 years
|
1,272,732
|
1,272,732
|
|||||||||
Crushing system
|
20 years
|
2,256,943
|
2,256,943
|
|||||||||
Process plant and equipment
|
10 years
|
3,169,442
|
3,166,280
|
|||||||||
Vehicles and mining equipment
|
5 - 10 years
|
695,825
|
682,373
|
|||||||||
8,674,223
|
8,650,325
|
|||||||||||
Less: accumulated depreciation
|
(1,751,454
|
)
|
(1,263,549
|
)
|
||||||||
$
|
6,922,769
|
$
|
7,386,776
|
June 30, 2013
|
December 31, 2012
|
|||||||
Total notes payable
|
$
|
72,948
|
$
|
82,546
|
||||
Less: current portion
|
(23,036
|
)
|
(23,036
|
)
|
||||
Long term portion
|
$
|
49,912
|
$
|
59,510
|
Number of Options
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
||||||||||
Balance at December 31, 2012
|
35,298,000
|
$
|
0.46
|
9.11
|
||||||||
Granted
|
150,000
|
0.44
|
3.00
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Forfeited
|
(2,248,000
|
)
|
1.30
|
7.00
|
||||||||
Cancelled
|
-
|
-
|
-
|
|||||||||
Balance at June 30, 2013
|
33,200,000
|
0.40
|
8.71
|
|||||||||
Options exercisable at end of period
|
31,400,000
|
$
|
0.40
|
|||||||||
Options expected to vest through December 31, 2014
|
1,800,000
|
|||||||||||
Weighted average fair value of options granted during the period
|
$
|
0.25
|
|
Number of Warrants
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
|||||||||
Balance at December 31, 2012
|
16,255,779
|
$
|
0.54
|
2.42
|
||||||||
Granted
|
-
|
-
|
-
|
|||||||||
Cancelled
|
(3,446,748)
|
0.60
|
0.14
|
|||||||||
Forfeited
|
-
|
-
|
-
|
|||||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Balance at June 30, 2013
|
12,809,031
|
$
|
0.51
|
2.31
|
||||||||
Warrants exercisable at June 30, 2013
|
12,809,031
|
$
|
0.51
|
2.31
|
||||||||
Weighted average fair value of warrants granted during the period
|
$
|
-
|
For the Three Months ended
June 30, 2013
|
For the Three Months ended
June 30, 2012
|
For the Six
Months ended
June 30, 2013
|
For the Six Months ended June 30, 2012
|
|||||||||||||
Numerator:
|
||||||||||||||||
Loss from continuing operations
|
$ | (1,987,728 | ) | $ | (14,530,815 | ) | $ | (5,044,226 | ) | $ | (40,463,749 | ) | ||||
Loss from discontinued operations
|
$ | - | $ | (124 | ) | $ | - | $ | (50,298 | ) | ||||||
Denominator:
|
||||||||||||||||
Denominator for basic and diluted loss per share
|
||||||||||||||||
(weighted-average shares)
|
273,292,023 | 208,433,252 | 271,700,310 | 180,593,498 | ||||||||||||
Loss per common share, basic and diluted:
|
||||||||||||||||
Loss from continuing operations
|
$ | (0.01 | ) | $ | (0.07 | ) | $ | (0.02 | ) | $ | ( 0.22 | ) | ||||
Loss from discontinued operations
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
June 30, 2013
|
June 30, 2012
|
|||||||
Common stock equivalents:
|
||||||||
Stock options
|
33,200,000
|
34,848,000
|
||||||
Stock warrants
|
12,809,031
|
12,222,188
|
||||||
Convertible preferred stock
|
-
|
-
|
||||||
46,009,031
|
47,070,188
|
June 30, 2013
|
June 30, 2012
|
|||||||
Revenues
|
$
|
-
|
$
|
-
|
||||
Cost of sales
|
-
|
-
|
||||||
Gross profit (loss)
|
-
|
-
|
||||||
Operating and other non-operating expenses
|
-
|
(50,298
|
)
|
|||||
Loss from discontinued operations
|
-
|
(50,298
|
)
|
|||||
Gain from sale of sports and entertainment business
|
-
|
-
|
||||||
Loss from discontinued operations
|
$
|
-
|
$
|
(50,298
|
)
|
2013
|
$
|
22,705
|
||
2014
|
50,090
|
|||
2015 and thereafter
|
11,651
|
|||
$
|
84,446
|
|
·
|
We completed an in-house calculation of mineralized material at the Relief Canyon Mine that estimates 32,541,000 tons of gold mineralized material at an average grade of 0.017 ounces per ton gold ("opt Au"). The Company's in-house technical staff calculated the estimate under SEC Guide 7.
|
|
·
|
We performed detailed geological field mapping resulting in the identification of a new gold target in accordance with our objective of increasing the current estimate of mineralized material at Relief Canyon. Our exploration efforts have also included systematic reviews of the Relief Canyon historical database confirming significant gold-mineralized intercepts in at least two historic holes not currently included in our current estimate of mineralized material.
|
|
·
|
We located 105 new unpatented mining claims and acquired by lease roughly 635 acres of private lands at our Relief Canyon Project, adding about 2,600 total acres to our consolidated land position.
|
|
·
|
We sold the remaining 1,513,333 shares of Amicor common stock in a private transaction and generated net proceeds of $151,333. Additionally, we sold the 25,000,000 shares of Valor Gold common stock in private transactions and generated net proceeds of $1,505,000.
|
|
·
|
We completed the resale registration of approximately 76 million shares of our common stock held by Continental Resources Group, and those shares were distributed to Continental Resources Group shareholders of record on March 1, 2013.
|
|
·
|
In late July 2013 we started Phase I of our 2013 drilling program at the Relief Canyon Mine property, focused on expanding our current mineralized material estimate north of the North Pit and outside of our current mineralized material estimate boundary.
|
|
·
|
In August 2013, we completed a private placement to several accredited investors for the purchase of 9,091 shares of our Series E Convertible Preferred Stock (“Series E”) and warrants to acquire 10,909,200 shares of our common stock for aggregate net proceeds of approximately $9.0 million. Each share of Series E is convertible into shares of our common stock at a conversion price of $0.33 per share of common stock, subject to certain adjustments in the event of stock dividends, stock splits and subsequent equity sales. Each purchaser of Series E shares received a warrant to acquire a number of shares of Common Stock equal to 40% of the number of shares of common stock issuable upon conversion of the Series E shares. The warrants are exercisable immediately at an exercise price of $0.40 per share of common stock, subject to adjustments in the event of stock dividends, recapitalizations or certain other transactions and expire three years from the date of issuance. The purchase price of one share of Series E Preferred Stock and the associated warrant was $990.
|
|
·
|
In August 2013, in connection with the private placement, we exchanged 652 shares of Series E Convertible Preferred Stock and warrants to acquire 782,400 shares of our common stock for the outstanding principal and accrued interest of approximately $646,000 owed to Mr. Honig, one of our directors, pursuant to a Credit Facility Agreement and terminated that agreement.
|
·
|
Approximately $0.5 million on recommissioning the Relief Canyon gold processing facility;
|
·
|
Approximately $1.0 million on land holding and permitting costs for the Relief Canyon Properties;
|
·
|
Approximately $1.0 million on general and administrative expenses; and
|
·
|
Approximately $2.6 million on exploration and pre-development work at the Relief Canyon mine property, focused on further expansion of the deposit and a preliminary economic assessment.
|
ITEM 3
|
Defaults Upon Senior Securities
|
3.1
|
Certificate of Designation*
|
4.1
|
Form of Warrant Agreement*
|
10.1
|
Form of Subscription Agreement*
|
10.2
|
Registration Rights Agreement*
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer*
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer*
|
32.1
|
Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
32.2
|
Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
101.ins
|
XBRL Instance Document**
|
101.sch
|
XBRL Taxonomy Schema Document**
|
101.cal
|
XBRL Taxonomy Calculation Document**
|
101.def
|
XBRL Taxonomy Linkbase Document**
|
101.lab
|
XBRL Taxonomy Label Linkbase Document**
|
101.pre
|
XBRL Taxonomy Presentation Linkbase Document**
|
* Filed herein
|
Pershing Gold Corporation
|
|||
Date: August 14, 2013
|
By:
|
/s/ Stephen Alfers
|
|
Stephen Alfers
|
|||
President and Chief Executive Officer (Principal Executive Officer)
|
|||
Date: August 14, 2013
|
By:
|
/s/ Eric Alexander
|
|
Eric Alexander
|
|||
Vice President Finance and Controller (Principal Financial Officer)
|
SECTION 2.
|
Definitions
.
|
SECTION 4.
|
Voting; Approval Rights; Business Opportunities
.
|
SECTION 5.
|
Liquidation
.
|
SECTION 7.
|
Conversion
.
|
SECTION 8.
|
Reserved
.
|
SECTION 11.
|
Other Provisions
.
|
Date to Effect Conversion: _____________________________________________
|
|
Number of shares of Series E Preferred Stock owned prior to Conversion: ____________
|
|
Number of shares of Series E Preferred Stock to be Converted: ___________________
|
|
Stated Value of shares of Series E Preferred Stock to be Converted: ___________
|
|
Number of shares of Common Stock to be Issued: ___________________________
|
|
Applicable Conversion Price:____________________________________________
|
|
Number of shares of Series E Preferred Stock subsequent to Conversion: __________
|
|
Address for Delivery: ______________________
or
DWAC Instructions:
Broker no: _________
Account no: ___________
|
|
[HOLDER]
By:___________________________________
Name:
Title:
|
|
WARRANT
|
|
NO. [ ]
|
PERSHING GOLD CORPORATION
|
[ ]
Shares
August 8, 2013
|
1.
|
Exercise of Warrant
.
|
a.
|
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Issue Date and on or before the Expiration Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Warrant Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 1(b) below is specified in the applicable Notice of Exercise. Notwithstanding anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Stock available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total amount of Warrant Stock available hereunder shall have the effect of lowering the outstanding amount of Warrant Stock purchasable hereunder in an amount equal to the applicable amount of Warrant Stock purchased. The Holder and the Company shall maintain records showing the amount of Warrant Stock purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day of delivery of such notice.
The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Stock hereunder, the amount of Warrant Stock available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
|
b.
|
Cashless Exercise
. This Warrant may be exercised, in whole or in part, at any time by means of a “cashless exercise” (in lieu of making a payment upon such exercise) in which the Holder shall be entitled to receive a certificate for the number of shares of Warrant Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
|
c.
|
If exercised in part, the Company shall, as soon as practicable and in no event later than five (5) trading days after receipt of this Warrant (and the purchase price if applicable) and at its own expense, deliver to the Holder a new Warrant, identical in form, in the name of the Holder, evidencing the right to purchase the number of shares of Warrant Stock as to which this Warrant has not been exercised.
|
d.
|
No fractional shares of Common Stock will be issuable upon any exercise of this Warrant and the Holder will not be entitled to any cash payment or compensation in lieu of a fractional share of Common Stock.
|
e.
|
Reserved
.
|
f.
|
Mechanics of Exercise
.
|
2.
|
Disposition of Warrant Stock and Warrant
.
|
a.
|
The Holder hereby acknowledges that this Warrant and any Warrant Stock purchased pursuant hereto are, as of the date hereof, not registered under the Securities Act of 1933, as amended (the “
U.S. Securities Act
”) or under any applicable state securities law; and that the Company’s reliance on certain exemptions under the U.S. Securities Act and applicable state securities laws is predicated in part on the representations made by the Holder in Article IV of the Subscription Agreement.
|
b.
|
Any certificate representing Common Stock issued upon the exercise of this Warrant will bear a legend substantially similar to the following:
|
3.
|
Reservation of Shares
. The Company hereby agrees that at all times there shall be reserved for issuance upon the exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant. The Company further agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant will be duly authorized and will, upon issuance and against payment of the exercise price, be validly issued, fully paid and non-assessable, free from all taxes, liens, charges and preemptive rights with respect to the issuance thereof, other than taxes, if any, in respect of any transfer occurring contemporaneously with such issuance and other than transfer restrictions imposed by federal, state or other applicable securities laws.
|
4.
|
Exchange, Transfer or Assignment of Warrant
. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations, entitling the Holder or Holders thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled.
|
5.
|
Capital Adjustments
. This Warrant is subject to the following further provisions:
|
a.
|
Subdivision or Combination of Shares
. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the number of shares of Warrant Stock purchasable upon exercise of this Warrant and the Warrant Price shall be proportionately adjusted. Any adjustment under this Section 5(a) shall become effective at the close of business on the date the subdivision or combination becomes effective or, if earlier, the record date with respect to the subdivision or combination.
|
b.
|
Stock Dividends and Distributions
. If the Company at any time while this Warrant is outstanding and unexpired shall issue or pay the holders of its Common Stock, or take a record of the holders of its Common Stock for the purpose of entitling them to receive, a dividend payable in, or other distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in accordance with Section 5(e) and (ii) the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock that the Holder would have owned immediately following such action had this Warrant been exercised immediately prior thereto.
|
c.
|
Stock and Rights Offering to Shareholders
. If the Company shall at any time while this Warrant is outstanding distribute to all holders of its Common Stock any shares of capital stock of the Company (other than Common Stock) or evidences of its indebtedness or assets (excluding cash dividends or distributions) or rights or warrants to subscribe for or purchase any of its securities (excluding those referred to in the immediately preceding paragraph), or securities convertible or exchangeable into Common Stock (any of the foregoing, the “
Securities
”), then in each such case, the Company shall without regard to any Beneficial Ownership Limitation reserve shares or other units of such Securities for distribution to the Holder upon exercise of this Warrant so that, in addition to the shares of the Common Stock to which such Holder is entitled, such Holder will receive upon such exercise the amount and kind of such Securities which such Holder would have received if the Holder had, immediately prior to the record date for the distribution of the Securities, exercised this Warrant.
|
d.
|
Organic Change
. Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets to another person or entity or other transaction that is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as an “
Organic Change
.”
|
e.
|
Warrant Price Adjustment
. Except as otherwise provided herein, whenever the number of shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein provided, the Warrant Price payable upon the exercise of this Warrant shall be adjusted to that price determined by multiplying the Warrant Price immediately prior to such adjustment by a fraction (i) the numerator of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately prior to such adjustment, and (ii) the denominator of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately thereafter.
|
f.
|
Par Value
. Notwithstanding anything to the contrary contained in Section 5, if, as a result of an adjustment pursuant to Section 5, the par value per share of Common Stock would be greater than the Warrant Price, then the Warrant Price shall be an amount equal to the par value per share of the Common Stock but the number of shares the holder of this Warrant shall be entitled to purchase shall be such greater number of shares of Common Stock as would have resulted from the Warrant Price that, absent such limitation, would have been in effect pursuant to this Section 5.
|
g.
|
Certain Shares Excluded
. The number of shares of Common Stock outstanding at any given time for purposes of the adjustments set forth in this Section 5 shall exclude any shares then directly or indirectly held in the treasury of the Company.
|
h.
|
Deferral and Cumulation of De Minimis Adjustments
. The Company shall not be required to make any adjustment pursuant to this Section 5 if the amount of such adjustment would be less than one percent (1%) of the Warrant Price in effect immediately before the event that would otherwise have given rise to such adjustment. In such case, however, any adjustment that would otherwise have been required to be made shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than one percent (1%) of the Warrant Price in effect immediately before the event giving rise to such next subsequent adjustment.
|
i.
|
Duration of Adjustment
. Following each computation or readjustment as provided in this Section 5, the new adjusted Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant shall remain in effect until a further computation or readjustment thereof is required.
|
6.
|
Notice to Holders
.
|
a.
|
Notice of Record Date
. In case:
|
b.
|
Certificate of Adjustment
. Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company shall promptly make a certificate signed by its Chairman, Chief Executive Officer, President, Vice President, Chief Financial Officer or Treasurer, setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant after giving effect to such adjustment, and shall promptly cause copies of such certificates to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant.
|
7.
|
Loss, Theft, Destruction or Mutilation
. If this Warrant is lost, stolen, mutilated or destroyed, upon receipt by the Company, in the case of loss, theft or destruction, of an indemnity in customary form or, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof, without expense to the Holder, a new Warrant of like denomination and tenor dated the date hereof.
|
8.
|
Warrant Holder Not a Stockholder
. The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights whatsoever as a stockholder of the Company.
|
9.
|
Notices
.
|
|
(1)
|
if to the Company, to:
|
|
(2)
|
if to Holder to the address, email and facsimile number(s), and with such copies as indicated in the warrant register maintained by the Company.
|
10.
|
Choice of Law
. This Warrant and all disputes or controversies arising out of or relating to this Warrant or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of New York.
|
11.
|
Jurisdiction and Venue
. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Warrant brought by the other party or its successors or assigns shall be brought and determined in any New York State or federal court sitting in The City of New York (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), and each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Warrant and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in New York, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in New York as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Warrant or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in New York as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Warrant, or the subject matter hereof, may not be enforced in or by such courts.
|
12.
|
Amendment and Waiver
. Except as otherwise provided herein, the provisions of this Warrant and the other Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.
|
13.
|
Saturdays, Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
|
14.
|
Non-waiver and Expenses
. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Subscription Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
|
15.
|
Limitation of Liability
. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Stock, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
|
16.
|
Remedies
. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
|
17.
|
Successors and Assigns
. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Stock.
|
18.
|
Severability
. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
|
PERSHING GOLD CORPORATION
|
|||
By:
|
|
|
|
Name: Stephen D. Alfers
Title: President and CEO
|
TO:
|
Pershing Gold Corporation
|
1658 Cole Boulevard
Building 6 – Suite 210
Lakewood, Colorado 80401
Attn: Chief Executive Officer
|
Signature of Transferor
______________________________
______________________________
Address of Transferor
|
Number of shares of Preferred Stock Subscribed for: ____________ x $990
|
|
Aggregate Purchase Price: _____________________
|
|
Warrant to purchase ________________ Underlying Shares
(Number of shares of Preferred Stock x 1200)
|
Subsidiaries
|
Jurisdiction of Organization
|
Authorized Capital Stock
|
Outstanding Equity Interests
|
Record Ownership
|
Gold Acquisition Corp., a Nevada corporation
|
Nevada
|
100,000 authorized shares.
|
100,000 shares issued.
|
Pershing Gold Corp.
|
Pershing Royalty Company, a Delaware corporation
|
Delaware
|
1,000 authorized shares.
|
10 shares issued.
|
Pershing Gold Corp.
|
EXCX Funding Corp., a Nevada corporation
|
Nevada
|
3,000 authorized shares.
|
1,000 shares issued.
|
Pershing Gold Corp
|
“Holder”
|
|||
______________________________________
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
|||
___________________________________
|
|||
___________________________________
|
|||
___________________________________
|
|||
Telephone:__________________________
|
|||
Facsimile:___________________________
|
|||
Email:______________________________
|
|||
Telephone:
|
Fax:
|
Contact Person:
|
Beneficial Owner:
|
|||
By:
|
|||
Name:
Title:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
|
||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
||
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
Dated: August 14, 2013
|
By:
|
/s/ Stephen Alfers
|
|
Stephen Alfers
President and Chief Executive Officer (Principal Executive Officer)
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly for the period in which this quarterly report is being prepared;
|
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
Dated: August 14, 2013
|
By:
|
/s/ Eric Alexander
|
|||
Eric Alexander
Vice President Finance and Controller
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 14, 2013
|
/s/ Stephen Alfers
|
Stephen Alfers
President and Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 14, 2013
|
By:
|
/s/ Eric Alexander
|
Eric Alexander
Vice President Finance and Controller
(Principal Financial Officer)
|