Item 3.02
Unregistered Sales of Equity Securities
On March 28, 2019, General Moly, Inc. (the Company) executed a Securities Purchase Agreement (the Purchase Agreement) with Bruce D. Hansen, the Companys Chief Executive Officer, and Robert I. Pennington, the Companys Chief Operating Officer (collectively the Investors), effective as of March 21, 2019. Pursuant to the Purchase Agreement, the Investors have agreed to purchase up to $900,000 of convertible shares of Series A Preferred Stock, par value $0.001 per share (the Preferred Stock), of the Company.
The Preferred Stock is being issued at a price of $100.00 per share, and each share of the Preferred Stock will be convertible at any time at the holders discretion into 370.37 shares of common stock of the Company. The Preferred Stock carries a 5% annual dividend, which may be paid, in the Companys sole discretion, in cash, additional shares of Preferred Stock or a combination thereof. The Preferred Stock will vote together with the Companys common stock as a single class on an as-converted basis. The Preferred Stock is mandatorily redeemable at such time that the Companys senior convertible promissory notes issued in December 2014 become due and payable in accordance with their terms, as such terms may be modified from time to time.
The Company may request up to three separate closings of sales of Preferred Stock to the Investors between the date of the Purchase Agreement and June 30, 2019. Each closing may be in an amount up to $300,000 of Preferred Stock and must occur at least 30 days after the previous closing. On March 28, 2019, the Company and the Investors completed the first closing of $300,000 of Preferred Stock, or 3,000 shares, as follows:
Investor Name
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Number of Shares of Preferred Stock
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Bruce D. Hansen
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2,667
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Robert I. Pennington
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333
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The offer, issuance and sale of the Preferred Stock is being made pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, under Section 4(a)(2) and Rule 506(b) of Regulation D promulgated thereunder. In accordance with the Companys policies for approving related party transactions, this transaction was approved by the Audit Committee of the Companys Board of Directors, as well as the disinterested members of the full Board of Directors.
The foregoing description of the Purchase Agreement does not purport and is not intended to be complete and is qualified in its entirety by reference to the full text of the
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