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): July 1, 2020
MAGELLAN
GOLD CORPORATION
(Exact Name of Registrant as Specified in its Charter)
| Nevada | 333-174287 | 27-3566922 |
|
(State or other jurisdiction
of incorporation) |
Commission File
Number |
(I.R.S. Employer Identification number) |
2010A Harbison Dr., #312, Vacaville,
CA 95687
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code: 707-291-6198
______________________________________________________
(Former name or former address, if changed since last report)
| ___ | Written communications pursuant to Rule 425 under the Securities Act |
| ___ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| ___ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| ___ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
| N/A | N/A | N/A |
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 [X]
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. [_]
| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
Effective July 1, 2020, Magellan Gold Corporation, a Nevada corporation (the “Company”), executed a Stock Purchase Agreement with Tripower Resources, Inc. (“Tripower”) pursuant to which the Company sold 100% of the issued and outstanding stock of its wholly-owned subsidiary Gulf + Western Industries, Inc. (“GW”) in consideration of the surrender for cancellation of an aggregate of 50,000 shares of Series A Preferred Stock owned by John Gibbs, who is a control person of Tripower. GW owns a portfolio of mining claims comprising the Silver District Project in Arizona. A copy of the Agreement is filed herewith as Exhibit 10.1.
| ITEM 3.02 | UNREGISTERED SALE OF EQUITY SECURITIES |
The following sets forth the information required by Item 701 of Regulation S-K with respect to the unregistered sales of equity securities by Magellan Gold Corporation, a Nevada corporation (the "Company"):
1a. The Company and Michael Lavigne have executed a Restricted Stock Unit Agreement pursuant to which the Company agreed to grant to Mr. Lavigne, in consideration of services to be rendered as President and CEO, an aggregate of 15,000 restricted stock units for each month of service. The units are to be settled by the Company by the issuance of restricted Common Stock as more fully set forth in the Restricted Stock Unit Agreement. The Effective of the Restricted Stock Unit Agreement is August 1, 2020, a copy of which is filed herewith as Exhibit 10.2 hereto.
b. The units issuable under 1(a) above are in consideration of Mr. Lavinge’s services as an officer of the Company. Mr. Lavigne qualifies as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933 as amended (the "Securities Act"). The units issued will be “restricted securities” under the Securities Act of 1933, as amended and the certificate evidencing same bears the Company’s customary restrictive legend.
c. The Company paid no fees or commissions in connection with the issuance of the shares.
d. The securities issued under 1(a) above were issued without registration under the Securities Act in reliance upon an exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) thereunder.
e. Not applicable.
f. Not applicable.
| 2 |
| ITEM 5.02 | ELECTION OF DIRECTORS AND DEPARTURE AND ELECTION OF EXECUTIVE OFFICERS. |
Mr. John Power has tendered his resignation as President of the Company effective August 1, 2020. He will continue to serve as Chief Financial Officer and a member of the Board of Directors.
Effective August 1, 2020, the Board of Directors (the “Board”) of the Company increased the number of directors from three to four and appointed Michael Lavigne to serve as a member of the Board. Mr. Lavigne was also elected to serve the Company as President and CEO, filling the vacancies created by Mr. Power’s resignation.
The following is biographical information for Mr. Lavigne:
Michael Lavigne has served as the CEO and a board member of Silver Verde May Mining Company, Inc. from December 2008 to the present. Silver Verde May, an exploration stage mining company located in Wallace, Idaho, holds a number of properties in Idaho, Utah and Wyoming. From August 2008, Mr. Lavigne served as a consultant for Golden Eagle Mining Company, which was acquired by Silver Verde May in December 2008. Mr. Lavigne also serves on the board of Mascot Mining which holds properties in Idaho and Montana and served on the board of WestMountain Gold Inc. from August 2011 until January 2016.
Mr. Lavigne is the owner and Managing Partner of Capital Peak Partners, LLC. Capital Peak provides consulting services in the area of corporate and business development and has provided consulting services to a number of mining and exploration stage companies. Capital Peak Partners was founded in September of 2010.
Previously Mr. Lavigne held a number of positions in the travel and hospitality industry. From November 2006 to July 2008, Mr. Lavigne founded and served as a director and CEO of Travel Services Group. From September 2003 to October 2006, Mr. Lavigne was the COO of Glacier Bay Cruise Lines, an adventure cruise in South East Alaska. Mr. Lavigne was a director of Coastal Hotel Group, a partner in NorthCoast Hotels and a member of Starwood Hotel’s Leisure Travel Advisory Board. Also, Mr. Lavigne was the CEO and chairman of Global Leisure, Inc., the parent company of Maupin Tours, Sunmakers, Jet Set North America, Hawaii Leisure and Regency Pacific.
Prior to the travel and hospitality business Mr. Lavigne was involved in the securities and corporate finance business and served as the managing Director of Northwest Capital and Advisory Services and the CEO and chairman of RCL Northwest. Mr. Lavigne was a board member of the Spokane Stock Exchange, a registered national securities exchange which listed primarily mining and resources related companies.
Mr. Lavigne received his BA in Accounting from the University of Idaho and a JD from Gonzaga University School of Law.
The Company has agreed to compensate Mr. Lavigne as follows:
The Company and Mr. Lavigne have entered into a Restricted Stock Unit Agreement effective August 1, 2020, in consideration of services to be rendered by Mr. Lavigne as an executive officer of the Company as more fully described in Item 3.02 above.
| 3 |
ITEM 9.01: EXHIBITS AND FINANCIAL STATEMENTS
| (a) | Financial Statements |
None.
| (b) | Pro Forma Financial Information |
Filed herewith are Pro Forma Balance Sheet giving effect to (i) the sale of the Company’s interest in Magellan Acquisition Corporation and Minerales Vane 2 S.A. de C.V. as previously reported in the Company’s Current Report on Form 8-K dated March 31, 2020 as filed with the Commission on May 6, 2020 and (ii) the sale of 100% of the issued and outstanding shares of Gulf + Western Industries, Inc. to Tripower Resources, Inc. in consideration of the surrender for cancellation of an aggregate of 50,000 shares of Series A Convertible Preferred Stock of the Company owned by John Gibbs, the controlling person of Tripower Resources, Inc., as if both of those dispositions had occurred effective March 31, 2020.
Magellan Gold Corp.
Pro Forma Balance Sheet
As of March 31, 2020
| MAC/MVO/MV2 | Gulf + Western Industries, Inc. | |||||||||||||||
| Magellan Gold | Pro Forma | Pro Forma | ||||||||||||||
| Corp | Adjustments | Adjustments | Pro Forma | |||||||||||||
| ASSETS | ||||||||||||||||
| Cash and cash equivalents | $ | 537 | $ | – | $ | – | $ | 537 | ||||||||
| Prepaid expenses and other current assets | 5,417 | – | – | 5,417 | ||||||||||||
| Total current assets | 5,954 | – | – | 5,954 | ||||||||||||
| Total assets | $ | 5,954 | $ | – | $ | – | $ | 5,954 | ||||||||
| LIABILITIES | ||||||||||||||||
| Accounts payable | $ | 107,730 | $ | – | $ | (3,444 | ) | $ | 104,286 | |||||||
| Accounts payable - related party | 30,000 | – | – | 30,000 | ||||||||||||
| Accrued liabilities | 365,598 | – | – | 365,598 | ||||||||||||
| Convertible note payable | 407,766 | – | – | 407,766 | ||||||||||||
| Accrued interest - related parties | 752 | – | – | 752 | ||||||||||||
| Accrued interest | 36,798 | – | – | 36,798 | ||||||||||||
| Advances payable, related party | 152,403 | – | – | 152,403 | ||||||||||||
| Advances payable, third party | 42,500 | – | – | 42,500 | ||||||||||||
| Total current liabilities | 1,143,547 | – | (3,444 | ) | 1,140,103 | |||||||||||
| Total liabilities | 1,143,547 | – | (3,444 | ) | 1,140,103 | |||||||||||
| EQUITY | ||||||||||||||||
| Preferred stock | 2,422,690 | – | (500,000 | ) | 1,922,690 | |||||||||||
| Common stock | 3,651 | – | – | 3,651 | ||||||||||||
| Additional paid in capital | 8,672,939 | – | 503,444 | 9,176,383 | ||||||||||||
| Accumulated other comprehensive loss | – | – | – | – | ||||||||||||
| Accumulated deficit | (12,236,873 | ) | – | – | (12,236,873 | ) | ||||||||||
| Total equity | (1,137,593 | ) | – | 3,444 | (1,134,149 | ) | ||||||||||
| Total liabilities and equity | $ | 5,954 | $ | – | $ | – | $ | 5,954 | ||||||||
| 4 |
Magellan Gold Corp.
Pro Forma Statement of Operations
For the year ended December 31, 2019
| MAC/MVO/MV2 | Gulf + Western Industries, Inc. | |||||||||||||||
| Magellan Gold | Pro Forma | Pro Forma | ||||||||||||||
| Corp | Adjustments | Adjustments | Pro Forma | |||||||||||||
| Revenues, net | $ | 32,500 | $ | (32,500 | ) | $ | – | $ | – | |||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of sales | 286,085 | (286,085 | ) | – | – | |||||||||||
| Exploration costs | 10,000 | – | (10,000 | ) | – | |||||||||||
| General and administrative expenses | 1,082,797 | (64,763 | ) | (9,118 | ) | 1,008,916 | ||||||||||
| Depreciation and amortization | 122,348 | (122,348 | ) | – | – | |||||||||||
| Total operating costs and expenses | 1,501,230 | (473,196 | ) | (19,118 | ) | 1,008,916 | ||||||||||
| Loss from continuing operations | (1,468,730 | ) | 440,696 | 19,118 | (1,008,916 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (526,273 | ) | – | – | (526,273 | ) | ||||||||||
| Foreign currency exchange loss | (1,940 | ) | 1,940 | – | – | |||||||||||
| Loss on extinguishment of debt | (3,151,314 | ) | – | – | (3,151,314 | ) | ||||||||||
| Change in fair value | 12,457 | – | – | 12,457 | ||||||||||||
| Total other income (expense) | (3,667,070 | ) | 1,940 | – | (3,665,130 | ) | ||||||||||
| Net loss | (5,135,800 | ) | 442,636 | 19,118 | (4,674,046 | ) | ||||||||||
| Series A preferred stock dividend | (60,401 | ) | – | – | (60,401 | ) | ||||||||||
| Net loss attributable to common shareholders | (5,196,201 | ) | 442,636 | 19,118 | (4,734,447 | ) | ||||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation | 68,636 | – | – | 68,636 | ||||||||||||
| Net comprehensive loss | $ | (5,127,565 | ) | $ | 442,636 | $ | 19,118 | $ | (4,665,811 | ) | ||||||
| Net loss per common share | ||||||||||||||||
| Basic and diluted net loss per share | $ | (1.46 | ) | $ | (1.28 | ) | ||||||||||
| Weighted Average Shares Outstanding | ||||||||||||||||
| Basic | 3,554,396 | 3,651,042 | ||||||||||||||
| Diluted | 3,554,396 | 3,651,042 | ||||||||||||||
| 5 |
Magellan Gold Corp.
Pro Forma Statement of Operations
For the three months ended March 31, 2020
| MAC/MVO/MV2 | Gulf + Western Industries, Inc. | |||||||||||||||
| Magellan Gold | Pro Forma | Pro Forma | ||||||||||||||
| Corp | Adjustments | Adjustments | Pro Forma | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative expenses | $ | 169,985 | $ | – | $ | (1,000 | ) | $ | 168,985 | |||||||
| Total operating costs and expenses | 169,985 | – | (1,000 | ) | 168,985 | |||||||||||
| Loss from continuing operations | 169,985 | – | (1,000 | ) | 168,985 | |||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (74,732 | ) | – | – | (74,732 | ) | ||||||||||
| Change in fair value | – | – | – | – | ||||||||||||
| Total other income (expense) | (74,732 | ) | – | – | (74,732 | ) | ||||||||||
| Net loss from continuing operations | (244,717 | ) | – | 1,000 | (243,717 | ) | ||||||||||
| Net loss from discontinuing operations | (29,693 | ) | (29,693 | ) | – | (59,386 | ) | |||||||||
| Net loss | (274,410 | ) | (29,693 | ) | 1,000 | (303,103 | ) | |||||||||
| Series A preferred stock dividend | (59,738 | ) | – | – | – | |||||||||||
| Net loss attributable to common shareholders | (334,148 | ) | (29,693 | ) | 1,000 | (303,103 | ) | |||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation | 68,636 | – | – | 68,636 | ||||||||||||
| Net comprehensive loss | $ | (265,512 | ) | $ | (29,693 | ) | $ | 1,000 | $ | (234,467 | ) | |||||
| Net loss per common share | ||||||||||||||||
| Continuing operations | $ | (0.07 | ) | $ | (0.07 | ) | ||||||||||
| Discontinued operations | $ | (0.01 | ) | $ | (0.02 | ) | ||||||||||
| Net loss attributable to common shareholders | $ | (0.08 | ) | $ | (0.08 | ) | ||||||||||
| Weighted Average Shares Outstanding | ||||||||||||||||
| Basic | 3,651,042 | 3,651,042 | ||||||||||||||
| Diluted | 3,651,042 | 3,651,042 |
| 6 |
Magellan Gold Corp.
Pro Forma Statement of Operations
For the three months ended March 31, 2019
| MAC/MVO/MV2 | Gulf + Western Industries, Inc. | |||||||||||||||
| Magellan Gold | Pro Forma | Pro Forma | ||||||||||||||
| Corp | Adjustments | Adjustments | Pro Forma | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| General and administrative expenses | $ | 156,660 | $ | – | $ | (700 | ) | $ | 155,960 | |||||||
| Total operating costs and expenses | 156,660 | – | (700 | ) | 155,960 | |||||||||||
| Loss from continuing operations | 156,660 | – | (700 | ) | 155,960 | |||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (74,005 | ) | – | – | (74,005 | ) | ||||||||||
| Change in fair value | 1,466 | – | – | 1,466 | ||||||||||||
| Total other income (expense) | (72,539 | ) | – | – | (72,539 | ) | ||||||||||
| Net loss from continuing operations | (229,199 | ) | – | 700 | (228,499 | ) | ||||||||||
| Net loss from discontinuing operations | (107,692 | ) | 107,692 | – | – | |||||||||||
| Net loss attributable to common shareholders | (336,891 | ) | 107,692 | 700 | (228,499 | ) | ||||||||||
| Other comprehensive income | ||||||||||||||||
| Foreign currency translation | 10,217 | – | – | 10,217 | ||||||||||||
| Net comprehensive loss | $ | (326,674 | ) | $ | 107,692 | $ | 700 | $ | (218,282 | ) | ||||||
| Net loss per common share | ||||||||||||||||
| Continuing operations | $ | (0.07 | ) | $ | (0.07 | ) | ||||||||||
| Discontinued operations | $ | (0.03 | ) | $ | – | |||||||||||
| Net loss attributable to common shareholders | $ | (0.10 | ) | $ | (0.07 | ) | ||||||||||
| Weighted Average Shares Outstanding | ||||||||||||||||
| Basic | 3,398,705 | 3,398,705 | ||||||||||||||
| Diluted | 3,398,705 | 3,398,705 | ||||||||||||||
| 7 |
| (c) | Exhibits |
| Item | Title | |
| 10.1 | Stock Purchase Agreement | |
| 10.2 | Restricted Stock Unit Agreement | |
| 8 |
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 thereunto duly authorized.
| Magellan Gold Corporation | |
| Date: July 29, 2020 |
By: /s/ John Power John Power, President |
| 9 |
Exhibit 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is entered into effective as of the 1st day of July, 2020 (the “Closing Date”), by and between MAGELLAN GOLD CORPORATION, a Nevada corporation (the “Seller”), and TRIPOWER RESOURCES, INC. (the “Buyer”).
RECITALS
A. Seller owns 1,000 shares representing 100% of the issued and outstanding shares of Gulf+Western Industries, Inc., a Nevada corporation (the G+W Shares) and desires to sell, assign and transfer to the Buyer, the G+W Shares.
B. The Buyer desires to purchase the G+W Shares owned by Seller in exchange for 50,000 shares of Series A Preferred Stock of Seller, currently registered in the name of Buyer (the “MAGE Shares”) subject to the terms and conditions set forth below.
C. Currently the Seller and Buyer are parties to that certain Stock Pledge Agreement dated December 31, 2014 (the “Pledge Agreement”), pursuant to which the Seller has pledged to Buyer, the G+W Shares as collateral under the terms of a Credit Agreement dated December 31, 2012, as amended (the “Credit Agreement”).
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinbelow set forth, the parties agree as follows:
1. Purchase of G+W Shares. Subject to the terms and conditions hereinafter set forth, on the Closing Date (as hereinafter defined) Seller shall sell, assign, transfer and deliver to the Buyer, and the Buyer shall purchase from Seller , the G+W Shares against delivery to Seller of the MAGE Shares. Simultaneously Buyer and Seller shall each deliver to the other on the Closing Date a Stock Power in proper form for transfer assigning the G+W Shares from Seller to Buyer and assigning the MAGE Shares from Buyer to Seller.
2. Termination of Stock Pledge Agreement. Concurrently with the purchase of the G+W Shares, the Pledge Agreement shall automatically terminate and be considered null and void.
3. Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as follows:
(a) This Agreement and all documents required hereby to be executed by the Company are and shall be valid, legally binding obligations of and enforceable against the Company and the Buyers in accordance with their terms.
(b) The execution and delivery of this Agreement by the Company, and the consummation by the Company of the transactions contemplated herein, will not constitute a violation, breach, or default under any statute, ordinance, court order, agreement, law, regulation or undertaking applicable to the Company. No third-party consents, authorizations or approvals are necessary in connection with the execution, delivery and performance of this Agreement by the Company.
(c) No action, proceeding, investigation or claim is pending or, to the Company’s knowledge, threatened against the Company in connection with the transactions contemplated by this Agreement.
(d) Seller is the sole owner of the G+W Shares and there are no restrictions upon the transfer of any of the G+W Shares, other than contained in the Pledge Agreeement, may appear on the face of the certificate(s), and other than on account of federal and state securities laws. Except for the foregoing, Seller is the true and lawful beneficial owner of the Shares, free of any claims, liens, or encumbrances, and Seller has the right to transfer such G+W Shares except as may hereinabove be expressly provided.
| 1 |
(e) Gulf + Western Industries, Inc. currently holds the mineral interests listed on Schedule A attached hereto and will continue to hold such interests following the purchase and sale of the G+W Shares.
4. Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller as that there are no restrictions upon the transfer of the MAGE Shares, other than may appear on the face of the certificates and other than on account of federal and state securities laws. Except for the foregoing, Buyer is the true and lawful beneficial owner of the MAGE Shares, free of any claims, liens, or encumbrances, and Buyer has the right to transfer such MAGE Shares except as may hereinabove be expressly provided.
5. Agreements of Seller and Buyer. Seller and Buyer each agree that in entering into this transaction, neither party is relying upon any statement by the other party as to the value of the G+W Shares and/or the MAGE Shares; and each party assumes all risks in entering into this transaction.
6. Right of First Refusal. Seller hereby grants to Buyer a right of first refusal (“ROFR”) to purchase any and all shares of Common Stock or Common Stock Equivalents of Seller in the event Seller offers for sale any Common Stock or Common Stock Equivalent at a price per share or effective price per share less than $0.50 per share. Should the Seller propose to undertake a sale of its Common Stock or Common Stock Equivalent at a price that would trigger Buyer’s ROFR, the Seller shall provide Buyer with written notice of such proposed sale; whereupon the Buyer shall have a period of thirty (30) days to exercise his ROFR by tendering notice of such exercise together with payment of the aggregate price therefor. The ROFR can be exercised by Buyer with respect to all the securities being offered or any portion thereof. The ROFR granted pursuant to this paragraph 6 shall expire on May 31, 2021. For the purposes hereof, “Common Stock Equivalent” shall mean any debt or equity security exercisable to purchase or convertible into shares of the Seller’s Common Stock.
7. Attorney's Fees for Claims. In the event that a claim is brought by one party hereto against the other party hereto for breach of any provision hereof or otherwise arising out of the transaction to which this Agreement relates, the prevailing party shall be entitled to payment or reimbursement of the expenses incurred by it in connection with the litigation or the portion thereof as to which it prevails, including but not limited to, attorneys' fees and costs.
8. Waiver. Any of the terms or conditions of this Agreement may be waived at any time and from time to time in writing by the party entitled to the benefits thereof without affecting any other terms or conditions of this Agreement. The waiver by any party hereto of any condition or breach of any provision of this Agreement shall not operate as a waiver of any other condition or other or subsequent breach.
9. Amendment. This Agreement may be amended or modified only by a written instrument executed by the parties hereto.
10. Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties in respect of the transactions contemplated hereby and supersedes all prior agreements, arrangements and understandings, oral or written, relating to the subject matter hereof. No representation, promise, inducement or statement of intention has been made by either party which is not embodied in this Agreement and no party shall be bound by or liable for any alleged representation, promise, inducement or statement of intention not so set forth.
11. Survival of Representations, Warranties and Agreements. All representations and warranties contained in this Agreement shall survive the consummation of the transaction contemplated hereby. All agreements and covenants contained in this Agreement not fully performed as of the Closing Date shall survive the Closing Date and continue thereafter until fully performed or until the time for further performance has expired.
12. Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.
| 2 |
13. Third Party Beneficiaries. Each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any person other than the parties hereto.
14. Fax/Counterparts. This Agreement may be executed by telex, telecopy or other facsimile transmission, and may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one agreement.
15. Litigation. Any litigation commenced which is based in whole or in part upon claims under or in connection with this Agreement or the transaction contemplated hereby shall be brought in a court of competent jurisdiction (state or federal) in the United States of America.
16. General. This Agreement shall be construed and enforced in accordance with the laws of the State of Colorado, may not be transferred or assigned by any party hereto, other than by operation of law, and shall inure to the benefit of and be binding upon each of the parties hereto and their respective successors and assigns; and may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement as of the date and year first above written.
| MAGELLAN GOLD CORPORATION | |
| a Nevada Corporation | |
| By: /s/ John Power | |
| Name: John Power | |
| Title: President | |
| TRIPOWER RESOURCES, INC. | |
| By: /s/ John Gibbs | |
| John Gibbs, President | |
| 3 |
Exhibit 10.2
MAGELLAN GOLD CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
To MICHAEL LAVIGNE:
MAGELLAN GOLD CORPORATION, a Nevada corporation (the “Company”), has granted you an award (this “Award”) of restricted stock units (the “Stock Units”) under the Magellan Gold Corporation Deferred Compensation and Equity Award Plan, as amended from time to time (the “Plan”), conditioned upon your agreement to the terms and conditions described below. Each Stock Unit represents an unfunded promise by the Company to issue to you, upon a specified future event, one share of the Company’s common stock, $0.001 par value (the “Common Stock”). The effective date of grant will be August 1, 2020 (the “Grant Date”), subject to your promptly signing and returning a copy of this Agreement (as defined below) to the Company. The Award has been made in fulfillment of:
| i. | ¨ your election under the Plan to defer receipt of your Annual Retainer payment that was otherwise payable in cash on the Grant Date. |
| ii. | ☒ your election under the Plan to receive your Equity Grant in the form of Restricted Stock Units. |
This Agreement (the “Agreement”) evidences the Award of the Stock Units. The Award is subject in all respects to and incorporates by reference the terms and conditions of the Plan and the Magellan Gold Corporation 2017 Equity Incentive Plan, as amended from time to time (the “EIP”). By executing this Agreement, you acknowledge that you have received a copy of the Plan. This Agreement and the Award of the Stock Units are made in consideration of your service as CEO, President and a member of the Board of Directors of the Company.
| 1. | Terminology; Conflicts. The Glossary at the end of this Agreement includes definitions of capitalized words used in this Agreement. Unless otherwise specifically provided in this Agreement, in the event of any conflict, ambiguity or inconsistency between or among any defined term in this Agreement, the Plan or the EIP, the provisions of, first, the Plan, second, the EIP, and lastly, this Agreement, will control in that order of priority. |
2. Terms and Conditions of this Award. The following terms and conditions will apply:
| (a) | Terms of Stock Unit Grants. You will be entitled to receive, and we agree to grant to you, an aggregate of 15,000 Stock Units (subject to adjustment as provided for herein) for each completed calendar month that you are performing services for the Company in any capacity. The grants will continue on a month to month basis provided you continue to provide services to the Company and may be terminated for any reason by either the Company or yourself, with or without cause, upon ten (10) days’ prior written notice. |
| (b) | Credit to Bookkeeping Account. The Stock Units shall be credited to a bookkeeping account maintained by the Company on your behalf (“Account”) as of the Grant Date. The crediting of the Stock Units to your Account will not entitle you to voting or other rights as a stockholder until shares of Common Stock are issued upon settlement, but will entitle you to receive Dividend Equivalents. |
| 1 |
| (c) | Settlement. |
| i. | Issuance of Shares of Common Stock. Vested Stock Units will be settled in shares of Common Stock upon or as soon as practicable (A) upon your written request any time after December 31, 2020 or (B) following your Termination Date, whichever occurs first. Upon settlement, subject to Section 2(d)(iv) of this Agreement, the Company shall issue to you, or your estate as applicable, a number of shares of Common Stock equal to the number of vested Stock Units credited to your Account on your Termination Date, taking into account the provisions of Section 2(c) of this Agreement. Notwithstanding anything in the Plan or in this Agreement to the contrary, upon the occurrence of a Change in Control Event, all Stock Units then credited to your Account will be settled and paid out to you on or as soon as practicable after the occurrence of the Change in Control Event, in accordance with the provisions of Code section 409A. |
| ii. | Registration of Shares. The shares of Common Stock issued in settlement of the Stock Units shall be registered in your name, or, if applicable, in the names of your heirs. In the Company’s discretion, such shares may be issued either in certificated form or in uncertificated, book entry form. The certificate or book entry account shall bear such restrictive legends or restrictions as the Company, in its sole discretion, shall require. |
| iii. | Restrictions on Grant of Stock Units and Issuance of Shares of Common Stock. The grant of the Stock Units and issuance of shares of Common Stock upon settlement of the Stock Units will be subject to and in compliance with all applicable requirements of federal, state or foreign law with respect to such securities. No shares of Common Stock may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Stock Units shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained. As a condition to the settlement of the Stock Units, the Company may require you to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. |
| iv. | Fractional Shares. The Company will not be required to issue fractional shares of Common Stock upon settlement of the Stock Units. |
| (f) | Dividend Equivalents. If the Company declares a cash dividend payable to the holders of its Common Stock, as of the payment date for each cash dividend, your Account will be credited with dividend equivalents in the form of additional Stock Units, which shall be fully vested and nonforfeitable when credited and shall otherwise be subject to the same terms and conditions as the Stock Units granted pursuant to this Agreement. The number of additional Stock Units credited to your Account shall be equal to the quotient, rounded down to the nearest whole share, determined by dividing (i) the product of (A) the amount of cash dividend per share of Common Stock multiplied by (B) the number of whole Stock Units credited to your Account as of the record date of the cash dividend, by (ii) the Fair Market Value of a share of Common Stock on the payment date of the dividend. |
| 3. | Restrictions on Transfer. Prior to settlement, you may not sell, assign, transfer, pledge, hypothecate, encumber or dispose of in any way (whether by operation of law or otherwise) any Stock Units, and Stock Units may not be subject to execution, attachment or similar process. The Company will not be required to recognize on its books any action taken in contravention of these restrictions. |
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| 4. | Legends. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Common Stock issued pursuant to this Agreement. You will, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to this Agreement in your possession in order to carry out the provisions of this Section. |
| 5. | Tax Withholding. The Company is required to, and the Company will, deduct from any compensation or any other payment of any kind due you the amount of any federal, state, local or foreign taxes required to be paid by you as a result of the grant, vesting or settlement of the Stock Units in whole or in part. Notwithstanding, you expressly acknowledge that you are solely responsible for the payment of any such federal, state, local or foreign taxes, and you may not rely on the Company for any assistance with regard to withholding or paying such taxes. |
| 6. | Adjustments for Corporate Transactions and Other Events. |
| (a) | Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, the number and class of securities subject to the Stock Units will, without further action of the Committee, be adjusted to reflect such event. The Committee may make adjustments, in its discretion, to address the treatment of fractional shares with respect to the Stock Units as a result of the stock dividend, stock split or reverse stock split. Adjustments under this Section 6 will be made by the Committee, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive. |
| (b) | Binding Nature of Agreement. The terms and conditions of this Agreement will apply with equal force to any additional and/or substitute rights to receive securities received by you in exchange for, or by virtue of your ownership of, the Stock Units, whether as a result of any spin-off, stock split-up, stock dividend, stock distribution, other reclassification of the Common Stock of the Company, or other similar event, except as otherwise determined by the Committee. If the Stock Units are converted into or exchanged for, or stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, rights to receive securities of another entity, or other property (including cash), then the rights of the Company under this Agreement will inure to the benefit of the Company’s successor, and this Agreement will apply to the rights to receive securities or other property received upon such conversion, exchange or distribution in the same manner and to the same extent as the Stock Units. |
| 7. | Non-Guarantee of Service Relationship. Nothing in the Plan, the EIP or this Agreement alters your service relationship with the Company or shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain you as an officer, director or key employee for any period of time. This Agreement is not to be construed as a contract of service relationship between the Company and you. This Agreement does not limit in any way the possibility of your separation from the Company in accordance with the By-Law provisions in effect at the relevant time, whether or not such removal results in the forfeiture of any Award Shares or any other adverse effect on your interests under the Plan. |
| 8. | Rights as Stockholder. You shall not have any of the rights of a stockholder with respect to any shares of Common Stock that may be issued in settlement of the Stock Units until such shares of Common Stock have been issued to you upon settlement of the Stock Units. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate or certificates are issued, except as provided in Sections 2(e) and 6 of this Agreement. |
| 9. | The Company’s Rights. The existence of the Stock Units does not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, including that of its subsidiaries, or any merger or consolidation of the Company or any Affiliate, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company or any Affiliate, or any sale or transfer of all or any part of the Company’s or any Affiliate’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. |
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| 10. | Entire Agreement. This Agreement, inclusive of the Plan and the EIP incorporated into this Agreement, contains the entire agreement between you and the Company with respect to the Stock Units. Any and all existing oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement by any person with respect to the Award or the Stock Units are superseded by this Agreement and are void and ineffective for all purposes. |
| 11. | Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan and the EIP. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan or the EIP, as applicable, will govern. |
| 12. | Amendment. This Agreement may be amended from time to time by the Committee in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the Stock Units as determined in the discretion of the Committee, except as provided in the Plan, the EIP or in any other written document signed by you and the Company. |
| 13. | Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Committee relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, will be determined exclusively in accordance with the laws of the State of Colorado, without regard to its provisions concerning the applicability of laws of other jurisdictions. Any suit with respect to the Award or the Stock Units will be brought in the federal or state courts in the districts which include Denver, Colorado, and you agree and submit to the personal jurisdiction and venue thereof. |
| 14. | Unfunded Status. The Stock Units and the Account to which they are credited are intended to constitute and at all times shall be interpreted and administered so as to qualify as an unfunded deferred compensation arrangement for a select group of management of the Company under the Employee Retirement Income Security Act of 1974, as amended. Your settlement rights pursuant to this Agreement shall be no greater than the right of any unsecured general creditor of the Company. |
| 15. | Headings. Section headings are used in this Agreement for convenience of reference only and shall not affect the meaning of any provision of this Agreement. |
| 16. | Counterparts. This Agreement may be executed in counterparts (including electronic signatures or facsimile copies), each of which will be deemed an original, but all of which together will constitute the same instrument. |
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GLOSSARY
(a) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies and partnerships), as determined by the Committee.
(b) “Annual Retainer” has the meaning ascribed thereto in the Plan.
(c) “Board” or “Board of Directors” means the Board of Directors of the Company.
(d) “Change in Control” means (1) the acquisition (other than from the Company) in one or more transactions by any Person of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of (A) the then outstanding shares of the securities of the Company, or (B) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the “Company Voting Stock”); (2) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or (3) the effective time of any merger, share exchange, consolidation, or other business combination involving the Company if immediately after such transaction persons who hold a majority of the outstanding voting securities entitled to vote generally in the election of directors of the surviving entity (or the entity owning 100% of such surviving entity) are not persons who, immediately prior to such transaction, held the Company Voting Stock.
(e) “Change in Control Event” has the meaning ascribed thereto under Code section 409A(a)(2)(A)(v) with respect to a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company.
(f) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder.
(g) “Committee” means the “Plan Administrator” as defined under the Plan.
(h) “Company” means Magellan Gold Corporation., a Nevada corporation.
(i) “Cyclical Equity Grant” has the meaning ascribed thereto in the Plan.
(j) “Disability” means the inability to perform services on the Board by reason of any medically determinable physical or mental impairment that is expected to result in death or last for a continuous period of not less than twelve months. The Committee may require such proof of Disability as the Committee in its sole discretion deems appropriate and the Committee’s good faith determination as to whether and when you are totally and permanently disabled will be final and binding on all parties concerned.
(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor thereto.
(l) “Fair Market Value” means, with respect to a share of the Common Stock on the relevant date, the closing price, regular way, reported on the New York Stock Exchange or if no sales of the Common Stock are reported on the New York Stock Exchange for that date, the closing price for the last previous day for which sales were reported on the New York Stock Exchange. If the Common Stock is no longer listed on the New York Stock Exchange, the Committee may designate such other exchange, market or source of data as it deems appropriate for determining such value for the purposes of the Plan. For all purposes under the Plan, the term “relevant date” as used in this definition of Fair Market Value means the date as of which Fair Market Value is to be determined.
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(m) “Non-Employee Director” means a member of the Board who, at the time of his or her service, is not an employee of the Company or any Affiliate.
(n) “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than employee benefit plans sponsored or maintained by the Company or by entities controlled by the Company.
(o) “Termination Date” means the date on which you cease your service relationship with the Company.
(p) “You”; “Your”. You means the recipient of the Stock Units as reflected in the first paragraph of this Agreement. Whenever the word “you” or “your” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Committee, to apply to the estate, personal representative, or beneficiary to whom the Stock Units may be transferred by will or by the laws of descent and distribution, the words “you” and “your” will be deemed to include such person.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer this 1st day of August, 2020.
| MAGELLAN GOLD CORPORATION | |
| By: ./s/ John Power | |
| President | |
| Date: |
The undersigned hereby acknowledges that he/she has carefully read this Agreement and agrees to be bound by all of the provisions set forth herein.
| AWARD RECIPIENT | |
| /s/ Michael Lavigne | |
| Date: |
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