FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number: 2-23022
HANOVER GOLD COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2740461
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
1000 Northwest Boulevard, Suite 100
Coeur d'Alene, Idaho 83814
(Address of principal executive offices)
Registrant's telephone number, including area code: (208) 664-4653
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period as the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of outstanding shares of the registrant's common stock at May 15,
1996 was 14,829,678 shares.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits. The following exhibit is filed as part of this report:
10.12 Amendment to Asset Purchase Agreement dated as of April 19, 1996
between the registrant and Tabor Resources Corporation.
Reports on Form 8-K. No reports on Form 8-K were filed by the registrant
during the period covered by this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HANOVER GOLD COMPANY, INC.
By: James A. Fish
--------------------------
its President
Date: May 14, 1996
By: Wayne Schoonmaker
---------------------------
its Principal Accounting Officer
Date: May 14, 1996
10.12 AMENDMENT TO ASSET PURCHASE AGREEMENT DATED AS OF APRIL 19, 1996 BETWEEN
THE REGISTRANT AND TABOR RESOURCES CORPORATION.
AMENDMENT TO
ASSET PURCHASE AGREEMENT
This amendment to asset purchase agreement (the "Amendment") is made effective
as of April 19, 1996, between Tabor Resources Corporation, a Minnesota
corporation (hereinafter referred to as "Seller"), whose address is 5198 West
76th Street, Edina, Minnesota 55439, and Hanover Gold Company, Inc., a Delaware
corporation (hereinafter referred to as "Buyer"), having its principal office
at 1000 Northwest Boulevard, Suite 100, Coeur d'Alene, Idaho 83814.
RECITALS:
A. The Seller and Buyer are parties to that certain Asset Purchase Agreement
dated effective as of March 25, 1996 (the "Purchase Agreement"), pursuant to
which Seller has agreed to sell, transfer, assign and convey to Buyer, and
Buyer has agreed to purchase from Seller, certain patented and unpatented
mining claims and a lease located in the Alder Gulch area of the Virginia City
Mining District in southwestern Montana, in consideration for which Buyer has
agreed to issue Seller shares of Buyer's common stock and to grant Seller
options to acquire additional shares of Buyer's common stock.
B. Seller and Buyer have agreed to amend the terms of the Purchase Agreement
to increase the number of shares of Buyer's common stock to be issued to Seller
and to delete the provisions of the Purchase Agreement providing for the grant
of options.
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, Seller and Buyer hereby amend the Purchase Agreement as follows.
1. Section 1.2 of the Purchase Agreement is amended to read in its entirety
as follows:
1.2 BASE PURCHASE PRICE. The base purchase price of the Properties (the
"Base Purchase Price") shall consist of the issuance by Buyer of 525,000 shares
(the "Shares") of its common stock, par value $.0001 per share (the "Common
Stock"). The Shares shall be issued to Seller at the Closing pursuant to the
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), afforded by Section 4(2) thereof. As provided
in subsection 1.4 of this Agreement, Buyer agrees to prepare and file a
registration statement under the Securities Act covering the Shares for resale
by Seller, and cause the same to be declared effective within six months of the
effective date of this Agreement.
2. Section 1.3 of the Purchase Agreement is amended to read in its entirety
as follows:
1.3 ADJUSTMENTS TO BASE PURCHASE PRICE. In addition to the Base Purchase
Price, Buyer agrees to issue Seller additional shares of Common Stock (the
"Additional Shares") under the following circumstances and in the following
amount. If, during the two year period commencing with the effective date of
this Agreement, the average bid price of the Common Stock during any period of
thirty consecutive trading days has never exceeded $2.00 per share, then,
promptly following the expiration of such two year period, Buyer shall issue
Seller such number of Additional Shares as are sufficient to raise the
aggregate market value of the Shares then owned by Seller (being those of the
525,000 shares of Common Stock issued to Seller pursuant to subsection 1.2,
above, then owned by Seller beneficially or of record) to $2.00. The number of
Additional Shares to be issued to Seller in such event shall be determined by
the following formula:
X = (2/FV x Y) - Y
E-1
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where "X" equals the number of Additional Shares, "Y" equals the number of
Shares then owned by Seller, and "FV" equals the average bid price of the
Common Stock as reported on the Nasdaq Stock Market during the period of thirty
consecutive trading days immediately preceding the expiration of such two year
period. Such Additional Shares (if required to be issued), when added to the
Shares comprising the Base Purchase Price payable by Buyer as hereinabove
provided, shall constitute the full consideration for the Properties.
3. Section 1.4 of the Purchase Agreement is amended to read in its entirety
as follows:
1.4 SECURITIES ACT REGISTRATION. Buyer, at its sole expense, shall
prepare and file a registration statement under the Securities Act covering the
Shares for resale by Seller, and shall cause such registration statement to be
declared effective by the Securities and Exchange Commission within six months
of the effective date of this Agreement. Buyer shall maintain such
registration statement in effect for a period of eighteen months.
4. Section 1.5 of the Purchase Agreement is amended to read in its entirety
as follows:
1.5 PIGGY-BACK REGISTRATION. If Buyer should prepare and file a
registration statement under the Securities Act subsequent to the date the
registration statement specified in subsection 1.4 of this Agreement ceases to
be effective (whether such registration statement is filed for the account of
Buyer or for the account of shareholders of Buyer), then Buyer shall include in
such registration statement, upon Seller's written request and at Buyer's sole
cost and expense, such shares of Common Stock issued and sold to Seller
pursuant to this Agreement then remaining unsold. Buyer shall provide Seller
with timely written notice of any registration statement it may choose to
prepare and file pursuant to this subsection 1.5 in order that Seller may
determine whether any such unsold shares are to be included.
5. Section 2.1 of the Purchase Agreement is amended to read in its entirety
as follows:
2.1 CLOSING DATES. The closing of the sale and purchase of the Shares
hereunder (the "Closing") shall be held in person at the offices of Randall &
Danskin, P.S., 1500 Seafirst Financial Center, Spokane, Washington 99201, or by
telephonic confirmation, no later than 5:00 p.m., Spokane time, on April 19,
1996 or as soon thereafter as is reasonably practicable, between Seller, who
will be present at or represented at the Closing by the law firm Lommen,
Nelson, Cole & Stageberg, P.A., 1800 IDS Center, 80 south 8th Street,
Minneapolis, Minnesota 55402, and Buyer, who will be present at or represented
at the Closing by the law firm Randall & Danskin, P.S., 1500 Seafirst Financial
Center, Spokane, Washington 99201, or at such other place upon which Seller and
Buyer shall agree, and shall be evidenced by the completion of the transaction
contemplated hereby.
The parties hereto will have previously forwarded all necessary Closing
documents to the other party's attorneys at such addresses pending the Closing.
The date of the Closing is hereinafter referred to as the "Closing Date."
6. Section 2.2 of the Purchase Agreement is amended to read in its entirety
as follows:
2.2 DELIVERY. At the Closing, Seller shall deliver the following items
into escrow pursuant to the terms of an escrow agreement substantially in the
form annexed to and made a part of this Agreement as Exhibit B (the "Escrow
Agreement): an assignment of claims and lease (as to the unpatented claims and
leases comprising a portion of the Properties) in substantially the form
annexed to and made a part of this Agreement as Exhibit C and a deed (as to the
patented claims comprising a portion of the Properties and the lease) in
substantially the form annexed to and made a part of this Agreement as Exhibit
D. At the Closing, Buyer shall: (i) deliver into escrow pursuant to the terms
of the Escrow Agreement eight stock certificates in 50,000 share increments
(400,000 shares in total) and (ii) deliver directly to Seller, and not as part
of the escrow provided by the Escrow Agreement, three additional certificates
aggregating 125,000 shares; such certificates collectively shall constitute
the Base Purchase Price. The Escrow Agreement shall provide for the release of
the items deposited into escrow to Buyer and Seller, as the case may be, upon
the effective date of the registration statement specified in Section 1.4, or
such earlier date upon Seller's written request.
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7. Section 3.1 of the Purchase Agreement is amended to read in its entirety
as follows:
3.1 KNOWLEDGE, SOPHISTICATION AND INVESTMENT INTENT. Seller and its
board of directors or other controlling persons have such knowledge and
information concerning the business and affairs of Buyer, and its financial and
operating condition, that they are capable of fully evaluating the merits and
risks associated with the acquisition of the Shares (and any Additional Shares,
if required to be issued) in consideration for the Properties. Seller or its
representatives have had the opportunity to ask questions of, and receive
answers from, representatives of Buyer with respect to such matters, and on or
prior to the Closing Date, shall have been furnished with copies of all
information requested by Seller concerning the condition, financial or
otherwise, of Buyer.
Seller understands and acknowledges that its acquisition of the Shares
(and any Additional Shares, if required to be issued) has not been registered
under the Securities Act or under certain state securities laws, in reliance
upon certain exemptions for transactions not involving a public offering, and
that the Shares (and any Additional Shares) must be held indefinitely unless
sold pursuant to an offering registered under the Securities Act and under
certain state securities laws, or unless an exemption from registration is
available. Seller is acquiring the Shares (and any Additional Shares, if
required to be issued) for investment purposes only, and not with a view toward
immediate resale or further distribution.
8. Exhibit B is amended to delete reference to the options and is superseded
in its entirety by the form of escrow agreement annexed hereto.
9. Exhibit E to the Purchase Agreement is deleted in its entirety.
No other agreements, terms or conditions of the Purchase Agreement shall be
affected by this Amendment, and all such agreements, terms and conditions shall
continue in full force and effect, as if fully set forth herein.
Executed and effective as of the date first above written.
SELLER: TABOR RESOURCES CORPORATION, a Minnesota corporation
By: Joel Ronning
-----------------------------
duly authorized officer
BUYER: HANOVER GOLD COMPANY, INC., a Delaware corporation
By: James A. Fish
----------------------------
its duly authorized officer
Subject to the limitation set forth in subparagraph 6.3 of the Purchase
Agreement, Tech Squared, Inc., a Minnesota corporation, hereby guarantees the
payment of any obligation of Tabor Resources Corporation, its wholly-owned
subsidiary, under the terms of the Purchase Agreement as hereby amended.
TECH SQUARED, INC., a Minnesota corporation
By: Joel Ronning
----------------------------
its duly authorized officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the
Company's consolidated, unaudited financial statements for the period ended
March 31, 1996, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 341,244<F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 29,494
<CURRENT-ASSETS> 370,738
<PP&E> 7,722,297<F2>
<DEPRECIATION> 47,165
<TOTAL-ASSETS> 8,946,598
<CURRENT-LIABILITIES> 251,420
<BONDS> 0
0
0
<COMMON> 1,430
<OTHER-SE> 8,695,178<F3>
<TOTAL-LIABILITY-AND-EQUITY> 8,946,598
<SALES> 3,511
<TOTAL-REVENUES> 3,511
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 303,733<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 896
<INCOME-PRETAX> (299,326)
<INCOME-TAX> 0
<INCOME-CONTINUING> (299,326)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (299,326)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
<FN>
<F1>Includes $76,243 of prepaid expenses.
<F2>Consists of $7,585,027 in resource properties and claims, and $137,270 in
property and equipment.
<F3>Consists of $13,318,373 of additional paid-in capital, less deficit of
$4,624,625 accumulated during development stage.
<F4>Consists of general and administrative expenses.
</FN>
</TABLE>
