Attached files
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EX-99.1 - PRESS RELEASE - General Moly, Inc | gmo_ex991.htm |
EX-10.2 - RESTRUCTURING SUPPORT AGREEMENT - General Moly, Inc | gmo_ex102.htm |
EX-10.1 - DEBTOR-IN-POSSESSION CREDIT AGREEMENT - General Moly, Inc | gmo_ex101.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Earliest Event Reported: November
16, 2020
General Moly, Inc.
(Exact name of registrant as specified in its charter)
Delaware
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001-32986
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91-0232000
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(State or other jurisdictionof incorporation)
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(Commissionfile number)
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(IRS employeridentification no.)
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1726 Cole Blvd., Suite 115
Lakewood, CO 80401
(Address of principal executive offices, including zip
code)
(303) 928-8599
(Registrant’s telephone number, including area
code)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2
below):
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 210.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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Common Stock, par value $0.001 per share
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GMO
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Toronto Stock Exchange
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter)
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item
1.01
Entry
into a Material Definitive Agreement.
The
information set forth below under Item 1.03 of this Current Report
on Form 8-K regarding the DIP Credit Agreement and the
Restructuring Support Agreement (each as defined below) is
incorporated herein by reference.
Item
1.03
Bankruptcy
or Receivership.
Chapter 11 Filing
On
November 18, 2020 (the “Petition Date”), General Moly,
Inc. (the “Company” or the “Debtor”) filed
a voluntary petition (the “Chapter 11 Petition”) under
chapter 11 of the United States Bankruptcy Code (the
“Bankruptcy Code”) in the United States Bankruptcy
Court for the District of Colorado (the “Bankruptcy
Court”). The Debtor’s chapter 11 case is captioned
“In re: General Moly,
Inc.” and was assigned case number 20-17493-EEB (the
“Chapter 11 Case”).
The
Debtor filed motions with the Bankruptcy Court seeking
authorization to continue to operate its business as a
“debtor-in-possession” under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code and orders of the Bankruptcy Court. To
ensure its ability to continue operating its businesses, the Debtor
is seeking approval of the Bankruptcy Court of a variety of
“first day” motions, including motions to obtain
customary relief intended to ensure the Debtor’s ability to
continue its ordinary operations after the filing date, approve a
debtor-in-possession credit facility in an aggregate principal
amount of $1,400,000, and set a timeline for the Chapter 11 Case,
culminating in confirmation of a plan of reorganization by February
12, 2021.
DIP Credit Agreement
On
November 18, 2020 and prior to the filing of the Chapter 11
Petition, the Company entered into a Debtor-In-Possession Credit
Agreement (the “DIP Credit Agreement”) with New Moly
LLC, as agent and minority lender, and Bruce D. Hansen and Bong T.
Hansen, as minority lenders (collectively, the “DIP
Lenders”) pursuant to which, and subject to the satisfaction
of certain customary conditions, including the approval of the
Bankruptcy Court, the DIP Lenders have agreed to provide the
Company with a credit facility (the “DIP Facility”) in
an aggregate principal amount of $1,400,000.
The DIP
Facility includes conditions precedent, representations and
warranties, affirmative and negative covenants and events of
default customary for financings of this type and size. Pursuant to
the DIP Credit Agreement, initial funding of $400,000 under the DIP
Facility will be made upon satisfaction of certain conditions,
including entry of an interim order by the Bankruptcy Court
approving the DIP Facility on an interim basis, with further
funding to be advanced based on additional specified milestones.
The DIP Facility will be used to fund working capital and general
corporate requirements of the debtor (including ongoing operations,
legal fees, accounting/reporting costs and D&O insurance)
bankruptcy-related costs and expenses (including interest, fees,
and expenses), and other payments required under the chapter 11
reorganization plan.
The
foregoing description of the DIP Credit Agreement and the DIP
Facility is not complete and is qualified in its entirety by
reference to the full text of the DIP Credit Agreement, a copy of
which is filed herewith as Exhibit 10.1 and is incorporated herein
by reference.
Restructuring Support Agreement
On
November 18, 2020, the Company entered into a Restructuring Support
Agreement (the “Restructuring Support Agreement”) with
the DIP Lenders, certain of its bondholders (the “Consenting
Bondholders”) and other related parties (the
“Additional RSA Support Parties”). The Restructuring
Support Agreement contemplates agreed-upon terms for a pre-arranged
chapter 11 plan of reorganization (the
“Plan”).
Under
the Restructuring Support Agreement, the Consenting Bondholders
have agreed, subject to certain terms and conditions, to support a
financial restructuring (the “Restructuring”) of the
existing debt of, existing equity interests in, and certain other
obligations of the Company, pursuant to the Plan to be filed in the
Chapter 11 Case.
The
Plan will be based on the restructuring term sheet attached to and
incorporated into the Restructuring Support Agreement (the
“Plan Term Sheet”) (such transactions described in, and
in accordance with the Restructuring Agreement and the Plan Term
Sheet, the “Restructuring Transactions”), which, among
other things, contemplates:
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conversion of the
Debtor’s obligations to the DIP Lenders into common equity in
the reorganized Debtor;
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an election by
bondholders with claims in aggregate of less than $50,000 to
receive 75% of the aggregate amount of their allowed claims in cash
or by distribution of common equity in the reorganized
Debtor;
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receipt by
bondholders with claims aggregating $50,000 or more of 75% of the
aggregate amount of their allowed claims by distribution of common
equity in the reorganized debtor;
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receipt by trade
creditors of 75% of the aggregate amount of their allowed claims in
cash upon the effective date of the Plan;
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treatment for
allowed claims of the Debtor’s employees;
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cancellation of
issued and outstanding preferred and common stock of the
Company;
●
the negotiation of
definitive documentation for the amendment and modification of that
Lease Agreement dated effective October 19, 2005 between Mount Hope
Mines, Inc., as lessor, and the Company, as lessee, as amended and
assigned to Eureka Moly, LLC (“Eureka Moly”) for the
lease of certain real property and associated mineral rights, as
contemplated in a lease amendment term sheet attached to and
incorporated into the Restructuring Support Agreement;
●
the sale of Eureka
Moly assets, deferral of certain returns on capital contributions,
and other agreements with POS-Minerals Corporation
(“POSCO”) , as contemplated in a term sheet with POSCO
attached to and incorporated into the Restructuring Support
Agreement;
●
the formation of
New Moly LLC, pursuant to the terms set forth in an operating
agreement term sheet attached to and incorporated into the
Restructuring Support Agreement;
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the
contribution of shares by the equity holders of the reorganized
Debtor to New Moly in exchange for equity in New Moly and Avanti
Kitsault Mine Ltd.’s contribution to New Moly of its 100%
direct interest in the Kitsault molybdenum mine, a previously
producing primary molybdenum mine located in northern British
Columbia, in exchange for equity in New
Moly;
●
the filing by the
Company of the Plan and associated disclosure statement with the
Bankruptcy Court on or before December 4, 2020;
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the entry into
definitive documentation for the Restructuring Transactions and
approval of the Plan disclosure statement on or before January 6,
2021; and
●
the Company
obtaining confirmation of the Plan, which shall be on terms
consistent with the Restructuring Support Agreement and the Term
Sheet, no later than February 12, 2021.
In
accordance with the Restructuring Support Agreement, the Consenting
Bondholders agreed, among other things, to: (i) support the
Restructuring Transactions as contemplated by, and within the
timeframes outlined in, the Restructuring Support Agreement and the
definitive documents governing the Restructuring Transactions; (ii)
not take any action, directly or indirectly, that is reasonably
likely to interfere with acceptance, implementation, or
consummation of the Restructuring Transactions; (iii) vote each of
its claims against the Company to accept the Plan; and (iv) not
transfer any claims against the Company held by each Consenting
Bondholder except with respect to limited and customary exceptions,
including requiring any transferee to either already be bound or
become bound by the terms of the Restructuring Support
Agreement.
In
accordance with the Restructuring Support Agreement, the Company
agreed, among other things, to: (i) act in good faith and use
commercially reasonable efforts to support and successfully
complete the solicitation of votes to approve the Plan, in
accordance with the terms of the Restructuring Support Agreement;
(ii) negotiate in good faith the definitive documents governing the
Restructuring Transactions, and any amendments and modifications
thereto as may be reasonably necessary and appropriate to obtain
entry of a Bankruptcy Court order confirming the Plan; and (iii) do
all things reasonably necessary and appropriate in furtherance of
confirming the Plan and consummating the Restructuring in
accordance with, and within the time frames contemplated by, the
Restructuring Support Agreement, in each case to the extent
consistent with, upon the advice of counsel, the fiduciary duties
of the board of directors of General Moly.
The
Restructuring Support Agreement may be terminated upon the
occurrence of certain events, including:
●
the failure to meet
specified milestones related to (a) the solicitation of votes to
approve the Plan, (b) entry of orders relating to the DIP Facility,
(c) filing of the Plan and Plan disclosure statement, (d) entry
into definitive documentation relating to the Restructuring
Transactions, (e) confirmation of the Plan, or (f) consummation of
the Plan;
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appointment of an
examiner or trustee; and
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conversion of the
Chapter 11 Case to a case under chapter 7 of the Bankruptcy
Code.
The
foregoing description is not complete and is qualified in its
entirety by reference to the full text of the Restructuring Support
Agreement, a copy of which is filed herewith as Exhibit 10.2 and is
incorporated herein by reference.
Item
2.03
Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The
information set forth above under Item 1.03 of this Current Report
on Form 8-K regarding the DIP Credit Agreement is incorporated
herein by reference.
Item
2.04
Triggering
Events That Accelerate or Increase a Direct Financial Obligation or
an Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.
The
filing of the Chapter 11 Petition constitutes an event of default
that accelerated the Company’s obligations under its
outstanding 12% Senior Promissory Notes due 2022 and 13% Senior
Promissory Notes due 2022 (collectively, the “Senior
Notes”). As of the Petition Date, the Company had an
aggregate of $8.2 million of Senior Notes outstanding.
In
addition, the Company’s outstanding Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock become
mandatorily redeemable on the date the Senior Notes become due and
payable. The redemption price is the original issue price of $100
per share, plus accrued and unpaid dividends. As of the Petition
Date, the Company had 9,000 shares of Series A Convertible
Preferred Stock outstanding and 4,000 shares of Series B
Convertible Preferred Stock outstanding.
Pursuant to Section
362 of the Bankruptcy Code, the filing of the Chapter 11 Petition
automatically stayed most actions against the Debtor, including
actions to collect indebtedness incurred prior to the Petition Date
or to exercise control over the Debtor’s property. Subject to
certain exceptions under the Bankruptcy Code, the filing of the
Chapter 11 Petition also automatically stayed the continuation of
most legal proceedings or the filing of other actions against or on
behalf of the Debtor or its property to recover on, collect or
secure a claim arising prior to the Petition Date or to exercise
control over property of the Debtor’s bankruptcy estates,
unless and until the Bankruptcy Court modifies or lifts the
automatic stay as to any such claim. Notwithstanding the general
application of the automatic stay described above, governmental
authorities may determine to continue actions brought under their
police and regulatory powers.
Item
3.01
Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
November 17, 2020, Company received a letter from the Toronto Stock
Exchange (the “TSX”), indicating that trading of the
Company’s common stock on the TSX had been suspended pending
a review of the eligibility for continued listing of the
Company’s common stock. The TSX notified the Company that its
Continued Listing Committee will meet on November 26, 2020 to
consider whether or not to delist the Company’s common stock
pursuant to the TSX’s delisting criteria relating to
insolvency or bankruptcy proceedings (Section 708) and financial
condition and/or operating results (Sections 709 and
710(a)(i)).
The OTC
Pink Open Market also halted trading in the Company’s common
stock on November 17, 2020.
Item
5.02
Departure
of Directors or Certain Officers; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On
November 16, 2020, each of Mark A. Lettes and Gary A. Loving
resigned from their positions as directors of the Company,
effective upon the filing of the Chapter 11 Petition.
On
November 18, 2020, Bruce D. Hansen, the Chief Executive Officer and
Chief Financial Officer and a director of the Company, have been
separated from his positions as a director and officer of the
Company, and Robert I. Pennington, the Company’s Chief
Operating Officer, have been separated from his position as an
officer of the Company, effective upon the filing of the Chapter 11
Petition.
On
November 18, 2020, Thomas M. Kim of r2 Advisors, LLC, the
Company’s Chief Restructuring Officer since September 2020,
was also named as Interim Chief Executive Officer of the Company,
effective upon the filing of the Chapter 11 Petition. Mr. Kim, 58,
is the managing director of r² Advisors LLC, which he founded
in 2004, and has worked in the turnaround or insolvency industry
since 1988. He has been involved with troubled companies as a
bankruptcy lawyer, business analyst and as a turnaround
practitioner. Prior to founding r² Advisors LLC, he was an
originator and asset manager with Republic Financial Corporation, a
private investment company based in Denver, where he recovered
troubled loans and performed valuations of distressed companies
from an investor’s perspective. Prior to Republic, Mr. Kim
was an attorney with LeBoeuf, Lamb, Greene & MacRae, LLP, where
he practiced bankruptcy and corporate law. He holds a Bachelor of
Science in economics from the University of Utah and a J.D. and MBA
from the School of Law and the School of Business Administration at
Santa Clara University.
On
November 19, 2020, Siong Tek (“Terry”) Lee notified the
Company of his resignation from the board of directors, effective
immediately.
Item
7.01
Regulation
FD Disclosure.
On
November 18, 2020, the Company issued a press release in connection
with the filing of the Chapter 11 Petition. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated by
reference herein.
The
Company cautions that trading in the Company’s securities
(including, without limitation, its common stock) during the
pendency of the Chapter 11 Petition is highly speculative and poses
substantial risks. Trading prices for the Company’s
securities may bear little or no relationship to the actual
recovery, if any, by holders of the Company’s securities in
the Chapter 11 Petition.
Court
filings and other documents related to the court-supervised process
are available at https://cases.stretto.com/generalmoly, or by
calling the Company’s claims agent, Stretto, at
(855) 435-7795 (toll-free) or (949) 358-6802 (international)
or by sending an email to TeamGeneralMoly@stretto.com.
The
information furnished in this Item 7.01 of this Current Report on
Form 8-K and the press release attached hereto as Exhibit 99.1
shall not be deemed “filed” for the purposes of Section
18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of such section, and shall not be deemed
to be incorporated by reference into the filings of the Company
under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.
Item
9.01
Financial
Statements and Exhibits.
(d) Exhibits
Exhibit
No.
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Description
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Debtor-In-Possession
Credit Agreement dated as of November 18, 2020, by and among
General Moly, Inc. and the DIP Lenders.
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Restructuring
Support Agreement dated as of November 18, 2020, by and among
General Moly, Inc., the DIP Lenders, the Consenting Bondholders and
the Additional RSA Support Parties.
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Press
Release of General Moly, Inc. dated November 18, 2020.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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GENERAL MOLY,
INC.
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Date: November 20,
2020
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By:
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/s/ Thomas M.
Kim
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Thomas M.
Kim
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Interim Chief
Executive Officer
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