LONE STAR GOLD, INC. (OTCMKTS:LSTG) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On March 14, 2019 the Company borrowed $50,000 from an unrelated third party. The loan is unsecured, bears interest at 8% per year, and is due and payable on September 14, 2019. At the option of the note holder, the note may at any time be converted into shares of the Company’s common stock. The number of shares to be issued upon conversion will be determined by dividing the amount to be converted by 60% of the average of the three lowest closing prices of the Company’s common stock during the ten trading days immediately preceding the conversion date. If at any time prior to July 14, 2020 the Company sells or issues any shares of its common stock at a price below $1.20 per share the Company will issue such number of additional shares of its common stock to the note holder as determined by the following:
A
B = C
A
$1.20 = D
C – D = Number of additional shares to be issued to the note holder
Where:
A = The principal amount of the note previously converted by the note holder.
B = The price per share at which the Company’s common stock was sold or issued.
On March 15, 2019 the note holder converted the note into 67,750 restricted shares of the Company’s common stock.
In connection with the issuance of the note and shares referenced to above the Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933. The holder of the note was a sophisticated investor and was provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the issuance of the note or shares. No commission was paid to any person in connection with this transaction.
Item 2.03.
Unregistered Sales of Equity Securities.
See Item 2.03 of this report.
About LONE STAR GOLD, INC. (OTCMKTS:LSTG)
Lone Star Gold, Inc. is an exploration-stage company. The Company is engaged in the business of gold and mineral exploration, acquisition and development. The La Candelaria property covered by the Concessions is located approximately 125 miles southwest of the city of Chihuahua, Mexico, in the municipality of Guachochi. The Tailings are located in the town of San Antonio del Potrero, Mineral de Jal, consists of approximately 75 hectares. The Tailings pile is approximately 200 meters from a paved state highway in San Antonio del Potrero. The Tailings pile is registered with the San Antonio Ejido and the city of Hidalgo del Parral. The Company’s consultants have estimated that the Tailings weigh 1.2 million tons. The Company’s consultants derived the factor of 1.25 tons of material per cubic meter by weighing trucks filled with the Tailings material.