LSMG Lode Star Mining Inc (PK)

On December 28, 2021, Lode-Star Mining Inc., a Nevada corporation (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Sapir Pharmaceuticals, Inc., a Delaware corporation (“Sapir”), pursuant to which the Company purchased from Sapir all of its assets used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule for further pharmaceutical development (the “Business”). The closing of the transaction occurred simultaneous with the execution and delivery of the Purchase Agreement on December 28, 2021.

The purchase price for the Business paid by the Company was the issuance to Sapir of one million shares of Series A Convertible Preferred Stock (the “Preferred Stock”), valued at a price of $1.00 per share. The Preferred Stock is convertible to shares of the common stock of the Company at a conversion rate of 450 shares of Preferred Stock to each share of common stock. Each share of the Preferred Stock entitles Sapir to 450 votes for each share of stock. Any amendment to the Certificate of Designation designating the rights and preferences of the Preferred Stock requires the consent of the holders of at least two-thirds of the shares of Preferred Stock then outstanding.

Pursuant to the terms of the Purchase Agreement, Sapir, as the holder of the Preferred Stock, agreed that until December 28, 2022, without the prior written consent of the holders of a majority of the common stock of the Company issued and outstanding immediately prior to the closing, it will not (i) cause the Company to effect more than one reverse stock split; (ii) issue any additional shares of Preferred Stock or rights to acquire the same or (iii) create any new series of preferred stock.

At the closing, the parties also executed and delivered a royalty agreement (the “Royalty Agreement”) pursuant to which the Company shall pay Sapir a royalty equal to five percent (5%) of the gross revenues realized from licenses or products generated or derived from the Business, including all license and/or sublicense fees, development and/or research fees, grants, joint ventures and other royalty payments received directly or indirectly by the Company. The royalty is due each quarter commencing when the Company first receives revenues generated by the Business. The royalty is to be paid for 5 years from the first date that initial proceeds are received by the Company directly or indirectly from the Business, and is automatically extended for a single additional 5-year period unless terminated in accordance with the terms of the Royalty Agreement.

The foregoing descriptions of the Purchase Agreement, the Royalty Agreement and the Preferred Stock are not complete and are qualified in their entirety by reference to the full text of such documents, copies of which are attached hereto as Exhibits 10.1, 10.2 and 4.1, respectively, and incorporated herein by reference.