EL CAPITAN PRECIOUS METALS, INC. (OTCMKTS:ECPN) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Convertible Note and Warrant Financing
Transaction

On February 21, 2017, El Capitan Precious Metals, Inc. (the
Company) entered into a Securities Purchase Agreement to which
the Company issued a convertible note (the Note) to an accredited
investor in the aggregate principal amount of $550,000, or such
lesser amounts based on actual advances thereunder. In order to
reflect an agreed upon original issue discount, the outstanding
principal amount of the Note attributable to each advance is 110%
of the amount of the corresponding advance (i.e., a $100,000
advance results in outstanding principal attributable to the
advance of $110,000). Upon issuance of the Note, the investor
made a $100,000 initial advance. The Company and the investor
must mutually agree upon any future advances under the Note.
Amounts advanced under the Note will accrue interest at seven
percent per annum. Except to the extent converted into common
stock of the Company, as discussed below, outstanding principal
and interest will become due and payable on August 21, 2017.
Amounts outstanding under the Note are convertible at the
election of the investor into common stock of the Company at a
conversion price equal to $0.0913 (the volume weighted average
price of the Companys common stock on the day prior to the
issuance date). The Note provides for various events of default
upon which amounts outstanding under the Note will immediately
increase by 140% and the conversion price will be permanently
redefined to equal 60% of the average of the three lowest traded
prices during the 14 consecutive trading days preceding the
conversion date. As additional consideration for the initial
advance, the Company issued the investor a three year warrant to
purchase up to 602,406 shares of the Companys common stock at an
exercise price equal to $0.3652 per share (which price is subject
to anti-dilution adjustment in the event the Company issues
additional convertible securities with lower conversion prices).
In conjunction with any future advances under the Note, the
Company will issue additional three year warrants to purchase a
number of shares equal to 50% of the conversion shares issuable
upon conversion of the amount advanced.

The Securities Purchase Agreement contains covenants,
representations and warranties of the Company and the investor
that are typical for transactions of this type.

The foregoing description of the terms of the Securities Purchase
Agreement, Note and the warrants does not purport to be complete
and is subject to and qualified in its entirety by reference to
the agreements and instruments themselves, copies of which are
filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this
report, and the terms of which are incorporated herein by
reference. The benefits and representations and warranties set
forth in such agreements and instruments are not intended to and
do not constitute continuing representations and warranties of
the Company or any other party to persons not a party thereto.

Termination of River North Purchase Agreement; Entry
into L2 Purchase Agreement

The Company and River North Equity, LLC (River North) have been
parties to an Equity Purchase Agreement dated March 16, 2016, as
amended by Amendment No. 1 dated December 9, 2016 (as so amended,
the River North Purchase Agreement). Under the River North
Purchase Agreement, the Company had the right from time to time,
in its discretion, to sell shares of its common stock to River
North for aggregate gross proceeds of up to $5,000,000.

On February 21, 2017, the Company and River North terminated the
River North Purchase Agreement and a related registration rights
agreement and the Company entered into a new Equity Purchase
Agreement (the L2 Purchase Agreement) with L2 Capital, LLC (L2
Capital), an affiliate of River North. Under the L2 Purchase
Agreement, the Company may from time to time, in its discretion,
sell shares of its common stock to L2 Capital for aggregate gross
proceeds of up to $5,000,000. Unless terminated earlier, L2
Capitals purchase commitment will automatically terminate on the
earlier of the date on which L2 Capital shall have purchased
Company shares to the Purchase Agreement for an aggregate
purchase price of $5,000,000, or February 21, 2020. The Company
has no obligation to sell any shares under the L2 Purchase
Agreement.

As provided in the L2 Purchase Agreement, the Company may require
L2 Capital to purchase shares of common stock from time to time
by delivering a put notice to L2 Capital specifying the total
number of shares to be purchased (such number of shares
multiplied by the purchase price described below, the Investment
Amount); provided there must be a minimum of ten trading days
between delivery of each put notice. The Company may determine
the Investment Amount, provided that such amount may not be more
than the average daily trading volume in dollar amount for the
Companys common stock during the 10 trading days preceding the
date on which the Company delivers the applicable put notice.
Additionally, such amount may not be lower than $5,000 or higher
than $150,000. L2 Capital will have no obligation to purchase
shares under the L2 Purchase Agreement to the extent that such
purchase would cause L2 Capital to own more than 9.99% of the
Companys common stock.

For each share of the Companys common stock purchased under the
L2 Purchase Agreement, L2 Capital will pay a purchase price equal
to 85% of the Market Price, which is defined as the average of
the two lowest closing bid prices on the OTCQB Marketplace, as
reported by Bloomberg Finance L.P., during the five consecutive
Trading Days including and immediately prior to the settlement
date of the sale, which in most circumstances will be the trading
day immediately following the Put Date, or the date that a put
notice is delivered to L2 Capital (the Pricing Period). The
purchase price will be adjusted as follows: (i) an additional 10%
discount to the Market Price will be applied if either (A) the
Closing Price of the Common Stock on the Put Date is less than
$0.10 per share, or (B) the average daily trading volume in
dollar amount for the Common Stock during the ten Trading Days
including and immediately preceding the Put Date is less than
$50,000; (ii) an additional 5% discount to the Market Price will
be applied if the Company is not deposit/withdrawal at custodian
(DWAC) eligible; and (iii) an additional 10% discount to the
Marker Price will be applied if the Company is under DTC chill
status. L2 Capitals obligation to purchase shares on any
settlement date is subject to customary closing conditions,
including without limitation a requirement that a registration
statement remain effective registering the resale by L2 Capital
of the shares to be issued. The L2 Purchase Agreement is not
transferable and any benefits attached thereto may not be
assigned.

The L2 Purchase Agreement contains covenants, representations and
warranties of the Company and L2 Capital that are typical for
transactions of this type. In addition, the Company and L2
Capital have granted each other customary indemnification rights
in connection with the L2 Purchase Agreement. The L2 Purchase
Agreement may be terminated by the Company at any time.

In connection with the L2 Purchase Agreement, the Company also
entered into Registration Rights Agreement with L2 Capital
requiring the Company to prepare and file, within 45 days, a
registration statement registering the resale by L2 Capital of
shares to be issued under the L2 Purchase Agreement, to use
commercially reasonable efforts to cause such registration
statement to become effective, and to keep such registration
statement effective until (i) three months after the last closing
of a sale of shares under the L2 Purchase Agreement, (ii) the
date when L2 Capital may sell all the shares under Rule 144
without volume limitations, or (iii) the date L2 Capital no
longer owns any of the shares.

The foregoing description of the terms of the Termination with
River North and the L2 Purchase Agreement and corresponding
Registration Rights Agreement does not purport to be complete and
is subject to and qualified in its entirety by reference to the
agreements themselves, copies of which are filed as Exhibits
10.4, 10.5 and 10.6, respectively, to this report, and the terms
of which are incorporated herein by reference. The benefits and
representations and warranties set forth in such documents (if
any) are not intended to and do not constitute continuing
representations and warranties of the Company or any other party
to persons not a party thereto.

The information provided in Item 1.01 is incorporated by
reference in this Item 3.02.

The issuance of the Note and warrant, and the shares issuable
upon any conversion or exercise thereof, were not registered
under the Securities Act of 1933, as amended (the Securities
Act), and therefore may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements. For these issuances, the Company
relied on the exemption from federal registration under Section
4(2) of the Securities Act and/or Rule 506 promulgated
thereunder, based on the Companys belief that the offer and sale
of such securities did not involve a public offering.

The offering of shares issuable under the L2 Purchase Agreement
was not registered under the Securities Act, and therefore may
not be offered or sold in the United States absent registration
or an applicable exemption from registration requirements. For
such issuances, the Company is relying on the exemption from
federal registration under Section 4(2) of the Securities Act
and/or Rule 506 promulgated thereunder, based on the Companys
belief that the offer and sale of such securities did not involve
a public offering.

About EL CAPITAN PRECIOUS METALS, INC.  (OTCMKTS:ECPN)

El Capitan Precious Metals, Inc., together with its subsidiaries, is an exploration-stage company. The Company is principally engaged in the business of acquiring properties containing precious metals, principally gold, silver and platinum. The Company’s primary asset is its interest in El Capitan, Ltd. (ECL), which holds an interest in the El Capitan property located near Capitan, New Mexico. As of September 30, 2016, its holdings at the El Capitan Property consisted of four patented mining claims, covering approximately 77.5 acres (the patented claims), and 12 lode claims with the Bureau of Land Management (BLM), covering approximately 2,240 acres (the BLM claims). The lode claims are known as Mineral Survey Numbers 1440, 1441, 1442 and 1443. It has a joint venture interest in the COD Property, an underground property located in the Cerbat mountains in Mohave County, Arizona, approximately 11 miles north, northwest of Kingman, Arizona.

EL CAPITAN PRECIOUS METALS, INC.  (OTCMKTS:ECPN) Recent Trading Information

EL CAPITAN PRECIOUS METALS, INC.  (OTCMKTS:ECPN) closed its last trading session down -0.0034 at 0.0840 with 843,295 shares trading hands.