Item 1.01 Entry into a Material Definitive Agreement.
On June 21, 2019, Comstock Mining Inc. (the “Company”) entered into a Third Purchase Agreement Amendment (the “Amendment”) of the Company’s previously announced Membership Interest Purchase Agreement with Tonogold Resources, Inc. (“Tonogold”).
Pursuant to the Amendment, Tonogold was permitted to delay closing to as late as July 26, 2019, by delivering one of the following forms of consideration by June 28, 2019: (a) a non-refundable cash deposit of $1,000,000 applicable to the total purchase price of $15,000,000 (the “Purchase Price”); or (b) a non-refundable deposit of $750,000 in cash applicable to the Purchase Price, plus an extension fee in shares of Series E Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock of Tonogold (the “Shares”) with a stated value of $250,000 that is not applicable to the Purchase Price; or (c) a non-refundable deposit of $500,000 in cash, plus an extension fee of Shares with a stated value of $500,000 that is not applicable to the Purchase Price. Pursuant to Amendment, Tonogold delivered a non-refundable cash deposit of $600,000 on June 24, 2019.
If the closing does not occur on or prior to July 26, 2019, Tonogold may further delay closing until August 30, 2019, by delivering one of the following forms of consideration by July 26, 2019: (a) a non-refundable deposit of $1,000,000 in cash, applicable to the Purchase Price or (b) delivering a non-refundable deposit of $500,000 in cash, applicable to the Purchase Price, plus an extension fee in Shares with a stated value of $500,000 that is not applicable to the Purchase Price.
Tonogold is required to include with each additional deposit, whether or not accompanied by an extension payment in Shares, the additional cost of interest incurred by the Company and certain enumerated operating expenses.
The Shares shall have substantially identical terms as Tonogold’s Series D Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock, except that the Shares shall have a conversion price that is the lowest of (i) $0.10 per share, (ii) the 20-day volume weighted closing price of Tonogold common shares immediately prior to conversion, or (iii) Tonogold’s initial public offering price per common share.
The foregoing summary of the terms of the Amendment is not intended to be exhaustive and is qualified in its entirety by the terms of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
A copy of the press release announcing the transactions contemplated by the Amendment is attached as Exhibit 99.1 to this Form 8-K.