Exhibit 10.3

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”) is dated as of August 10,
2020 by and among U.S. Gold Corp., a Nevada corporation (the “Company”) and each
of the purchasers identified on the signature pages hereto and such purchasers’
respective successors and assigns (individually, a “Purchaser” and collectively,
the “Purchasers”).

 

The parties hereto agree as follows:

 

Article I.

Purchase and Sale of COMMON Stock

 

Section 1.01 Purchase and Sale of Stock. Upon the following terms and
conditions, the Company shall issue and sell at the Closing (as defined below),
and the Purchasers, severally and not jointly, agree to purchase at the Closing,
an aggregate of up to $5,530,004 of shares of the Company’s Series I Convertible
Preferred Stock, par value $0.001 per share (the “Preferred Stock”), with an
aggregate number of shares of Preferred Stock for each Purchaser equal to that
number of shares as is set forth on each such Purchaser’s signature page hereto
(collectively, the “Shares”) and 5-year warrants (the “Warrants”) to a purchase
a number of shares of the Company’s common stock, par value $0.001 per share
(the “Common Stock”) as provided in Section 1.03 below, at a price per Share
equal to $6.00 per share (the “Per Share Purchase Price,” and such amounts in
the aggregate, the “Purchase Price”). The Company and the Purchasers are
executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Rule 506 of Regulation D
(“Regulation D”) as promulgated by the United States Securities and Exchange
Commission (the “Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”). The Certificate of Designation of the Rights, Powers,
Preferences, Privileges and Restrictions of the Preferred Stock (the
“Certificate of Designation”) is attached hereto as Exhibit A and the form of
Warrant is attached hereto as Exhibit B.

 

Section 1.02 Closing.

 

(a) On the closing date (the “Closing Date”), upon the terms and subject to the
conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell at
the closing (the “Closing”), and each Purchaser, severally and not jointly,
agrees to purchase at the Closing, the number of Shares and Warrants set forth
on each such Purchaser’s signature page hereto for an aggregate subscription
price equal to such number of Shares multiplied by the Per Share Purchase Price
(as to each Purchaser, the “Subscription Amount”). Each Purchaser purchasing
Shares on the Closing Date shall deliver to the Company such Purchaser’s
Subscription Amount by wire transfer of immediately available funds in
accordance with the Company’s written wire instructions, and the Company shall
deliver to each Purchaser its Shares deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections 1.03 and
1.04, the Closing shall occur at the offices of Haynes and Boone, LLP, 30
Rockefeller Plaza, 26th Floor, New York, New York 10112 or such other location
as the parties shall mutually agree.

 

Section 1.03 Deliveries.

 

(a) On or prior to the Closing, the Company shall deliver or cause to be
delivered to each Purchaser purchasing the shares of Preferred Stock on the
Closing Date each of the following:

 

(i) this Agreement duly executed by the Company;

 

(ii) evidence of the issuance of the Shares in “book entry” form;

 

(iii) a Warrant exercisable for a number of shares of Common Stock equal to 100%
of the number of shares of Common Stock issuable upon conversion of the
Preferred Stock being acquired by such Purchaser, with an exercise price per
share equal to the Per Share Purchase Price.

 

   

 

 

(b) On or prior to the Closing Date, each Purchaser purchasing Preferred Stock
on the Closing Date shall deliver or cause to be delivered to the Company the
following:

 

(i) this Agreement duly executed by such Purchaser; and

 

(ii) such Purchaser’s Subscription Amount by wire transfer to the account
specified in writing by the Company.

 

Section 1.04 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:

 

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate in all material
respects as of such date);

 

(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by each Purchaser of the items set forth in Section 1.03(b)
of this Agreement.

 

(b) The respective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of
the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate in all material
respects as of such date);

 

(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;

 

(iii) the delivery by the Company of the items set forth in Section 1.03(a) of
this Agreement.

 

Article II.

Representations and Warranties

 

Section 2.01 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers, as of the date hereof, as follows:

 

(a) Organization, Good Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
The Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary except for
any jurisdiction(s) (alone or in the aggregate) in which the failure to be so
qualified will not have material adverse effect on the business, operations,
assets, properties, prospects or financial condition of the Company, and/or any
condition, circumstance, or situation that would prohibit or otherwise interfere
with the ability of the Company to perform any of its obligations under this
Agreement in any material respect (each, a “Material Adverse Effect”).

 

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(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and perform this Agreement and to issue and sell the
Securities (as defined below) in accordance with the terms hereof and otherwise
carry out its obligations hereunder. The execution, delivery and performance of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no further consent or authorization of the Company or its
Board of Directors or stockholders is required. This Agreement has been duly
executed and delivered by the Company. This Agreement and the Warrants
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by
other equitable principles of general application.

 

(c) Issuance of Securities. The Shares to be issued at the Closing have been
duly authorized by all necessary corporate action and the Shares, when paid for
or issued in accordance with the terms hereof, shall be validly issued and
outstanding, fully paid and nonassessable. The shares of Common Stock, issuable
upon conversion of the shares of Preferred Stock (the “Conversion Shares”) will
be, upon conversion of the Preferred Stock in accordance with the Certificate of
Designation, duly authorized, validly issued, fully paid and non-assessable. The
shares of Common Stock issuable upon exercise of the Warrants (the “Warrant
Shares”) will be, upon exercise of the warrants in accordance with their terms,
duly authorized, validly issued, fully paid and non-assessable. The Shares, the
Warrants, the Conversions and the Warrant Shares are collectively referred to
herein as the “Securities.”

 

(d) No Conflicts. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
herein do not and will not (i) conflict with or violate any provision of the
Company’s Certificate of Incorporation or Bylaws, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which it or its properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, charge or
encumbrance of any nature on any property of the Company under any agreement or
any commitment to which the Company is a party or by which the Company is bound
or by which any of its properties or assets are bound or (iv) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company are bound or affected, except, in all cases other than violations
pursuant to clause (i) above, for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.

 

Section 2.02 Representations and Warranties of the Purchasers. Each of the
Purchasers hereby makes the following representations and warranties to the
Company with respect solely to itself and not with respect to any other
Purchaser:

 

(a) Organization and Standing of the Purchasers. If the Purchaser is an entity,
such Purchaser is a corporation, limited liability company or partnership duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.

 

(b) Authorization and Power. Each Purchaser has the requisite power and
authority to enter into and perform this Agreement and to purchase the
Securities being sold to such Purchaser hereunder. This Agreement has been duly
authorized, executed and delivered by such Purchaser and constitutes, or shall
constitute when executed and delivered, a valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with the terms
thereof, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by other equitable principles of general
application.

 

(c) Purchase for Own Account. Each Purchaser is acquiring the Securities solely
for its own account and not with a view to or for sale in connection with
distribution. Each Purchaser does not have a present intention to sell the
Securities, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Securities to or through any person
or entity. Each Purchaser acknowledges that it is able to bear the financial
risks associated with an investment in the Securities and that it has been given
full access to such records of the Company and to the officers of the Company
and received such information as it has deemed necessary or appropriate to
conduct its due diligence investigation and has sufficient knowledge and
experience in investing in companies similar to the Company in terms of the
Company’s stage of development so as to be able to evaluate the risks and merits
of its investment in the Company.

 

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(d) Status of Purchasers. Such Purchaser is an “accredited investor” as defined
in Rule 501 of Regulation D promulgated under the Securities Act. Such Purchaser
is not required to be registered as a broker-dealer under Section 15 of the
Exchange Act and such Purchaser is not a broker-dealer.

 

(e) Opportunities for Additional Information. Each Purchaser acknowledges that
it has received and carefully reviewed the Company’s public filings with the
U.S. Securities and Exchange Commission available at www.sec.gov. Each Purchaser
acknowledges that such Purchaser has had the opportunity to ask questions of and
receive answers from, or obtain additional information from, the executive
officers of the Company concerning the financial and other affairs of the
Company, and to the extent deemed necessary in light of such Purchaser’s
personal knowledge of the Company’s affairs, such Purchaser has asked such
questions and received answers to the full satisfaction of such Purchaser, and
such Purchaser desires to invest in the Company. Neither such inquiries nor any
other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser’s right
to rely on the truth, accuracy and completeness of the Company’s representations
and warranties contained in this Agreement.

 

(f) No General Solicitation. Each Purchaser acknowledges that the Securities
were not offered to such Purchaser by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio or (ii) any seminar or meeting to which such
Purchaser was invited by any of the foregoing means of communications.

 

(g) Restricted Securities. Such Purchaser understands that the Securities must
be held indefinitely unless they are registered under the Securities Act or an
exemption from registration is available.

 

(h) General. Such Purchaser understands that the Securities are being offered
and sold in reliance on a transactional exemption from the registration
requirement of federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Securities.

 

Article III.

transfer restrictions

 

Section 3.01 Transfer Restrictions. The Purchasers covenant that the Securities
will only be disposed of pursuant to an effective registration statement under,
and in compliance with the requirements of, the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act,
and in compliance with any applicable state securities laws. In connection with
any transfer of Securities other than pursuant to an effective registration
statement, the Company may require the transferor to provide the Company with an
opinion of counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act.

 

Section 3.02 Legend. The Purchasers agree to the imprinting of the following
legend on any certificate evidencing any of the Securities and to the notation
of such legend in the stock books of the Company (in addition to any legend
required by applicable state securities or “blue sky” laws):

 

THESE SECURITIES REPRESENTED BY THIS CERTIFICATE AND ANY OTHER SECURITIES FOR
WHICH THIS SECURITY IS CONVERTIBLE INTO OR EXERCISABLE FOR (COLLETCIVELY, THE
“SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN
OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

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Article IV.

Miscellaneous

 

Section 4.01 Stockholder Approval. The Company shall provide each stockholder
entitled to vote at an annual or special meeting of stockholders of the Company
(the “Stockholder Meeting”), which shall be promptly called and held not later
than December 31, 2020 (the “Stockholder Meeting Deadline”), a proxy statement
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting
for approval of resolutions (“Stockholder Resolutions”) providing for the
issuance of the Conversion Shares and Warrant Shares in compliance with the
rules and regulations of the Nasdaq Capital Market (the “Stockholder Approval”,
and the date the Stockholder Approval is obtained, the “Stockholder Approval
Date”), and the Company shall use its reasonable best efforts to solicit its
stockholders’ approval of such resolutions and to cause the Board of Directors
of the Company to recommend to the stockholders that they approve such
resolutions. The Company shall be obligated to seek to obtain the Stockholder
Approval by the Stockholder Meeting Deadline. If, despite the Company’s
reasonable best efforts the Stockholder Approval is not obtained on or prior to
the Stockholder Meeting Deadline, the Company shall cause an additional
Stockholder Meeting to be held on or prior to March 31, 2021. If, despite the
Company’s reasonable best efforts the Stockholder Approval is not obtained after
such subsequent stockholder meetings, the Company shall cause an additional
Stockholder Meeting to be held quarterly thereafter until such Stockholder
Approval is obtained.

 

Section 4.02 Fees and Expenses. Except as otherwise set forth in this Agreement,
each party shall pay the fees and expenses of its advisors, counsel, accountants
and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all stamp or other similar taxes and
duties levied in connection with issuance of the Shares or Parent common stock
pursuant hereto.

 

Section 4.03 Specific Enforcement, Consent to Jurisdiction.

 

(a) The Parties acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.

 

(b) Each Party (i) hereby irrevocably submits to the jurisdiction of the state
and federal courts located in Las Vegas, Nevada for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby and (ii) hereby waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Each Party consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to such party at
the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 4.04 shall affect or limit any right to serve
process in any other manner permitted by law.

 

Section 4.04 Entire Agreement; Amendment. This Agreement (including all exhibits
and schedules hereto) contains the entire understanding and agreement of the
parties with respect to the matters covered hereby and, except as specifically
set forth herein, no Party hereto makes any representations, warranty, covenant
or undertaking with respect to such matters and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written instrument signed by the Company, the Parent and the
Purchasers holding a majority of the Shares then outstanding and held by
Purchasers. No such amendment shall be effective to the extent that it applies
to less than all of the holders of the Shares then outstanding.

 

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Section 4.05 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall be
effective (a) upon hand delivery by telex (with correct answer back received),
telecopy, e-mail or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

(a) If to the Company:

 

  U.S Gold Corp.   1910 East Idaho Street   Suite 102-Box 604   Elko, NV 89801  
Attention: Edward M. Karr   E-mail: ek@usgoldcorp.gold       with copies to:    
  Haynes and Boone, LLP   30 Rockefeller Plaza, 26th Floor   New York, New York
10112   Attention: Rick A. Werner, Esq.   Email: rick.werner@haynesboone.com

 

(b) If to any Purchaser at the address of such Purchaser set forth on the
signature pages hereto.

 

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

 

Section 4.06 Waivers. No waiver by a party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provisions, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

 

Section 4.07 Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

 

Section 4.08 Successors and Assigns; Restrictions on Transfer. This Agreement
shall be binding upon and inure to the benefit of the parties and their
successors and assigns. Neither the Company nor Parent may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchasers.

 

Section 4.09 No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

Section 4.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Nevada, without giving effect
to any of the conflicts of law principles which would result in the application
of the substantive law of another jurisdiction. This Agreement shall not be
interpreted or construed with any presumption against the party causing this
Agreement to be drafted. Each party hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all rights to a trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

 

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Section 4.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need
not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.

 

Section 4.12 Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision or part of a provision of this Agreement and such provision
shall be reformed and construed as if such invalid or illegal or unenforceable
provision, or part of such provision, had never been contained herein, so that
such provisions would be valid, legal and enforceable to the maximum extent
possible.

 

Section 4.13 Further Assurances. From and after the date of this Agreement, upon
the request of any Purchaser or the Company, each of the Company and the
Purchasers shall execute and deliver such instrument, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

 

Section 4.14 Like Treatment of Purchasers. No consideration shall be offered or
paid to any Purchaser to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration is also offered to all
of the Purchasers then holding Shares. Further, the Company shall not make any
payments or issue any securities to the Purchasers in amounts which are
disproportionate to the respective numbers of outstanding Shares held by any
Purchasers at any applicable time. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of the Shares or otherwise.

 

[SIGNATURE PAGES FOLLOWS]

 

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Company Signature Page

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an authorized signatory as of the date first above written.

 

  U.S. GOLD CORP.         By:   Name:    Edward M. Karr   Title: Chief Executive
Officer

 

   

 

 

Purchaser Signature Page

 

By its execution and delivery of this signature page, the undersigned Purchaser
hereby joins in and agrees to be bound by the terms and conditions of the
Securities Purchase Agreement dated as of August 10, 2020 (the “Purchase
Agreement”) by and among U.S. Gold Corp. and the Purchasers (as defined
therein), as to the number of shares of Preferred Stock and Warrants set forth
below, and authorizes this signature page to be attached to the Purchase
Agreement or counterparts thereof.

 

  Name of Purchaser:
_______________________________________________________________________      
Signature:
______________________________________________________________________________  
    If Entity: Name _________________________________________________________  
      Title __________________________________________________________      
Address: ______________________________________________________________    
______________________________________________________________    
______________________________________________________________       Telephone
No.: ________________________       Email Address:          
                         Number of Shares:
_______________________________________                                  Warrant
Shares: _______________________________________        
                         Aggregate Purchase Price:
$_______________________________________        
                         SSN/EIN: _______________________________________      
Delivery Instructions (if different than above):       c/o:
____________________________________________________________       Address:
________________________________________________________      
______________________________________________________________       Telephone
No.: ___________________________________________________

 

AGREED AND ACCEPTED BY U.S GOLD CORP.

 

By:     Date:             Name:     Title: