MAGELLAN GOLD CORPORATION (OTCMKTS:MAGE) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantITEM 2.03CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBGLIATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On November 2, 2017, Magellan Gold Corporation, a Nevada corporation (the “Company”) sold a 10% Convertible Promissory Note (“Note”) in principal amount of $125,000 for a purchase price equal to the principal amount of the Note to the terms of a of Securities Purchase Agreement dated November 2, 2017. The Securities Purchase Agreement is filed herewith as Exhibit 10.1 and the Note is filed herewith as Exhibit 99.1.
ITEM 3.02UNREGISTERED SALE OF EQUITY SECURITIES
ITEM 7.01REGULATION FD DISCLOSURE
The following sets forth the information required by Item 701 of Regulation S-K with respect to the unregistered sales of equity securities by Magellan Gold Corporation (the "Company"), effective November 2, 2017:
a.On November 2, 2017 the Company sold an aggregate of $125,000 of its securities consisting of a 10% Convertible Promissory Note (the “Note”). The purchase price for the Note is equal to the principal amount of the Note as reflected in Item 2.03 above. After deducting the investor’s discount and legal fees, net proceeds to the Company were $113,500.
b.The Note was sold to one investor which qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933 as amended (the "Securities Act").
c.The Company is obligated to pay a $7,400 consulting fee to an unaffiliated third party in connection with the issuance of the Securities.
d.The issuance of the Securities was undertaken without registration under the Securities Act in reliance upon an exemption from the registration requirements of the Securities Act set forth in Sections 4(2) thereunder. The investors each qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation D. In addition, the Securities, which were taken for investment purposes and not for resale, were subject to restrictions on transfer. We did not engage in any public advertising or general solicitation in connection with this transaction, and we provided the investor with disclosure of all aspects of our business, including providing the investor with our reports filed with the Securities and Exchange Commission and other financial, business and corporate information. Based on our investigation, we believed that the accredited investors obtained all information regarding the Company that each requested, received answers to all questions posed and otherwise understood the risks of accepting our Securities for investment purposes.
e.After 180 days from the date of closing the Note, principal and accrued interest, is convertible, at the option of the holder, into shares of common stock of the Company. The conversion price is the lesser of (i) the closing sale price of the common stock on the trading day immediately preceding the closing date the Note and (ii) 65% of the lowest trading price of the common stock for the 20 trading days preceding the conversion date, or the closing bid price, whichever is lower. The conversion price is also subject to
further adjustment under certain circumstances.
f.Net proceeds will be used for general working capital.
ITEM 9.01:FINANCIAL STATEMENTS AND EXHIBITS
|
Item |
Title |
|
10.1 |
Securities Purchase Agreement |
|
99.1 |
Promissory Note |
MAGELLAN GOLD Corp ExhibitEX-10.1 2 magellan_10ez1.htm SECURITIES PURCHASE AGREEMENT Microsoft Word – SPA – MAGE,…To view the full exhibit click here