Item 1.01 Entry into a Material Definitive Agreement.
On July 22, 2014, Geovic Mining Corp. (the "Company") entered into a securities
purchase agreement (the "Securities Purchase Agreement"), registration rights
agreement (the "Registration Rights Agreement") and note purchase agreement (the
"Note Purchase Agreement"), in each case with Tangiers Investment Group, LLC
Pursuant to the Securities Purchase Agreement, Tangiers has committed to
purchase up to $3.0 million of the Company's common stock, par value $0.0001 per
share (the "Common Stock"), from time to time upon the Company's advance written
request over the course of 36 month commitment period (the "Commitment Period"),
contingent on the Company filing and obtaining an effective registration of the
underlying shares with the Securities and Exchange Commission (the "SEC") and
the Company timely complying with its reporting requirements under the
Securities Exchange Act of 1934, as amended, and applicable SEC regulations. The
Company is entitled to request such equity investments from Tangiers from time
to time during the Commitment Period in an amount of up to $100,000 per request,
and in connection with each request the Company will issue and sell to Tangiers,
and Tangiers will purchase from the Company, that number of shares of Common
Stock determined by dividing the amount of the advance requested by the Company
by a purchase price equal to 85% of the lowest daily volume weighted average
trading price of the Common Stock during the five consecutive trading days
following the date of the Company's request. The Securities Purchase Agreement
includes certain restrictions on the ability of the Company to issue or sell its
capital stock or securities granting rights to acquire its capital stock for
consideration less than the then current market price of the Company's Common
The Securities Purchase Agreement also requires that the Company issue to
Tangiers restricted Common Stock equal to 2.5% of Tangier's $3.0 million
commitment as a commitment fee. The commitment fee Common Stock is issuable by
the Company to Tangiers in two 50% tranches, with the first tranche due upon the
execution of the Securities Purchase Agreement and the second tranche due 60
days following the execution of the Securities Purchase Agreement. The number of
shares of restricted Common Stock issuable in each tranche is calculated by
dividing the dollar amount of each tranche by the average volume weighted
average trading price of the Common Stock during the five business days
preceding the date on which the shares for such tranche are due to be issued.
Pursuant to the Registration Rights Agreement, the Company agreed to prepare and
file with the SEC a registration statement on Form S-1 or on such other form as
is available and to cause such registration statement to be declared effective
by the SEC prior to the first sale to Tangiers of the Company's Common Stock
pursuant to the Securities Purchase Agreement.
Pursuant to the Note Purchase Agreement, the Company agreed to issue a 4%
convertible promissory note (the "Convertible Note") to Tangiers, in the
original principal amount of $44,000, in consideration of the payment by
Tangiers of a purchase price equal to $40,000, with $4,000 retained by Tangiers
as original issue discount for due diligence, document preparation and legal
expenses in connection with the transactions contemplated by the Note Purchase
Agreement. The Company issued the Convertible Note on July 22, 2014.
The Convertible Note matures on July 22, 2015
, at which time the outstanding
principal amount of the Convertible Note and all accrued and unpaid interest
thereon is due and payable by the Company. The Convertible Note provides for
"guaranteed" interest on the principal balance thereof at the rate of 4%, which
interest is deemed earned as of the date of the Convertible Note's issuance, to
the extent such principal amount and interest have been repaid or converted into
the Company's Common Stock. The Convertible Note is convertible into shares of
the Company's Common Stock at the option of Tangiers at a conversion price equal
to 50% of the lowest trading price of the Company's Common Stock during the 20
consecutive trading days prior to the date on which Tangiers elects to convert
all or part of the Convertible Note.
The Convertible Note contains certain events of default, including with respect
to defaults in payment obligations, the commencement of bankruptcy proceedings
and certain failures relating to the listing, trading and bid price of the
Company's Common Stock, the occurrence of which may result in acceleration of
the Company's obligation to pay the outstanding principal amount of the
Convertible Note and all accrued and unpaid interest thereon. Upon the
occurrence and during the continuance of any event of default, additional
interest will accrue at the rate equal to the lower of 20% per annum or the
highest rate permitted by law and liquidated damages will accrue at the rate of
per day. In the event of any acceleration following an event of default,
the amount due and owing to Tangiers under the Convertible Note will be
increased to 150% of the outstanding principal amount of the Convertible Note
plus all accrued and unpaid interest, fees and liquidated damages, if any.
The foregoing description of the terms of the Securities Purchase Agreement, the
Registration Rights Agreement, the Note Purchase Agreement and the Convertible
Note does not purport to be complete and is subject to and qualified in its
entirety by reference to the Securities Purchase Agreement, the Registration
Rights Agreement, the Note Purchase Agreement and the Convertible Note, copies
of which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively, and the terms of which are incorporated herein by reference.
Item 2.03 Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03 of this Current Report on Form
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
10.1 Securities Purchase Agreement, dated July 22, 2014, between
Tangiers Investment Group, LLC and Geovic Mining Corp.
10.2 Registration Rights Agreement, dated July 22, 2014, between
Geovic Mining Corp. and Tangiers Investment Group, LLC.
10.3 Note Purchase Agreement, dated July 22, 2014, between Geovic
Mining Corp. and Tangiers Investment Group, LLC.
10.4 4% Convertible Promissory Note, dated July 22, 2014, issued by
Geovic Mining Corp. to Tangiers Investment Group, LLC.