SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event
reported):
AUGUST 14, 1997
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
On August 8, 1997, the Registrant ("ESSI") entered into a letter agreement (the
"Letter of Intent") with Noranda Mining and Exploration Inc. ("NME") outlining
the nonbinding intention of the parties to enter into formal agreements
implementing a strategic alliance between Noranda Inc. and its mining affiliates
(including Falconbridge Limited and its affiliates) (collectively the "Noranda
Group") relating to the use of the ESSI's hyperspectral technology and related
processing technology (the "Technology") for activities associated with the
exploration and development of commercial mining properties.
Under the terms of the Letter of Intent, Earth Search Sciences and its
affiliates will execute a license agreement (the "License") in favor of the
Noranda Group providing the Noranda Group with an exclusive license to use the
Technology anywhere in the world for activities associated with the exploration
and development of properties for commercial mining purposes. ESSI will retain
all rights to the Technology for all other purposes, and is free to use its
Technology on properties it already owns, including the Kazakstan properties, or
properties it acquires in the future without the use of the Technology.
The Letter of Intent provides for the License to have an initial term of 3 years
and is renewable for an additional 3 year period. Under the terms of and during
the term of the License, the Noranda Group will agree to use the Technology
exclusively in lieu of any competing technologies involving airborne
hyperspectral imaging for mineral exploration. ESSI will provide the Noranda
Group with a minimum amount of services annually that include overflights using
the Technology on an as-needed basis at preferred rates.
ESSI will retain certain rights to participate in projects discovered using the
Technology on properties that are acquired by the Noranda Group as a result of
using the Technology.
Upon closing of the formal agreements, one or more members of the Noranda Group
will subscribe for a private placement of validly issued preferred shares of
ESSI in the aggregate amount of US$ 1,000,000. The preferred stock is
convertible into ESSI common stock at a mutually agreed upon conversion ratio.
Each share of preferred stock carries a warrant to purchase additional common
stock of ESSI at an agreed upon price for a period of 3 years. The preferred
stock does not bear any dividend rights. Noranda Group has the option to request
the redemption of the preferred stock in the event ESSI has not registered the
common stock underlying the preferred stock and the common stock has not traded
above a certain level for a period of 90 consecutive days following the
registration of the underlying common stock. ESSI may redeem the preferred stock
at any time at par value.
The Noranda Group has prepaid US$500,000 of the private placement subscription
which was secured by a promissory note executed by ESSI. The prepayment may be
credited against the private placement on formal closing of the agreements. In
the event that the formal closing does not occur, the note shall be repayable on
October 8, 1997 or may, at the option of the Noranda Group, be convertible into
such number of ESSI common shares as is obtained by dividing US$500,000 by the
average closing price of ESSI common shares for the 30 day period immediately
prior to the date of the conversion.
The parties will endeavor to execute final agreements implementing this
transaction by August 29, 1997.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
/s/ Larry F. Vance
Chairman and Director
August 14, 1997
