UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
(Mark One)
| x | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2015.
OR
| ¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File Number 000-30995
SEARCHLIGHT MINERALS CORP.
(Name of registrant as specified in its charter)
| Nevada | 98-0232244 |
| State or other jurisdiction of incorporation or organization | I.R.S. Employer Identification Number |
| #100 - 2360 West Horizon Ridge Pkwy. | |
| Henderson, Nevada | 89052 |
| Address of principal executive offices | Zip Code |
| (702) 939-5247 | |
| Registrant’s telephone number, including area code | |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001
Common Stock Purchase Rights
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x
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 that 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 ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer ¨ | Accelerated filer ¨ |
| Non-accelerated filer ¨ | Smaller reporting company x |
| (Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2015 (106,718,331 shares) was approximately $26,679,583 (computed based on the closing sale price of the common stock at $0.25 per share as of such date). Shares of common stock held by each officer and director and each person owning more than ten percent of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of the affiliate status is not necessarily a conclusive determination for other purposes.
The number of shares of common stock of the issuer outstanding as of April 22, 2016 was 286,310,744 shares.
FORM 10-K/A
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report of Searchlight Minerals Corp. on Form 10-K/A, or this Form 10-K/A, amends our Annual Report on Form 10-K for the year ended December 31, 2015 (the “Original Form 10-K”), which was originally filed with the Securities and Exchange Commission (the “SEC”) on April 5, 2016. This Form 10-K/A is being filed for the sole purpose of providing information required by Part III of Form 10-K that was not included in the Original Form 10-K.
Except as expressly noted herein, this Form 10-K/A does not modify or update in any way the disclosures made in the Original Form 10-K and does not reflect events occurring after the filing of the Original Form 10-K.
As used in this Form 10-K/A, “Searchlight,” “Company,” “we,” “us” and “our” refer to Searchlight Minerals Corp. and its consolidated subsidiaries, principally Clarkdale Minerals LLC, a Nevada limited liability company, and Clarkdale Metals Corp., a Nevada corporation.
TABLE OF CONTENTS
PART III
Item 10. Directors, Executive Officers and Corporate Governance
General Information
The following sets forth certain information with respect to the individuals who currently serve as members of the Board of Directors (the “Board”) of the Company as of the date of this filing:
Our bylaws provide that the terms of office of the members of our Board be divided into three classes, Class I, Class II and Class III, the members of which serve for staggered three-year terms. The terms of the current Class I, Class II and Class III directors are set to expire at the next annual meeting of stockholders for the 2017, 2016 and 2018 years, respectively. At each annual meeting of stockholders, directors chosen to succeed those whose terms then expire are elected for a term of office expiring at the third succeeding annual meeting of stockholders after their election or until their successors are elected and qualify, subject to their prior death, resignation or removal. Our Board presently consists of five directors. None of our directors or executive officers is related to one another.
Our Board members are encouraged to attend meetings of the Board and the annual meeting of stockholders. The Board held 14 meetings during 2015. Officers serve at the discretion of the Board.
The following table sets forth certain biographical information with respect to our directors and executive officers:
| Name | Position | Age | ||
| Martin B. Oring | Director (Class III), Chairman of the Board, Chief Executive Officer and President | 70 | ||
| Carl S. Ager | Director (Class II), Vice President, Secretary and Treasurer | 41 | ||
| John E. Mack | Director (Class II) | 68 | ||
| Michael W. Conboy | Director (Class I) | 40 | ||
| Jordan M. Estra | Director (Class I) | 68 |
Martin B. Oring, Director, Chairman of the Board, President and Chief Executive Officer. Mr. Oring has been a member of our Board since October 6, 2008 and our Chairman of the Board, President and Chief Executive Officer since October 1, 2010. Mr. Oring has been a member of the board of directors of Eos Petro, Inc. since October 12, 2012, and served as its Chief Executive Officer from June 2013 through January 2016. Mr. Oring, a senior financial/planning executive, has served as the President of Wealth Preservation, LLC, a financial advisory firm that serves high-net-worth individuals, since 2001. Since the founding of Wealth Preservation, LLC in 2001, Mr. Oring has completed the financial engineering, structuring, and implementation of over $1 billion of proprietary tax and estate planning products in the capital markets and insurance areas for wealthy individuals and corporations. From 1998 until 2001, Mr. Oring served as Managing Director, Executive Services at Prudential Securities, Inc., where he was responsible for advice, planning and execution of capital market and insurance products for high-net-worth individuals and corporations. From 1996 to 1998, he served as Managing Director, Capital Markets, during which time he managed Prudential Securities’ capital market effort for large and medium-sized financial institutions. From 1989 until 1996, he managed the Debt and Capital Management group at The Chase Manhattan Corporation as Manager of Capital Planning (Treasury). Prior to joining Chase Manhattan, he spent approximately eighteen years in a variety of management positions with Mobil Corporation, one of the world’s leading energy companies. When he left Mobil in 1986, he was Manager, Capital Markets & Investment Banking (Treasury). Mr. Oring is also currently a director and chief executive officer of PetroHunter Energy Corporation, and was previously a director of Parallel Petroleum Corporation, each of which is a publicly traded oil and gas exploration and production company. He also served as a director of Falcon Oil & Gas Australia Limited, a subsidiary of Falcon Oil & Gas Ltd., an international oil and gas exploration and production company, headquartered in Dublin, Ireland, which trades on the TSX Venture Exchange. Mr. Oring has served as a Lecturer at Lehigh University, the New York Institute of Technology, New York University, Xerox Corporation, Salomon Brothers, Merrill Lynch, numerous Advanced Management Seminars, and numerous in-house management courses for a variety of corporations and organizations. He has an MBA Degree in Production Management, Finance and Marketing from the Graduate School of Business at Columbia University, and a B.S. Degree in Mechanical Engineering from Carnegie Institute of Technology. As a financial planner and an executive with experience in banking and finance, we believe that Mr. Oring contributes his leadership skills, knowledge and finance background, and business experience to our Board. In addition, we believe that Mr. Oring’s membership on our Board helps to achieve the objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
Carl S. Ager, Director, Vice President, Secretary and Treasurer. Mr. Ager has been a member of our Board since July 25, 2005 and our Vice President, Secretary and Treasurer since October 7, 2005. In 1997, Mr. Ager obtained his Bachelor of Applied Sciences – Engineering Geophysics degree from Queen’s University in Kingston, Ontario. Since January, 2003, Mr. Ager has been President of CSA Management Corp, a private Nevada corporation which provides consulting services, including business planning and administration. However, CSA has not had active operations since 2005. Mr. Ager also served as Vice President and a director of Nanominerals from June 2003 until June 2007. Prior to joining Nanominerals and CSA Management, Mr. Ager’s experience included working as an investment executive for Scotia McLeod, one of Canada’s leading full-service brokerage firms (2000-2002). As an engineer and an executive with experience in working with natural resource companies, we believe that Mr. Ager contributes his leadership skills, knowledge, finance and technology background, and business experience to our Board. In addition, we believe that Mr. Ager’s membership on our Board helps to achieve the objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
John E. Mack, Director. Mr. Mack has over 35 years of international banking and financial business management experience. From November 2002 through September 2005, Mr. Mack served as Senior Managing Executive Officer and Chief Financial Officer of Shinsei Bank, Limited in Tokyo, Japan. Prior to joining Shinsei Bank and for more than twenty-five years, Mr. Mack served in senior management positions at Bank of America and its predecessor companies, including twelve years as Corporate Treasurer. Since 2006, Mr. Mack has been retired and has served as a director in several companies. Mr. Mack is a member of the board of directors of Flowers National Bank, Incapital Holdings LLC and Medley Capital Corporation, and is Vice-Chairman and a director of Islandsbanki hf located in Reykjavik, Iceland. Mr. Mack holds an MBA from the University of Virginia Darden School of Business and received his bachelor's degree in economics from Davidson College. Mr. Mack is a “Financial Expert” in accordance with SEC and exchange listing audit committee requirements. In determining Mr. Mack’s qualifications to serve on our Board, the Board has considered, among other things, his experience and expertise in finance, accounting and management. In addition, we believe that Mr. Mack’s membership on our Board helps to achieve the objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
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Michael W. Conboy, Director. Mr. Conboy has been a member of our Board since October 26, 2010. Since 2003, Mr. Conboy has worked at Luxor Capital Group, LP, an investment management firm based in New York, New York, and currently serves as its Director of Research. Luxor Capital Group, LLC is one of the Company’s principal stockholders. From 2000-2003, Mr. Conboy worked as a distressed investments analyst at ING in New York and London for ING’s internal proprietary desk, where he was actively involved in numerous restructurings. Since 2010, he also has served as the Chairman of the board of directors of CML Metals Corp., which is focused on redeveloping the Comstock/Mountain Lion iron ore mine in southwestern Utah. Mr. Conboy also serves as a director of Innovate Loan Servicing Corporation, a finance company focused on the subprime auto loan sector. Mr. Conboy earned his B.S. in Business Administration from Georgetown University. As an investment banker and an executive with experience in working with natural resource companies, we believe that Mr. Conboy contributes his leadership skills, knowledge, finance and industry background, and business experience to our Board. In addition, we believe that Mr. Conboy’s membership on our Board helps to achieve the objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
Jordan M. Estra, Director. Mr. Estra has been a member of our Board since March 1, 2010. Mr. Estra is also a director of Starcore International Mines and Meadow Bay Gold, both publicly traded gold mining companies. Since July 2010, Mr. Estra has been President and Chief Executive Officer of Ensurge, Inc., a mining investment company seeking gold mining opportunities in Brazil. He became a director of Ensurge in February 2010. From May 2009 until July 2010, Mr. Estra had been the Managing Director of Private Equity at Sutter Securities Incorporated in San Francisco, California and Boca Raton, Florida, where he specializes in raising capital for emerging natural resource companies. From October 2009 through December 2009, Mr. Estra served as the Chief Executive Officer of Signature Exploration and Production Corp. From April 2007 to April 2009, Mr. Estra was a Managing Director of Investment Banking with Jesup & Lamont Securities, Inc. Mr. Estra was a Senior Vice President of Investment Banking with Dawson James Securities, Inc. from September 2006 to March 2007 and a Managing Director of Healthcare Investment Banking with Stanford Financial Group from June 2003 to September 2006. From 1986 to 2003, Mr. Estra held senior research and/or investment banking positions with a number of brokerage and investment banking firms. From 1971 to 1986, Mr. Estra held various positions in finance, corporate strategic planning and marketing with AMAX, Inc., a global natural resources leader with interests in precious metals, copper, lead, zinc, coal, oil and gas, molybdenum, tungsten and iron ore. He served as Assistant to the Chairman and was Vice President of Marketing and Strategic Planning when he resigned in 1986 to pursue a career on Wall Street. Mr. Estra graduated with High Distinction from Babson College with a degree in International Economics and with Honors from the Columbia University Graduate School of Business with an MBA in Finance. He holds Series 7, 24, 63, 86 and 87 securities licenses. As an investment banker and an executive with experience in working with natural resource companies and as an Audit Committee financial expert, we believe that Mr. Estra contributes his leadership skills, knowledge, finance and technology background, and business experience to our Board. In addition, we believe that Mr. Estra’s membership on our Board helps to achieve the objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
Consultants
Nanominerals is a private Nevada corporation principally engaged in the business of mineral exploration. We have engaged Nanominerals as a consultant to provide us with the use of its laboratory, instrumentation, milling equipment and research facilities, which has allowed us to perform tests and analysis both effectively and in a more timely manner than would otherwise be available from other such consultants. Dr. Charles A. Ager performs the services for us in his authorized capacity with Nanominerals under our consulting arrangement with Nanominerals. Carl S. Ager, our Vice President, Secretary and Treasurer, is the son of Dr. Ager. Dr. Ager currently is the sole officer and director of Nanominerals, and controls its day to day operations. The following sets forth certain biographical information with respect to Dr. Ager:
Dr. Charles A. Ager is a geophysical engineer with approximately 40 years of experience in the areas of mining discovery and production. He is a registered geophysicist in the State of California and a registered professional engineer and professional geoscientist in British Columbia, Canada. Dr. Ager received a PhD degree in geophysics from the University of British Columbia in 1974 and a Master’s of Science degree from the University of British Columbia in 1972. He received his undergraduate degree in mathematics and physics from California State University, Sacramento in 1968. Dr. Ager has been associated with Nanominerals from 1988 until present. Dr. Ager was the Chairman of ABM Mining Group from 1979 until 1988, when it was acquired by Northgate Mining. ABM Mining Group was involved in providing technical and financial assistance in building and operating medium sized mining companies. Project duties included property acquisition, exploration, permitting, development, production and finance. Dr. Ager also was the President of the Ager Group of Geotechnical Companies from 1968 to 1979. The Ager Group of Geotechnical Companies was involved in providing technical and financial assistance for exploration and development projects in Canada, the United States, Africa and the Far East. Project work included the use of water, ground and air surveys in the exploration for oil and gas, coal, industrial minerals and base and precious metals. Dr. Ager is a member of the Association of Professional Engineers and Geoscientists of British Columbia, Canada, the Society of Exploration Geophysicists and the Society of Mining, Metallurgy and Exploration.
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Director Qualifications
We believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business or banking. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties for us. Each director must represent the interests of all stockholders. When considering potential director candidates, the Board also considers the candidate’s character, judgment, age and skills, including financial literacy and experience in the context of our needs and the needs of the Board. In addition to considering an appropriate balance of knowledge, experience and capability, the Board has as an objective that its membership be composed of experienced and dedicated individuals with diversity of backgrounds, perspectives, skills and other individual qualities that contribute to Board heterogeneity.
Independent Directors; Review, Approval or Ratification of Transactions with Related Persons
We currently have five members on our Board. We believe that each of John E. Mack, Michael W. Conboy and Jordan M. Estra is independent under the criteria established by Section 803A of the NYSE Amex LLC (“AMEX”) Company Guide for director independence, but that neither of the remaining two members are independent. The AMEX criteria include various objective standards and a subjective test. A member of the Board is not considered independent under the objective standards if, for example, he or she is employed by us. Mr. Oring and Mr. Ager are not independent because they are our employees. The subjective test requires that each independent director not have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. We considered commercial, financial services, charitable, and other transactions and other relationships between us and each director and his or her family members and affiliated entities.
For Messrs. Mack, Conboy and Estra, we believe that each did not have any transactions or other relationships which would have exceeded the AMEX objective standards or would otherwise interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
With respect to our other two directors, we believe that we have ongoing business relationships with these directors or their affiliates which would not satisfy the AMEX subjective standards regarding the exercise of independent judgment in carrying out the responsibilities of a director.
We have ongoing business relationships with affiliates of our management and principal stockholders. In particular, we have continuing obligations under the agreements under which we acquired the assets relating to our Clarkdale Slag Project. We remain obligated to pay a royalty which may be generated from the operations of the Clarkdale Slag Project with Nanominerals, one of our principal stockholders, which is an affiliate of a member of our executive management and Board, Carl S. Ager. In addition, Martin B. Oring, our President and Chief Executive Officer and a member of our Board, serves as a consultant to Ireland Inc. These persons are subject to a fiduciary duty to exercise good faith and integrity in handling our affairs. However, the existence of these continuing obligations may create a conflict of interest between us and all of our Board members and senior executive management, and any disputes between us and such persons over the terms and conditions of these agreements that may arise in the future may raise the risk that the negotiations over such disputes may not be subject to being resolved in an arms’ length manner. In addition, Nanominerals’ interest in Ireland, Inc. and its other mining related business interests may create a conflict of interest between us and our Board members and senior executive management who are affiliates of Nanominerals.
Because we currently have only three independent directors, the existence of these continuing obligations to our affiliates may create a conflict of interest between us and our non-independent Board members and senior executive management, and any disputes between us and such persons over the terms and conditions of these agreements that may arise in the future may raise the risk that the negotiations over such disputes may not be subject to being resolved in an arms’ length manner. We intend to make good faith efforts to recruit independent persons to our Board. We intend to evaluate the independence of each of our directors in connection with the preparation of the proxy statement for our next annual meeting of stockholders.
Although we only have three independent directors, the Board has adopted a written Related Person Transactions Policy, which describes the procedures used to identify, review, approve and disclose, if necessary, any transaction or series of transactions in which: (i) we were, are or will be a participant, (ii) the amount involved exceeds $120,000, and (iii) a related person had, has or will have a direct or indirect material interest. There can be no assurance that the above conflicts will not result in adverse consequences to us and the interests of the other stockholders.
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Although our management intends to avoid situations involving conflicts of interest and is subject to a Code of Ethics, there may be situations in which our interests may conflict with the interests of those of our management or their affiliates. These could include:
| · | competing for the time and attention of management, |
| · | potential interests of management in competing investment ventures, and |
| · | the lack of independent representation of the interests of the other stockholders in connection with potential disputes or negotiations over ongoing business relationships. |
Committees of the Board of Directors
Audit Committee. We have an Audit Committee and an Audit Committee charter. Our Audit Committee is presently comprised of Michael W. Conboy, Jordan M. Estra and John E. Mack. Mr. Mack is the Chairman of the Audit Committee. Each of Messrs. Conboy, Estra and Mack is an independent director. We believe that each of Messrs. Estra and Mack qualifies as an “audit committee financial expert” under Item 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”). On September 8, 2006, we adopted a revised Audit Committee charter and a whistle blower policy. The purpose of the amendments to the Audit Committee charter is to expand on the role of the Audit Committee’s relationship with external auditors and the primary committee responsibilities. The purpose of the whistle blower policy is to encourage all employees to disclose any wrongdoing that may adversely impact us, our stockholders, employees, investors, or the public at large. The policy also sets forth (i) an investigative process of reported acts of wrongdoing and retaliation, and (ii) procedures for reports of questionable auditing, accounting and internal control matters from employees on a confidential and anonymous basis and from other interested third parties. A copy of our Audit Committee charter was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 27, 2006. Our Audit Committee is responsible for:
| · | selecting, hiring and terminating our independent auditors, |
| · | evaluating the qualifications, independence and performance of our independent auditors, |
| · | approving the audit and non-audit services to be performed by our independent auditors, |
| · | reviewing the design, implementation, adequacy and effectiveness of our internal controls and critical accounting policies, |
| · | overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters, |
| · | establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters, |
| · | reviewing with management and our independent auditors, any earnings announcements and other public announcements regarding our results of operations, |
| · | preparing the Audit Committee report that the SEC requires in our annual proxy statement, |
| · | engaging outside advisors, and |
| · | authorizing funding for the outside auditor and any outside advisors engaged by the Audit Committee. |
Compensation Committee. We have a Compensation Committee and have adopted a Compensation Committee charter. Our Compensation Committee assists our Board in determining and developing plans for the compensation of our officers, directors and employees. Specific responsibilities include the following:
| · | approving the compensation and benefits of our executive officers, |
| · | reviewing the performance objectives and actual performance of our officers, and |
| · | administering our stock option and other equity compensation plans. |
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Our Compensation Committee is comprised of John E. Mack, Michael W. Conboy and Jordan M. Estra. Mr. Estra is the Chairman of the Compensation Committee. Each of Messrs. Mack, Conboy and Estra is an independent director.
Nominating and Governance Committee. We have a Nominating and Governance Committee and have adopted a Nominating and Governance Committee charter. Our Nominating and Governance Committee will assist the Board by identifying and recommending individuals qualified to become members of our Board, reviewing correspondence from our stockholders, establishing, evaluating and overseeing our corporate governance guidelines, and recommending compensation plans for our directors. Specific responsibilities include the following:
| · | evaluating the composition, size and governance of our Board and its committees and making recommendations regarding future planning and the appointment of directors to our committees, |
| · | establishing a policy for considering stockholder nominees for election to our Board, |
| · | evaluating and recommending candidates for election to our Board, and |
| · | recommending and determining the compensation of our directors. |
Our Nominating and Governance Committee is comprised of Martin B. Oring, John E. Mack, Michael W. Conboy, Jordan M. Estra and Carl S. Ager. Mr. Conboy is the Chairman of the Nominating and Governance Committee. Each of Messrs. Mack, Conboy and Estra is an independent director. However, Messrs. Oring and Ager are not independent directors.
Disclosure Committee and Charter. We have a Disclosure Committee and a Disclosure Committee charter. A copy of the Disclosure Committee charter was filed as an exhibit to our Form 10-KSB filed with the SEC on April 13, 2004. The purpose of the Disclosure Committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.
Our Disclosure Committee is presently comprised of John E. Mack, Carl S. Ager, Martin B. Oring, Michael W. Conboy and Jordan M. Estra. Mr. Mack is the Chairman of the Disclosure Committee. Each of Messrs. Mack, Conboy and Estra is an independent director. However, Messrs. Oring and Ager are not independent directors.
Board Leadership Structure and Risk Oversight
Our Board has an integrated structure in which the roles of Chairman and Chief Executive Officer are combined. The Board has determined that our three non-management directors are independent. Generally, our Board structure provides that an independent lead director presides at the executive sessions of the non-management directors and at all Board meetings at which the Chairman is not present, serves as liaison between the Chairman and the independent directors, frequently communicates with the Chief Executive Officer, calls meetings of the independent directors, obtains Board member and management input, sets the agenda for the Board with the Chief Executive Officer, approves meeting schedules to assure there is sufficient time for discussion of all agenda items, works with the Chief Executive Officer to ensure that the Board members receive the right information on a timely basis, stays current on major risks and focuses the Board members on such risks, molds a cohesive board, works with the Audit Committee and Compensation Committee to evaluate Board and committee performance, facilitates communications among directors, assists in recruiting and retention for new Board members, ensures that committee structure and committee assignments are appropriate and effective, ensures outstanding governance processes, and leads discussions regarding Chief Executive Officer performance, personal development and compensation. Our former lead independent director, Martin B. Oring, became our President and Chief Executive Officer in October 2010, and, therefore, no longer is an independent director. We currently do not have a lead independent director.
The Board has had several years of successful experience with a leadership structure in which the roles of Chairman and Chief Executive Officer are combined, and has determined that this structure, together with a very active and involved group of independent directors, is most appropriate and effective for us. The Board believes that this structure promotes greater efficiency, within the context of an active and independent Board, through more direct communication of critical information from management to the Board and from the Board to management. In addition, the Chief Executive Officer’s extensive knowledge of our business uniquely qualifies him, in close consultation with our independent directors, to lead the Board in assessing risks and focusing on the issues that are most material to us.
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The Board’s involvement in risk oversight includes receiving regular reports from members of senior management and evaluating areas of material risk to us, including operational, financial, legal and regulatory, and strategic and reputational risks. The Audit Committee, pursuant to its charter, is responsible for overseeing the assessment of the business risk management process, including the adequacy of our overall control environment and controls in selected areas representing significant financial and business risk. In carrying out this responsibility, the Audit Committee regularly evaluates our risk identification, risk management and risk mitigation strategies and practices. In general, the reports identify, analyze, prioritize and provide the status of major risks to us. In addition, the Compensation Committee regularly considers potential risks related to our compensation programs. Further, the Disclosure Committee reviews the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.
Related Person Transactions Policy
On March 17, 2009, the Board adopted a written Related Person Transactions Policy, which describes the procedures used to identify, review, approve and disclose, if necessary, any transaction or series of transactions in which: (i) we were, are or will be a participant, (ii) the amount involved exceeds $120,000, and (iii) a related person had, has or will have a direct or indirect material interest. Related party transactions, which are limited to those described in this policy, are subject to the approval or ratification by the Audit Committee in accordance with this policy.
Our Code of Ethics, which applies to our directors and executive officers, including our Chief Executive Officer, Chief Financial Officer and all senior financial officers, provides that all conflicts of interest should be avoided. Pursuant to Item 404 of Regulation S-K of the Securities Act, certain transactions between the issuer and certain related persons need to be disclosed in our filings with the SEC. In addition, under Section 78.140 of the Nevada Revised Statutes, certain transactions between us and our directors and officers may need to be approved by our Board or a duly authorized committee of the Board. Finally, SEC rules require our Board to assess whether relationships or transactions exist that may impair the independence of our outside directors. The policy is intended to provide guidance and direction on related party transactions.
A “related party transaction” is any transaction directly or indirectly involving any related party that would need to be disclosed under Item 404(d) of Regulation S-K. Under Item 404(d), we are required to disclose any transaction occurring since the beginning of our last fiscal year, or any currently proposed transaction, involving us where the amount involved exceeds the lesser of $120,000 or one percent of the average of the smaller reporting company's total assets at year end for the last two completed fiscal years and in which any related person had or will have a direct or indirect material interest. “Related party transaction” also includes any material amendment or modification to an existing related party transaction.
For purposes of the policy, “related party” means any of the following:
| · | a director and any director nominee, |
| · | an executive officer, |
| · | a person known by us to be the beneficial owner of more than 5% of our common stock, |
| · | an entity which is owned or controlled by a person listed above, or an entity in which a person listed above has a substantial ownership interest or control of such entity, or |
| · | a person who is an immediate family member of any of the foregoing. |
“Immediate family member” means a child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such director, executive officer, nominee for director or beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee for director or beneficial owner.
All related party transactions are required to be disclosed to the Audit Committee of the Board and any material related party transaction are required to be disclosed to the full Board. Related party transactions will be brought to management’s and the Board’s attention in a number of ways. Each of our directors and executive officers is instructed and periodically reminded to inform the Office of the Secretary of any potential related party transactions. In addition, each such director and executive officer completes a questionnaire on an annual basis designed to elicit information about any potential related party transactions. Any potential related party transactions that are brought to our attention are analyzed by our legal department, or if none exists, our outside counsel, in consultation with management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a related party transaction requiring compliance with the policy.
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At each of its meetings, the Audit Committee will be provided with the details of each new, existing or proposed related party transaction, including the terms of the transaction, the business purpose of the transaction, and the benefits to us and to the relevant related party. In determining whether to approve a related party transaction, the Audit Committee will consider, among other factors, the following factors to the extent relevant to the related party transaction:
| · | whether the terms of the related party transaction are fair to us and on the same basis as would apply if the transaction did not involve a related party, |
| · | whether there are business reasons for us to enter into the related party transaction, |
| · | whether the related party transaction would impair the independence of an outside director, |
| · | whether the related party transaction would present an improper conflict of interests for any of our directors or executive officers, taking into account the size of the transaction, the overall financial position of the director, executive officer or related party, the direct or indirect nature of the director’s, executive officer’s or related party’s interest in the transaction and the ongoing nature of any proposed relationship, and |
| · | any other factors the Audit Committee deems relevant. |
The Audit Committee will apply these factors, and any other factors it deems relevant to its determination, in a manner that is consistent with the rules and regulations promulgated by the SEC and the objectives of the policy. Given that this list of factors is non-exclusive and, further, that the factors have not been assigned any particular level of importance with respect the other factors, the Audit Committee will have a certain amount of discretion in applying these factors. The members of the Audit Committee, however, must exercise their reasonable business judgment in making a determination regarding the transaction at issue.
As a result, the specific application of these factors will be determined by the Audit Committee on a case-by-case basis. The Audit Committee will examine each factor, both individually and collectively, in the context of our overall business and financial position, as well as our short-term and long-term strategic objectives. In doing so, the Audit Committee will look at the particular facts and circumstances of the transaction at issue, as well as the totality of the circumstances surrounding the transaction as a whole. The Audit Committee will examine the relationship of the facts and circumstances with our overall business and financial position and strategic objectives. If, as and when special or unique concerns must be addressed, the Audit Committee will take such concerns into account.
For example, regarding transactions that would impair independence, if our securities become listed on a national securities exchange that requires a certain percentage of the Board to be independent, and the Audit Committee determines that a particular transaction will impair the independence of an outside director, potentially causing us to contradict the exchange mandated independence requirement, that particular transaction may be rejected. However, there could arise a situation where, due to the importance of the transaction to our overall business and financial position and strategic objectives and our ability to appoint another independent director, such a transaction might be approved by the Audit Committee.
Any member of the Audit Committee who has an interest in the transaction under discussion will abstain from voting on the approval of the related party transaction, but may, if so requested by the Chairperson of the Audit Committee, participate in some or all of the Audit Committee’s discussions of the related party transaction. Upon completion of its review of the transaction, the Audit Committee may determine to permit or to prohibit the related party transaction.
A related party transaction entered into without pre-approval of the Audit Committee will not be deemed to violate the policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into or after it becomes reasonably apparent that the transaction is covered by the policy.
Under the policy, any “related party transaction” will be consummated or will continue only if:
| · | the Audit Committee shall approve or ratify such transaction in accordance with the guidelines set forth in the policy and if the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party, |
| · | the transaction is approved by the disinterested members of the Board, or |
| · | if the transaction involves compensation, that such transaction is approved of by our Compensation Committee. |
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Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines which govern, among other things, Board member criteria, responsibilities, compensation and education, Board committee composition and charters and management succession.
Code of Ethics
Our directors and executive officers, including our Chief Executive Officer, Chief Financial Officer and all senior financial officers, are bound by a Code of Ethics that complies with Item 406 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
A Code of Ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:
| · | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, |
| · | full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the SEC and in other public communications made by an issuer, |
| · | compliance with applicable governmental laws, rules and regulations, |
| · | the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code, and |
| · | accountability for adherence to the code. |
We will mail without charge, upon written request, a copy of our Code of Ethics. Requests should be sent to: Searchlight Minerals Corp., 2360 W. Horizon Ridge Pkwy., Suite 100, Henderson, Nevada, 89052, Attn. Corporate Secretary.
Rule 10b5-1 Plans
The Board has authorized directors and other executive officers who are subject to our stock-trading pre-clearance and quarterly blackout requirements, at their election, to enter into plans, at a time they are not in possession of material non-public information, to purchase or sell shares of our common stock that satisfy the requirements of Exchange Act Rule 10b5-1. Rule 10b5-1 permits trading on a pre-arranged, “automatic-pilot” basis subject to certain conditions, including that the person for whom the plan is created (or anyone else aware of material non-public information acting on such person’s behalf) not exercise any subsequent influence regarding the amount, price and dates of transactions under the plan. Using these plans, officers and directors can gradually diversify their investment portfolios and spread stock trades over a period of time regardless of any material, non-public information they may receive after adopting their plans. As a result, trades under 10b5-1 plans by our directors and other executive officer may not be indicative of their respective opinions of our performance at the time of the trade or of our potential future performance. The Board believes that it is appropriate to permit directors and senior executives, whose ability to purchase or sell our common stock is otherwise substantially restricted by quarterly and special stock-trading blackouts and by their possession from time to time of material nonpublic information, to engage in pre-arranged trading in accordance with Rule 10b5-1. Trades by our directors and executive officers pursuant to Rule 10b5-1 trading plans will be disclosed publicly through Form 144 and Form 4 filings with the SEC, as required by applicable law. Currently, we do not have any Rule 10b5-1 trading plans for any of our officers and directors.
Stockholder Communication with Our Board of Directors
Our Board has established a process for stockholders to communicate with the Board or with individual directors. Stockholders who wish to communicate with our Board or with individual directors should direct written correspondence to our Corporate Secretary at our principal executive offices located at 2360 West Horizon Ridge Pkwy., Suite 100, Henderson, Nevada, 89052. Any such communication must contain:
| · | a representation that the stockholder is a holder of record of our capital stock, |
| · | the name and address, as they appear on our books, of the stockholder sending such communication, and |
| · | the class and number of shares of our capital stock that are beneficially owned by such stockholder. |
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The Corporate Secretary will forward such communications to our Board or the specified individual director to whom the communication is directed unless such communication is unduly hostile, threatening, illegal or similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or to take appropriate legal action regarding such communication.
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and beneficial holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership and reports of changes in ownership of our equity securities. As of the date of this Report, and based solely on our review of the copies of such reports furnished to us and written representations from the directors and executive officers, we believe that all reports needed to be filed by current Section 16 reporting persons have been filed in a timely manner for the year ended December 31, 2015, with the exception of the following: A Form 4 filed by Mr. Oring on November 3, 2015, reflecting two acquisition transactions from September 18, 2015, and another Form 4 filed by Mr. Oring on March 24, 2015, reflecting two acquisition transactions from March 18, 2015.
Item 11. Executive Compensation
Summary Compensation Table
The following table sets forth all compensation received during the two years ended December 31, 2015 by our Chief Executive Officer, former Chief Financial Officer and each of the other most highly compensated executive officers whose total compensation exceeded $100,000 in such fiscal year. These officers are referred to as the Named Executive Officers in this Report:
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation | Non-qualified Deferred Compensation Earnings | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
| Martin B. Oring, | 2015 | 200,000 | - | - | 256,280 | - | - | - | 456,280 | |||||||||||||||||||||||||
| Director, President and CEO (2) | 2014 | 6,250 | (2) | - | - | 729,443 | - | - | 49,580 | (2) | 785,273 | |||||||||||||||||||||||
| Carl S. Ager, | 2015 | 160,000 | - | - | 44,849 | - | - | - | 204,849 | |||||||||||||||||||||||||
| Director, Vice President and Secretary (3) | 2014 | 33,327 | (3) | - | - | 332,316 | - | - | - | 365,643 | ||||||||||||||||||||||||
| Melvin L. Williams, | 2015 | 130,000 | - | - | 21,143 | - | - | 59,596 | (4) | 210,739 | ||||||||||||||||||||||||
| Chief Financial Officer (4) | 2014 | 27,077 | (4) | - | - | 223,557 | - | - | 42,304 | (4) | 292,938 | |||||||||||||||||||||||
| (1) | Amounts listed in this column represent the aggregate grant date fair value for grants during the fiscal year, computed in accordance with Accounting Standards Codification 718, “Compensation—Stock Compensation,” (ASC 718), rather than the amounts realized by the named individuals. See Note 11 to the consolidated financial statements (“Stock-Based Compensation”) included in our Annual Report on Form 10-K for the year ended December 31, 2015 for our valuation assumptions used to calculate the grant date fair value. |
| (2) | Mr. Oring was appointed as our President and Chief Executive Officer on October 1, 2010. Mr. Oring entered into an employment agreement on October 1, 2010 for an annual salary of $30,000. Mr. Oring was also paid a director fee of $10,000 per month through June 30, 2011. Mr. Oring’s director fees are included in other compensation in the above table. Effective July 1, 2011, Mr. Oring’s total base compensation was increased to $200,000 per annum. Mr. Oring’s salary as our President and Chief Executive Officer was unchanged but his director fees were increased to $170,000 per annum or $14,167 per month. Due to our continuing liquidity needs, Mr. Oring received cash compensation of $47,497 and voluntarily agreed to relinquish $23,750 of salary and $120,420 of director’s fees due to him as of December 15, 2014. Mr. Oring did not receive any cash payments during the year ended December 31, 2015. At December 31, 2015 and 2014 we had total accrued compensation payable to Mr. Oring of $208,333 and $8,333 respectively. |
| (3) | Mr. Ager was appointed as our Secretary, Treasurer and Chief Financial Officer on October 7, 2005. Mr. Ager entered into an employment agreement on January 1, 2006 and received an annual salary of $160,000 from January 1, 2008 until September 30, 2010. From October 1, 2010 through June 30, 2011, we agreed to reduce Mr. Ager’s annual base compensation to $120,000. Effective July 1, 2011, the Compensation Committee approved to restore cash compensation levels for Mr. Ager to his base salary that existed prior to the 25% reduction based on the favorable results from autoclave testing. Due to our continuing liquidity needs, Mr. Ager received cash compensation of $26,660 and voluntarily agreed to relinquish $126,673 of salary due to him as of December 15, 2014. Mr. Ager did not receive any cash payments during the year ended December 31, 2015. At December 31, 2015 and 2014 we had compensation payable to Mr. Ager of $166,660 and $6,667 respectively. |
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| (4) | Mr. Williams was appointed as our Chief Financial Officer on June 14, 2006. Mr. Williams entered into an employment agreement on June 14, 2006 and received an annual salary of $130,000 from January 1, 2008 until September 30, 2010. From October 1, 2010 through June 30, 2011, we agreed to reduce Mr. Williams’ annual base compensation to $97,500. Effective July 1, 2011, the Compensation Committee approved to restore cash compensation levels for Mr. Williams to his base salary that existed prior to the 25% reduction based on the favorable results from autoclave testing. Due to our continuing liquidity needs, Mr. Williams received cash compensation of $21,660 and voluntarily agreed to relinquish $102,923 of accrued compensation due to him as of December 15, 2014. Mr. Williams received no cash payments during the year ended December 31, 2015. At December 31, 2015 and 2014 we had compensation payable to Mr. Williams of $135,410 and $5,417 respectively. |
Other compensation includes direct benefit to Mr. Williams of $59,596 and $42,304 from fees incurred in 2015 and 2014, respectively, with Cupit, Milligan, Ogden & Williams, an affiliate of Mr. Williams, to provide accounting support services. These amounts were based on the profit percentage derived by Mr. Williams from the revenue earned by Cupit Milligan in the applicable period, as applied to the fees for services provided to us. As of December 31, 2015 we had outstanding fees payable to Cupit Milligan of $158,457 and $8,147 respectively.
Mr. Williams resigned as our Chief Financial Officer effective April 8, 2016.
Outstanding Equity Awards At Fiscal Year-End
The following table provides information concerning unexercised options for each of our Named Executive Officers outstanding as of December 31, 2015:
| Name and Position | Number of Securities Underlying Options (#)Exercisable | Option Awards Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Stock Awards Number of Shares or Units of Stock that Have Not Vested (#) | ||||||||||||||||||
Martin B. Oring(1) Director, President and CEO | 15,000 | - | - | $ | 1.20 | 3/31/2016 | (3) | - | ||||||||||||||||
| 25,714 | - | - | $ | 0.70 | 6/30/2016 | (3) | - | |||||||||||||||||
| 18,462 | - | - | $ | 0.98 | 9/30/2016 | (3) | - | |||||||||||||||||
| 100,000 | - | - | $ | 0.91 | 10/1/2016 | (3) | - | |||||||||||||||||
| 50,000 | - | - | $ | 1.45 | 10/6/2016 | (3) | - | |||||||||||||||||
| 100,000 | - | - | $ | 0.91 | 12/22/2016 | (3) | - | |||||||||||||||||
| 450,000 | (1) | - | - | $ | 1.22 | 9/21/2016 | - | |||||||||||||||||
| 50,000 | - | - | $ | 1.45 | 10/6/2016 | - | ||||||||||||||||||
| 50,000 | - | - | $ | 1.45 | 10/6/2017 | - | ||||||||||||||||||
| 3,500,000 | - | - | $ | 0.41 | 12/18/2019 | - | ||||||||||||||||||
| 1,154,000 | - | - | $ | 0.50 | 12/23/2019 | - | ||||||||||||||||||
| 100,000 | - | - | $ | 0.91 | 10/1/2020 | - | ||||||||||||||||||
| 2,000,000 | (4) | - | - | $ | 0.50 | 12/19/2020 | ||||||||||||||||||
| - | 150,000 | (1) | - | $ | 1.22 | 9/21/2021 | - | |||||||||||||||||
Carl S. Ager Director, Vice President, Treasurer and Secretary | 225,000 | (2) | - | - | $ | 1.22 | 9/21/2016 | - | ||||||||||||||||
| - | 100,000 | (2) | - | $ | 1.22 | 9/21/2021 | - | |||||||||||||||||
| 1,000,000 | - | - | $ | 0.41 | 12/18/2019 | - | ||||||||||||||||||
| 1,014,000 | - | - | $ | 0.50 | 12/23/2019 | - | ||||||||||||||||||
| 350,000 | (4) | - | - | $ | 0.50 | 12/19/2020 | ||||||||||||||||||
Melvin L. Williams Chief Financial Officer | 75,000 | - | - | $ | 1.22 | 7/8/2016 | (5) | - | ||||||||||||||||
| 243,902 | - | - | $ | 0.41 | 7/8/2016 | (6) | - | |||||||||||||||||
| 256,098 | - | - | $ | 0.41 | 4/8/2017 | (7) | - | |||||||||||||||||
| 824,000 | - | - | $ | 0.50 | 12/23/2019 | - | ||||||||||||||||||
| 165,000 | (4) | - | - | $ | 0.50 | 12/19/2020 | ||||||||||||||||||
| (1) | On September 21, 2011, Mr. Oring was granted options to purchase up to 600,000 shares of our common stock pursuant to a non-qualified stock option agreement. Of the 600,000 options, 200,000 options vested on execution of the agreement. The remaining 400,000 options vest over the term of the option in connection with the occurrence of certain events, as follows: (i) 150,000 options vested upon completion of defined target from metallurgical tests; (ii) 150,000 will vest upon obtaining a funding commitment to construct a gold recovery facility; and (iii) 100,000 vested upon Mr. Oring completing 30 months of service as CEO. |
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| (2) | On September 21, 2011, Mr. Ager was granted options to purchase up to 325,000 shares of our common stock pursuant to a non-qualified stock option agreement. Of the 325,000 options, 125,000 options vested on execution of the agreement. The remaining 200,000 options vest over the term of the option in connection with the occurrence of certain events, as follows: (i) 100,000 options vested upon completion of defined target from metallurgical tests and (ii) 100,000 will vest upon obtaining a funding commitment to construct a gold recovery facility. |
| (3) | On March 23, 2015, our Board unilaterally determined to amend these stock options by extending their expiration dates by twelve months. |
| (4) | On August 28, 2015 Mr. Oring, Mr. Ager and Mr. Williams were granted 2,000,000, 350,000 and 165,000 shares of our common stock respectively, pursuant to a non-qualified option agreement. The options were fully vested at December 31, 2015. |
| (5) | The original expiration date for such options was September 21, 2016. Mr. Williams resigned effective as of April 8, 2016. As such, all vested ISOs held by Mr. Williams pursuant to the 2009 Option Plan shall terminate three months after the date service terminates, which is July 7, 2016. |
| (6) | The original expiration date for such options was December 18, 2019. Mr. Williams resigned effective as of April 8, 2016. As such, all vested ISOs held by Mr. Williams pursuant to the 2009 Option Plan shall terminate three months after the date service terminates, which is July 7, 2016. |
| (7) | The original expiration date for such options was December 18, 2019. Mr. Williams resigned effective as of April 8, 2016. As such, all vested Non-Qualified Stock Options held by Mr. Williams pursuant to the 2009 Option Plan shall terminate one year after the date service terminates, which is April 8, 2017. |
Potential Payments upon Termination of Employment or a Change of Control
We have entered into change in control agreements with Martin B. Oring, our President and Chief Executive Officer, Carl S. Ager, our Vice President, Secretary and Treasurer, and Melvin L. Williams, our former Chief Financial Officer, in connection with their respective employment agreements. The agreement with Mr. Oring provides for the vesting of any unvested options granted in connection with his employment agreement in the event of a significant corporate transaction generally resulting in a sale or change of control. The agreements for Mr. Ager and Mr. Williams provide for payments to be made to each named executive officer upon termination of employment; however, Mr. Williams resigned on April 8, 2016.
In the event that the agreement with Mr. Ager is terminated by us, other than for cause, we will provide Mr. Ager with six months written notice or payment equal to six months of his monthly salary.
The severance amounts are payable in cash, in a lump sum. As of December 31, 2015, in the event of a qualifying termination, Mr. Ager would have been entitled to cash payments totaling $80,000 and Mr. Williams would have been entitled to cash payments totaling $32,500.
Director Compensation
This section provides information regarding the compensation policies for our directors and amounts paid and securities awarded to these directors in the year ended December 31, 2015.
From January 1, 2008 until September 30, 2010, we agreed to pay non-employee directors compensation of $3,000 per month in cash. From October 1, 2010 through June, 30, 2011, the directors agreed to reduce their base cash compensation by 25% to $2,250 per month. As of July 1, 2011, we agreed to restore the base cash compensation to $3,000 per month. In addition, directors have a choice between receiving $9,000 value of our common stock per quarter, where the appropriate number of shares to equal $9,000 is determined by the closing price of our stock on the last trading day of each quarter, or a number of options to purchase twice the number of shares of common stock that the director would otherwise receive if the director elected to receive shares, with an exercise price based on the closing price of our stock on the last trading day of each quarter. Effective April 1, 2011, the Board implemented a policy whereby the number of options granted for quarterly compensation to each director is limited to 18,000 options per quarter.
Further, our 2009 Stock Incentive Plan for Directors (“2009 Directors Plan”) provides for grants to our directors of options to purchase shares of our common stock, rights to receive the appreciation in value of common shares, awards of common shares subject to vesting and other restrictions on transfer, and other awards based on common shares. The 2009 Directors Plan authorizes the issuance of up 2,750,000 shares of common stock.
In addition, on October 6, 2010, we instituted a form of indemnification agreement between the directors and us, whereby directors may be indemnified by us against claims brought against them out of their services to us. All of our current directors have entered into such an indemnification agreement.
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The following table summarizes the compensation paid to our non-employee directors for the year ended December 31, 2015:
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2)(3) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||
| Robert D. McDougal (4) | $ | 36,000 | (8) | - | $ | 39,886 | - | - | $ | 75,886 | ||||||||||||||
| Jordan M. Estra (5) | $ | 36,000 | (8) | - | $ | 39,886 | - | - | $ | 75,886 | ||||||||||||||
| Michael W. Conboy (6) | - | - | - | - | - | - | ||||||||||||||||||
| John E. Mack(7) | $ | 36,000 | (8) | - | $ | 39,886 | - | - | $ | 75,886 | ||||||||||||||
| (1) | No stock awards were granted for the year ended December 31, 2015. |
| (2) | Amounts listed in this column represent the aggregate grant date fair value for grants during the fiscal year, computed in accordance with Accounting Standards Codification 718, “Compensation—Stock Compensation,” (ASC 718), rather than the amounts realized by the named individuals. See Note 11 to the consolidated financial statements (“Stock Based Compensation”) included in our Annual Report on Form 10-K for the year ended December 31, 2015 for our valuation assumptions used to calculate the grant date fair value. |
| (3) | The following stock option awards were made to the directors in the table in 2015, as computed in accordance with ASC 718: (i) 18,000 stock options each to Jordan M. Estra, John E. Mack and Robert D. McDougal with an exercise price of $0.33 per share and a grant date value of $0.16 per share (March 31, 2015); (ii) 18,000 stock options each to Jordan M. Estra, John E. Mack and Robert D. McDougal with an exercise price of $0.25 per share and a grant date value of $0.12 per share (June 30, 2015); (iii) 18,000 stock options each to Jordan M. Estra, Robert D. McDougal and John E. Mack with an exercise price of $0.22 per share and a grant date value of $0.10 per share (September 30, 2015); (iv) 18,000 stock options each to Jordan M. Estra, John E. Mack and Robert D. McDougal with an exercise price of $0.11 per share and a grant date value of $0.05 per share (December 31, 2015); and (v) 250,000 stock options each to Jordan M. Estra, Robert D. McDougal and John E. Mack with an exercise price of $0.50 per share and a grant date value of $0.13 per share (August 28, 2015). |
| (4) | Mr. McDougal held 1,818,804 stock options and no unvested shares as stock awards, at December 31, 2015. We granted 322,000 stock options and no shares as stock awards to Mr. McDougal in 2015. Mr. McDougal passed away on January 15, 2016. |
| (5) | Mr. Estra held 1,849,518 stock options, and no unvested shares as stock awards, at December 31, 2015. We granted 322,000 stock options and no shares as stock awards to Mr. Estra in 2015. |
| (6) | Mr. Conboy held no stock options and no unvested shares as stock awards, at December 31, 2015. We granted no stock options and no shares as stock awards to Mr. Conboy in 2015. |
| (7) | Mr. Mack held 1,661,800 stock options, which included 100,000 unvested stock options, at December 31, 2015. We granted 322,000 stock options and no shares as stock awards to Mr. Mack in 2015. |
| (8) | Due to our continuing liquidity needs, Mr. McDougal, Mr. Estra and Mr. Mack each received no cash compensation during the year ended December 31, 2015. As of December 31, 2015 amounts outstanding and owed to Mr. McDougal, Mr. Estra and Mr. Mack amounted to $37,500 respectively. |
Limitation of Liability of Directors
Nevada Revised Statutes provide that, subject to certain exceptions, or unless the articles of incorporation or an amendment thereto provide for greater individual liability, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his capacity as a director or officer unless it is proven that his act or failure to act constituted a breach of his fiduciary duties as a director or officer, and his breach of those duties involved intentional misconduct, fraud or a knowing violation of law. Our Articles of Incorporation do not contain a provision which provides for greater individual liability of our directors and officers.
Our Articles of Incorporation include provisions for limiting liability of our directors and officers under certain circumstances and for permitting indemnification of directors, officers and certain other persons, to the maximum extent permitted by applicable Nevada law, including that:
| · | no director or officer is individually liable to us or our stockholders or creditors for any damages as a result of any act or failure to act in his capacity as a director or officer, provided, that the foregoing clause will not apply to any liability of a director or officer for any act or failure to act for which Nevada law proscribes this limitation and then only to the extent that this limitation is specifically proscribed, |
| · | any repeal or modification of the foregoing provision will not adversely affect any right or protection of a director existing at the time of such repeal or modification, |
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| · | we are permitted to indemnify our directors, officers and such other persons to the fullest extent permitted under Nevada law. Our current Bylaws include provisions for the indemnification of our directors, officers and certain other persons, to the fullest extent permitted by applicable Nevada law, and |
| · | with respect to the limitation of liability of our directors and officers or indemnification of our directors, officers and such other persons, neither any amendment or repeal of these provisions nor the adoption of any inconsistent provision of our Articles of Incorporation, will eliminate or reduce the effect of these provisions, in respect of any matter occurring, or any action, suit or proceeding accruing or arising or that, but for these provisions, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. |
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of April 22, 2016 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers, and (iii) officers and directors as a group. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown and the officers, directors and stockholders can be reached at our principal offices at 2360 West Horizon Ridge Parkway, Suite 100, Henderson, Nevada 89052:
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Common Stock(1) | ||||||||
| DIRECTORS AND OFFICERS | ||||||||||
| Carl S. Ager | 23,057,576 | (2)(9) | 7.88 | % | ||||||
| Melvin L. Williams | 2,033,430 | (3) | * | |||||||
| Robert D. McDougal | 2,128,384 | (4) | * | |||||||
| Martin B. Oring | 17,330,934 | (5) | 5.89 | % | ||||||
| Jordan M. Estra | 1,871,519 | (6) | 6.65 | % | ||||||
| John. E. Mack | 1,679,800 | (7) | * | |||||||
| Michael W. Conboy | 0 | (8) | * | |||||||
| All officers and directors as a group (7 persons) | 48,101,643 | 15.64 | % | |||||||
| HOLDERS OF MORE THAN 5% OF OUR COMMON STOCK | ||||||||||
| Nanominerals Corp. 3500 Lakeside Court, Suite 206 Reno, Nevada 89509 | 19,868,576 | (9) | 6.86 | % | ||||||
| Dr. Charles A. Ager 17146 – 20th Avenue Surrey, British Columbia, Canada V3S 9N4 | 20,913,766 | (9)(10) | 7.22 | % | ||||||
| Luxor Capital Group, LP 1114 Ave of the Americas 29th Floor New York, NY 10036 | 142,665,754 | (11) | 49.83 | % | ||||||
* Less than 1%.
| (1) | Beneficial ownership is determined in accordance with the rules of the SEC. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days of the date of this Report, are deemed outstanding for computing the percentage ownership of the stockholder holding the options or warrants, but are not deemed outstanding for computing the percentage ownership of any other stockholder. Unless otherwise indicated in the footnotes to this table, we believe stockholders named in the table have sole voting and sole investment power with respect to the shares set forth opposite such stockholder's name. Percentage of ownership is based on 286,310,744 shares of common stock outstanding as of April 22, 2016. |
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| (2) | Consists of 500,000 shares of common stock and options to acquire an additional 2,689,000 shares of our common stock (of which 100,000 may vest after 60 days following April 22, 2016) held directly by Carl S. Ager, our Vice President, Secretary and Treasurer and a member of our Board. In addition, Mr. Ager is a 17.5% stockholder of Nanominerals, a company that owns 16,400,000 of our outstanding shares of common stock and warrants to purchase up to 3,468,576 shares of our common stock. However, Mr. Ager does not have any voting or investment powers over the 16,400,000 shares or the 3,468,576 warrants owned by Nanominerals. For purposes of Rule 13d-3 of the Exchange Act, Mr. Ager may be deemed to be a beneficial owner of the 16,400,000 shares and the 3,468,576 warrants owned by Nanominerals by virtue of his ownership interest in Nanominerals. However, for purposes of Section 13(d) of the Exchange Act, Mr. Ager disclaims beneficial ownership of all but a number of shares not in excess of 2,870,000 of the 16,400,000 shares and 607,000 of the 3,468,576 warrants owned by Nanominerals, which reflects his 17.5% ownership interest in Nanominerals. See footnote (9) below. |
| (3) | Consists of 449,430 shares held directly by Melvin L. Williams and in his personal IRA, and 20,000 shares held by Cupit, Milligan, Ogden & Williams PSP and Trust, dated 1/1/97, and options to acquire an additional 1,564,000 shares of our common stock. On April 8, 2016, Mr. Williams resigned as the Chief Financial Officer of the Company. |
| (4) | Consists of 309,580 shares held by Robert D. McDougal as Trustee of the Robert D. McDougal and Edna D. McDougal Family Trust Dated December 13, 2007 and options to acquire an additional 1,818,804 shares of our common stock. Mr. McDougal passed away on January 15, 2016. |
| (5) | Consists of 305,000 shares held directly by Martin B. Oring (or jointly with his wife), 6,679,749 shares held by Martin Oring Financial Trust dated December 20, 2006, a family trust of which Mr. Oring’s wife serves as a trustee, 2,222,921 shares held by Wealth Preservation Defined Benefit Plan and options and warrants to acquire an additional 8,123,264 shares of common stock (of which 150,000 may vest after 60 days following April 22, 2016) held by Mr. Oring and his affiliated entities. |
| (6) | Consists of an aggregate of 4,000 shares held directly by Jordan M. Estra (jointly with his wife) and in his personal IRA, and options to acquire an additional 1,867,519 shares of our common stock held by Mr. Estra and his affiliated entities. |
| (7) | Consists of options to acquire 1,679,800 shares of our common stock (of which 50,000 may vest after 60 days following April 22, 2016) held by John Mack. |
| (8) | Michael Conboy is employed by Luxor Capital Group, LP as the Director of Research. However, for purposes of Section 13(d) of the Exchange Act, Mr. Conboy disclaims beneficial ownership of all shares beneficially owned by Luxor Capital Group, LP. See footnote (11) below. |
| (9) | Nanominerals is a privately held Nevada corporation which owns 16,400,000 shares of our common stock and warrants to purchase up to 3,468,576 shares of common stock. Carl S. Ager, one of our officers and directors, owns 17.5% of the issued and outstanding shares of Nanominerals. Dr. Charles A. Ager, the sole director and officer of Nanominerals, and his wife, Carol Ager, collectively own 35% of the issued and outstanding shares of Nanominerals. Further, Mr. Ager has given an irrevocable proxy to Dr. Ager to vote his shares of Nanominerals during the time that Mr. Ager serves as one of our directors or executive officers. Dr. Ager has sole voting and investment powers over the 16,400,000 shares and the 3,468,576 warrants owned by Nanominerals. A group of additional shareholders of Nanominerals, none of whom is an officer or director of Searchlight or Nanominerals, collectively own 47.5% of the outstanding shares of Nanominerals. |
| (10) | These shares include the 16,400,000 shares and warrants to purchase up to 3,468,576 shares of common stock owned by Nanominerals. Pursuant to a Schedule 13D filed by Dr. Ager, Dr. Ager and his wife, Carol Ager, collectively own 35% of the outstanding shares of Nanominerals. Dr. Ager is the sole director and officer of Nanominerals. Further, Mr. Ager has given an irrevocable proxy to Dr. Ager to vote his shares of Nanominerals during the time that Mr. Ager serves as one of our directors or executive officers. Dr. Ager has sole voting and investment powers over the 16,400,000 shares and the 3,468,576 warrants owned by Nanominerals. See footnote (9) above. In addition, Dr. Ager’s affiliate, Geotech Mining Inc., owns 140,000 shares of common stock. Further, Mrs. Ager owns 765,190 shares in her own name, and her affiliate, Geosearch Inc., owns an additional 140,000 shares. |
| (11) | Luxor Capital Group, LP (“Luxor Capital Group”) acts as the investment manager of Luxor Capital Partners, LP, Luxor Spectrum, LLC, Luxor Wavefront, LP, Luxor Capital Partners Offshore Master Fund, LP, Luxor Capital Partners Offshore, Ltd., Luxor Spectrum Offshore Master Fund, LP, Luxor Spectrum Offshore, Ltd. and Thebes Offshore Master Fund, LP and to an account it separately manages (collectively, the “Luxor Reporting Entities”). The Luxor Reporting Entities beneficially own an aggregate of 142,665,754 shares of common stock and warrants to purchase up to an additional 16,532,789 shares of common stock. All 16,532,789 warrants, however, are not exercisable until September 18, 2016. Luxor Management, LLC (“Luxor Management”) is the general partner of Luxor Capital Group. Christian Leone is the managing member of Luxor Management. Luxor Capital Partners Offshore Master Fund, LP is a subsidiary of Luxor Capital Partners Offshore, Ltd., and Luxor Spectrum Offshore Master Fund, LP is a subsidiary of Luxor Spectrum Offshore, Ltd. LCG Holdings, LLC (“LCG Holdings”) serves as the general partner or the managing member of certain of the Luxor Reporting Entities. Mr. Leone is the managing member of LCG Holdings. Luxor Capital Group, Luxor Management and Mr. Leone may each be deemed to be the beneficial owner of the 142,665,754 shares and 16,532,789 warrants beneficially owned by the Luxor Reporting Entities. |
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Item 13. Certain Relationships and Related Transactions, and Director Independence
General
We have ongoing business relationships with affiliates of our management and principal stockholders. In particular, we have continuing obligations under the agreements under which we acquired the assets relating to our Clarkdale Slag Project. We remain obligated to pay a royalty which may be generated from the operations of the Clarkdale Slag Project to Nanominerals, one of our principal stockholders, which is an affiliate of one member of our executive management and Board, Carl S. Ager. We also have engaged Nanominerals as a paid consultant to provide technical services to us. Further, our President and Chief Executive Officer and a member of our Board, serves as a consultant to Ireland Inc., a publicly traded, mining related company. We also rent office space from Ireland Inc. under a sublease agreement. These persons are subject to a fiduciary duty to exercise good faith and integrity in handling our affairs. However, the existence of these continuing obligations may create a conflict of interest between us and our Board members and senior executive management, and any disputes between us and such persons over the terms and conditions of these agreements that may arise in the future may raise the risk that the negotiations over such disputes may not be subject to being resolved in an arms’ length manner. In addition, Nanominerals’ interest in Ireland Inc. and its other mining related business interests may create a conflict of interest between us and our Board members and senior executive management who are affiliates of Nanominerals.
Although our management intends to avoid situations involving conflicts of interest and is subject to a Code of Ethics, there may be situations in which our interests may conflict with the interests of those of our management or their affiliates. These could include:
| · | competing for the time and attention of management, |
| · | potential interests of management in competing investment ventures, and |
| · | the lack of independent representation of the interests of the other stockholders in connection with potential disputes or negotiations over ongoing business relationships. |
We believe that all transactions with our affiliates have been entered into on terms no less favorable to us than could have been obtained from independent third parties. We intend that any transactions with officers, directors and 5% or greater stockholders will be on terms no less favorable to us than could be obtained from independent third parties.
We currently have three independent directors and the existence of these continuing obligations to our affiliates may create a conflict of interest between us and certain of our Board members and senior executive management, and any disputes between us and such persons over the terms and conditions of these agreements that may arise in the future may raise the risk that the negotiations over such disputes may not be subject to being resolved in an arms’ length manner. We intend to make good faith efforts to recruit additional independent persons to our Board. We intend that any transactions with our affiliates will be approved by a majority of our independent, disinterested directors and will comply with the Sarbanes Oxley Act and other securities laws and regulations.
Although we only have three independent directors, the Board has adopted a written Related Person Transactions Policy, which describes the procedures used to identify, review, approve and disclose, if necessary, any transaction or series of transactions in which: (i) we were, are or will be a participant, (ii) the amount involved exceeds $120,000, and (iii) a related person had, has or will have a direct or indirect material interest. There can be no assurance that the above conflicts will not result in adverse consequences to us and the interests of the other stockholders.
Prior to the adoption of the Related Person Transactions Policy on March 17, 2009, related party transactions were subject to our Code of Ethics, which was adopted July 18, 2006, and an unwritten policy that any transactions with related persons would be approved of by a majority of our independent, disinterested directors, and would comply with the Sarbanes Oxley Act and other securities laws and regulations. However, we did not have any independent directors until October 2008. At any point at which we did not have independent directors on our Board, any transactions with related persons were approved of by a majority of our then disinterested directors.
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The following is a description of related party transactions in the two most recent fiscal years ended December 31, 2015.
Transactions with Nanominerals Corp. and Affiliates
General. Nanominerals is a private Nevada corporation principally engaged in the business of mineral exploration. Nanominerals does not have any employees and relies on third party consultants for the provision of services. Nanominerals is one of our principal stockholders. Dr. Ager and Mrs. Ager, collectively own 35% of the outstanding common stock of Nanominerals. One of our executive officers and directors, Carl S. Ager, and our former President and Chief Executive Officer, Ian R. McNeil, are stockholders of Nanominerals, but neither currently serves as an officer, director or employee of Nanominerals. Messrs. Ager and McNeil each owns 17.5% of the issued and outstanding shares of common stock of Nanominerals, representing an aggregate of 35% of the outstanding common stock of Nanominerals. Dr. Ager currently is the sole officer and director of Nanominerals, and controls its day to day operations. Further, Mr. Ager has given an irrevocable proxy to Dr. Ager to vote his shares of Nanominerals during the time that Mr. Ager serves as one of our directors or executive officers. Dr. Ager has sole voting and investment powers over the 16,400,000 shares and 3,468,576 common stock purchase warrants owned by Nanominerals. Messrs. Ager and McNeil are the son and son-in-law, respectively, of Dr. Ager and Mrs. Ager. Dr. Ager, Mr. Ager and Mr. McNeil may be considered promoters of the Company by virtue of their positions in the Company and Nanominerals. Nanominerals is the principal stockholder of another publicly traded mining company (Ireland Inc.) and has other mining related business interests which may create a conflict of interest between us and our Board members and senior executive management who are affiliates of Nanominerals.
Consulting Arrangement with Nanominerals. Nanominerals provides us with the use of its laboratory, instrumentation, milling equipment and research facilities which has allowed us to perform tests and analysis both effectively and in a more timely manner than would otherwise be available from other such consultants. We believe that Nanominerals’ knowledge and understanding of the science and technology in our business, along with its understanding of how to implement our business plan in a practical manner, has made Nanominerals an important part of our technical team. Dr. Ager performs the services for us in his authorized capacity with Nanominerals under our consulting arrangement with Nanominerals. Nanominerals also engages the services of outside technical consultants to perform the services for us, depending on the specific goal of a particular project. Some of our consultants have worked directly with Nanominerals in an ongoing manner and performed day-to-day work and tests. The consulting services provided by Nanominerals are highly specialized and unique to the mineral exploration industry, and there is a limited number of experts that can perform these types of services. We currently do not rely solely on Nanominerals to provide us with technical expertise to guide the project technically. However, Nanominerals continues to be an important consultant to assist us with our technical challenges.
The services provided by Nanominerals include:
| · | SEM/EDS Studies: Nanominerals uses SEM/EDS to identify the minerals (gold, silver, copper and zinc) in the slag material and understand the physical make-up of the slag. This information has provided us with an understanding how to potentially liberate the minerals from the slag material by mechanical methods (grinding). This type of work is highly specialized and very unique to the mineral exploration industry. |
| · | Grinding Studies: Looking at the ground material again using SEM/EDS, Nanominerals has assisted us in testing a number of different grinders and variables (size of material fed to grinder, grinding time, etc.) to find the best way to mechanically liberate and expose the minerals within the slag material. Without mechanical liberation, the chemicals used in the extraction process (leaching) cannot perform. Therefore, grinding is a crucial step in the overall processing of the slag material. The unique nature of the slag material (i.e. it is very hard and abrasive and the minerals are entombed within the slag) makes the proper grinding of the slag material very difficult. Grinding and crushing are commonly used in the mining industry. |
| · | Analytical and Extraction Studies: Nanominerals has provided us the use of its laboratory, instrumentation, milling equipment and research facilities and has performed (and continues to perform) analytical and extraction studies for the presence of gold, silver, copper and zinc in the slag material. Nanominerals has tested different variables (chemicals, pH, ORP, machines, instruments, etc.) to attempt to determine the most effective methods to analyze and extract the desired metals. |
| · | Flow Sheet Development: Nanominerals, in conjunction with our technical team and consultants, helps to developed a flow sheet for the Clarkdale Project to attempt to determine methods to process the slag material on a large scale, and continues to assist us in determining the most effective methods used in the process of extracting metals from the slag material. |
| · | Financings: Nanominerals has introduced us to investors and potential investors which have led to participation in our previous financings. Nanominerals has also provided assistance to us when potential financiers performed technical due diligence on our projects, including making technical presentations to potential investors. We have not provided special fees to Nanominerals in connection with such financings. |
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We commenced our consulting arrangement with Nanominerals in 2005 following the completion of the Assignment Agreement relating to the Clarkdale Slag Project. In 2005, we only reimbursed Nanominerals for technical expenses. However, in 2006, we began to pay Nanominerals the $30,000 monthly fee, plus expense reimbursement due to the significant amount of work that Nanominerals was performing for us. This consulting arrangement was approved by the Board, including our former director K. Ian Matheson, who has never had a direct or indirect financial interest in Nanominerals.
The Board initially determined that $30,000 per month fee was a reasonable rate for Nanominerals based on several factors:
| · | the technical services provided by Nanominerals were highly specialized and required scientists with significant experience in mining, metallurgy and chemistry. |
| · | we required a significant amount of time to be devoted to our projects (most importantly at Clarkdale). Nanominerals was available to us nearly every day (at least 100 hours per month). |
| · | Nanominerals had available resources, such as outside scientific contacts whom the consultant could use to perform specific work (i.e. SEM specialists, metallurgists in certain specialized fields, etc.). |
| · | Nanominerals had instrumentation and laboratory facilities at its disposal, either to be able to prepare or provide technical presentations and coordinate technical due-diligence presentations to prospective investors. |
| · | Nanominerals was willing to provide the services to us on a month-to-month with the ability to terminate at any time. |
Given the time commitment that we required and the general market rate for qualified consultants of approximately $500 per hour, anticipated monthly fees for the services that Nanominerals was to perform were estimated to be a minimum of $50,000. Given these criteria, we believe that engaging Nanominerals to perform these services at the $30,000 monthly rate, plus expense reimbursement, has provided an advantage to us over other technical consultants. Until August 31, 2010, we paid Nanominerals a $30,000 per month fee, together with expense reimbursement and some expenses, to cover their services. The monthly fee was reduced to $17,500 on September 1, 2010, and was further reduced to $15,000 on October 1, 2010. Effective January 1, 2011, we agreed to replace the monthly fee with an advance royalty payment of $15,000 per month and to reimburse Nanominerals for actual expenses incurred.
During the years ended December 31, 2015 and 2014, we utilized the services of Nanominerals to provide technical assistance and financing related activities primarily to the Clarkdale Slag Project. In addition, Nanominerals provided us with the use of its laboratory, instrumentation, milling equipment and research facilities. For the year ended December 31, 2015, we incurred total advanced royalty payments, consulting fees and reimbursement of expenses to Nanominerals of $180,000 and $45,000 and $360, respectively. $188,725 was due to Nanominerals as of December 31, 2015.
For the year ended December 31, 2014, we incurred total advanced royalty payments, consulting fees and reimbursement of expenses to Nanominerals of $180,000, $120,400 and $7,008, respectively. $13,365 was due to Nanominerals as of December 31, 2014.
During the year ended December 31, 2014, Nanominerals paid $100,000 of our expenses and, additionally, on December 18, 2014, relinquished $242,428 of amounts due to them. Such amounts were recorded as contributions to capital.
On December 23, 2014, we granted warrants for the purchase of 1,940,000 shares of common stock at $0.50 per share to Nanominerals. The warrants were granted in part to incentivize their continued efforts and support. The warrants expire on December 23, 2019.
On November 11, 2014, we granted warrants for the purchase of 1,000,000 shares of common stock at $0.30 per share to Nanominerals. The warrants were granted for investor relations, are fully vested and expire on November 11, 2019.
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Transactions with Verde River Iron Company and Harry B. Crockett
Under the terms of a letter agreement, dated November 22, 2006 and as amended on February 15, 2007, with VRIC, Harry B. Crockett and Gerald Lembas, and an Agreement and Plan of Merger with VRIC and Transylvania, dated and completed on February 15, 2007, we acquired all of the outstanding shares of Transylvania from VRIC through the merger of Transylvania into our wholly-owned subsidiary, Clarkdale Minerals LLC, a Nevada limited liability company. VRIC is an affiliate of one of our principal stockholders, Marcia Crockett, who is the widow of one of our former Board members, Harry B. Crockett. As a result of the merger, we own title to the approximately 200-acre property underlying a slag pile located in Clarkdale, Arizona from which we are seeking to recover base and precious metals through the reprocessing of slag material, approximately 600 acres of additional land adjacent to the project property and a commercial building in the town of Clarkdale, Arizona. In accordance with the terms of these agreements, we: (i) paid $10,100,000 in cash to VRIC, and (ii) issued 16,825,000 shares of our common stock to Harry B. Crockett and Gerald Lembas, the equity owners of VRIC, and certain designees of VRIC under the agreements, who are not our affiliates. The $10,100,000 cash payment to VRIC consisted of (i) $9,900,000 in connection with the acquisition of Transylvania and (ii) $200,000 paid to VRIC for an option to enter into the reorganization with Transylvania.
Under the terms of our 2007 agreements to acquire Transylvania with VRIC, we have the following continuing obligations:
| · | we agreed to continue to pay VRIC $30,000 per month (which amount we had previously paid to VRIC under the Joint Venture Agreement since June 2005) until the earlier of: (i) the date that is 90 days after we receive a bankable feasibility study, or (ii) the tenth anniversary of the date of the execution of the letter agreement, |
| · | we have agreed to pay VRIC $6,400,000 within 90 days after we receive a bankable feasibility study, |
| · | we have agreed to pay VRIC a minimum annual royalty of $500,000, commencing 90 days after we receive a bankable feasibility study, and an additional royalty consisting of 2.5% of the “net smelter returns” on any and all proceeds of production from the Clarkdale Slag Project. The minimum royalty remains payable until the first to occur of: (1) the end of the first calendar year in which the percentage royalty equals or exceeds $500,000, or (2) February 15, 2017. In any calendar year in which the minimum royalty remains payable, the combined minimum royalty and percentage royalty will not exceed $500,000, and |
| · | we have agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project after such time that we have constructed and are operating a processing plant or plants that are capable of processing approximately 2,000 tons of slag material per day at the Clarkdale Slag Project. The acquisition agreement does not include a specific provision with respect to the periods at the end of which “net cash flow” is measured, once the production threshold has been reached. Therefore, the timing and measurement of specific payments may be subject to dispute. The parties intend to negotiate a clarification of this provision in good faith before the production threshold has been reached. |
We have recorded a liability for the $30,000 monthly payment commitment using imputed interest based on our best estimate of our incremental borrowing rate. The effective interest rate used was 8.00%, resulting in an initial present value of $2,501,187 and a debt discount of $1,128,813. The expected term used was ten years, which represents the maximum term the VRIC liability is payable if the Project Funding Date does not occur by the tenth anniversary of the date of the execution of the letter agreement. We paid $2,610,000 to VRIC from February 15, 2007 (the acquisition date) through December 31, 2014, which included $1,591,226 of principal and $1,018,774 of interest. To address liquidity constraints, we deferred payment of the VRIC payable effective May 1, 2014. On December 18, 2014, VRIC relinquished $255,000 of payments due to them. The relinquishment was recorded as a contribution of capital.
During the year ended December 31, 2015, we made no payments related to the pursuant to the deferral recorded effective May 1, 2014.
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At December 31, 2015, the balance of the principal obligation owing under the letter agreement was $698,144. Actual payments made or relinquished under the letter agreement from January 1, 2014 through December 31, 2015 were as follows:
| Total Payments and Relinquishments | Amount Applied to Interest | Amount Applied to Principal | Balance | |||||||||||||
| At 12/31/13: | $ | 1,272,041 | ||||||||||||||
| Quarter Ended 3/31/14 | 90,000 | 19,615 | 70,385 | 1,207,050 | ||||||||||||
| Quarter Ended 6/30/14 | 90,000 | 18,198 | 71,802 | 1,140,751 | ||||||||||||
| Quarter Ended 9/30/14 | 90,000 | 16,753 | 73,247 | 1,073,117 | ||||||||||||
| Quarter Ended 12/31/14 | 105,000 | 14,457 | 90,543 | 1,004,121 | ||||||||||||
| 2014 Totals | $ | 375,000 | $ | 69,023 | $ | 305,977 | $ | 698,144 | ||||||||
| Quarter Ended 3/31/15 | - | - | - | 698,144 | ||||||||||||
| Quarter Ended 6/30/15 | - | - | - | 698,144 | ||||||||||||
| Quarter Ended 9/30/15 | - | - | - | 698,144 | ||||||||||||
| Quarter Ended 12/31/15 | - | - | - | 698,144 | ||||||||||||
| 2015 Totals | $ | - | $ | - | $ | - | $ | 698,144 | ||||||||
Other than the total $30,000 monthly payment, which includes imputed interest as set forth in the table above, we have accounted for the payments that are dependent upon future events as contingent payments. Upon meeting the contingency requirements described above, the purchase price of the Clarkdale Slag Project will be adjusted to reflect the additional consideration.
Transactions with Affiliate of Chief Financial Officer
During the years ended December 31, 2015 and 2014, we utilized the accounting firm of Cupit, Milligan, Ogden & Williams, an affiliate of Melvin L. Williams, our former Chief Financial Officer, to provide accounting support services.
We incurred total fees to Cupit, Milligan of $175,283 and $145,875 for the years ended December 31, 2015 and 2014, respectively. On December 23, 2014, our Board approved of entering into an exchange agreement with Cupit, Milligan which provided for issuance of 359,430 shares of our common stock directly to Mr. Williams for the balance due to Cupit Milligan of $115,018 as of November 30, 2014. The price of $0.32 per share used in the exchange was the closing market price of the Company’s common stock on the agreement date. At December 31, 2015 and 2014, we had outstanding balances due to the firm of $158,457 and $8,174, respectively.
These accounting support services included bookkeeping input for Clarkdale facility, assistance in preparing working papers for quarterly and annual reporting, and preparation of federal and state tax filings. These expenses do not include any fees for Mr. Williams’ time in directly supervising the support staff. Mr. Williams’ compensation has been provided in the form of salary. The direct benefit to Mr. Williams of the above Cupit, Milligan fees was $59,596 and $42,304 for the years ended December 31, 2015 and 2014, respectively.
Effective April 8, 2016, Mr. Williams resigned as our Chief Financial Officer.
Transactions with Ireland Inc.
We lease corporate office space under a sublease agreement with Ireland Inc. (“Ireland”). NMC is a shareholder in both the Company and Ireland. Additionally, our CEO provides consulting services to Ireland. The lease agreement commenced September 1, 2013, was for a two-year period and required monthly lease payments of $2,819 for the first year and $1,667 for the second year. The lease agreement was renewed on September 1, 2015 on a month-to-month basis for a period of 12 months, with $1,734 monthly lease payments. The lease agreement did not require payment of a security deposit.
Total rent expense incurred under this sublease agreement was $20,772 and $29,220 for the years ended December 31, 2015 and 2014, respectively. No amounts were due to Ireland as of December 31, 2015 or 2014.
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Transactions with Luxor Capital Group, L.P.
On September 18, 2013, we completed a private placement (the “Offering”) of secured convertible notes (the “Notes”) to certain investors (collectively, the “Purchasers”), resulting in aggregate gross proceeds to us of $4,000,000. We did not pay any commissions or brokers’ fees in connection with the Offering. The Notes were issued in reliance on exemptions from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 of Regulation D thereunder.
Luxor Capital Group, LP and certain of its associates and affiliates (collectively, “Luxor”) purchased $2,600,000 of the Notes in the Offering. Luxor and certain other funds managed by Luxor are principal stockholders of the Company, and Michael Conboy, one of our directors, currently serves as Luxor’s Director of Research.
In connection with the Offering, we entered into certain agreements, including a Secured Convertible Note Purchase Agreement, a Registration Rights Agreement and a Pledge and Security Agreement (the “Security Agreement”), each dated September 18, 2013, with the Purchasers. Our two wholly-owned subsidiaries, Clarkdale Metals Corp. and Clarkdale Minerals, LLC, agreed to guarantee the obligations underlying the Notes. We and our subsidiaries granted a first priority lien in all of our assets pursuant to the terms of the Security Agreement. The Bank of Utah has agreed to act as the collateral agent under the Security Agreement.
The Notes contain the following terms and conditions: (i) the Notes are due five (5) years from the date of issuance, provided that the Purchasers have a put option with respect to the Notes, on the second anniversary of the issuance date and every six (6) months thereafter, at par plus accrued and unpaid interest; (ii) the Notes may not be prepaid without the consent of the holders of the majority-in-interest of the Notes; (iii) the Notes have customary provisions relating to events of default; (iv) interest on the Notes accrues at a rate of 7% per annum, which will be payable in cash semi-annually; (v) following and during the continuance of an event of default, the Notes will bear interest at a rate per annum equal to the rate otherwise applicable thereto, plus an additional 2% per annum; and (vi) each Note is convertible at any time while the Note is outstanding, at the option of the holder, into shares of our common stock, at $0.40 per share. The Notes have customary anti-dilution provisions, including, without limitation, provisions for the adjustment to the exercise price based on certain stock dividends and stock splits. In addition, the conversion price of the Notes may require adjustment upon the issuance of equity securities (including the issuance of debt convertible into equity) by us at prices below the then existing conversion price, subject to certain exempt issuances which will not result in an adjustment to the exercise price.
The Notes are secured by a first priority lien on all of our assets and our two subsidiaries in favor of the Purchasers. However, we have the right to cause defeasance of the liens and to reduce the interest rate on the Notes to 4% per annum, if, at any time, we deposit additional collateral and other agreements, satisfactory to the holders of the majority-in-interest of the Notes, with the collateral agent. We have agreed not to incur any (a) additional secured indebtedness, or (b) indebtedness of any kind (unsecured or secured) with a maturity of less than 5 years from the issuance date of the Notes, in each case, without the written consent of the holders of the majority-in-interest of the Notes, except for purposes of defeasance or trade payables in the ordinary course of business.
In connection with the Offering, our Board agreed to waive certain provisions of our Rights Agreement, dated November 12, 2009 (the “Rights Agreement”), including the 15% limitation currently in the Rights Agreement with respect to Luxor, and to allow Luxor to become the beneficial owners of up to 22% of the shares of our common stock, without being deemed to be an “acquiring person” under the Rights Agreement.
Following demand by Luxor of the repayment of the amount of all of the outstanding principal and interest owing on their Notes, we, lacking sufficient funds to make such repayment, agreed to allow Luxor to convert such amount into shares of our restricted common stock at a rate of $0.035 per share. On March 18, 2016, Luxor provided the Company with Conversion Notices consistent with such terms and conditions. In the aggregate, Luxor converted $2,691,000 owing on their Notes in exchange for 76,885,714 shares of the Company’s common stock. The Company has subsequently cancelled Luxor’s Notes.
The Company also agreed to sell to Luxor 42,857,143 shares of our common stock, at a purchase price of $0.035 per share, for a total consideration of $1,500,000. On March 18, 2016, we completed a private placement (the “2016 Offering”) of our securities to Luxor on such terms and conditions. The securities were issued in reliance on exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D thereunder. We intend to use the net proceeds from the 2016 Offering for general working capital purposes. In connection with the 2016 Offering, we entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) and a Registration Rights Agreement, each dated March 18, 2016, with Luxor. The Common Stock Purchase Agreement contains representations and warranties of the Company and Luxor that are customary for transactions of the type contemplated in connection with the 2016 Offering.
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Luxor also agreed, as a condition of the 2016 Offering, that all of its 16,532,789 currently owned warrants shall not be exercisable until at least September 18, 2016. In addition, in connection with the 2016 Offering, our Board agreed to waive certain provisions of the Rights Agreement with respect to accounts managed by Luxor. In particular, we agreed to further waive all of the existing limitations under the Rights Agreement so that Luxor would not an “acquiring person” under the Rights Agreement under any circumstance. Following the 2016 Offering, Luxor became the beneficial owner (as defined in Rule 13d-3 of the Exchange Act of approximately 49.83% of our common stock.
The Board also authorized, subject to stockholder approval, certain amendments to our Articles of Incorporation and Amended and Restated Bylaws that, among other things, would eliminate a classified Board of Directors and increase the number of authorized shares of our capital stock. The Board of Directors will call for an annual meeting of our stockholders and will nominate five designees, three of which shall be designees of Luxor, for election as directors at such meeting.
In addition, pursuant to a letter agreement between us and Luxor, dated March 18, 2016 (the “Letter Agreement”), Luxor agreed that it, or its designees, will invest up to an additional $1,250,000 in to be issued shares of our common stock, at a purchase price of $0.045 per share, upon the completion of certain milestones. The securities will be issued in reliance on exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D thereunder. We intend to use the net proceeds from such sales for general working capital purposes. In connection with the additional investment described in the Letter Agreement, we entered into a common stock purchase agreement, dated March 18, 2016 (the “Second Common Stock Purchase Agreement”) with Luxor Capital Group, LP, an affiliate of Luxor (“Luxor Capital”), which, among other things, sets forth the milestones and contains customary representations and warranties of the Company and Luxor Capital. In addition, upon the completion of certain milestones set forth in the Second Common Stock Purchase Agreement, we will enter into a Registration Rights Agreement with Luxor Capital or its designees.
Item 14. Principal Accountant Fees and Services
The following table shows the fees paid by us or billed or expected to be billed for the audit and other services provided by BDO USA, LLP, our independent auditors for the years ended December 31, 2015 and 2014:
| 2015 | 2014 | |||||||
| Audit Fees | $ | 132,228 | $ | 124,852 | ||||
| Audit-Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 132,228 | $ | 124,852 | ||||
As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees,” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning, and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”
Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditors in order to ensure that they do not impair the auditors’ independence. The SEC’s rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee’s responsibility for administration of the engagement of the independent auditors.
Consistent with the SEC’s rules, the audit committee charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent auditors to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
EXHIBIT INDEX
The following is a complete list of exhibits filed as part of this Report, some of which are incorporated herein by reference from the reports, registration statements and other filings of the issuer with the Securities and Exchange Commission, as referenced below:
| Reference Number |
Item | |
| 3.1 | Amended and Restated Articles of Incorporation (1) | |
| 3.2 | Amended and Restated Bylaws (2) | |
| 3.3 | First Amendment to the Amended and Restated Bylaws of Searchlight Minerals Corp.(3) | |
| 4.1 | Specimen Stock Certificate (4) | |
| 4.2 | Rights Agreement, dated August 24, 2009, between Searchlight Minerals Corp. and Empire Stock Transfer Inc. (5) | |
| 10.1 | 2009 Stock Incentive Award Plan, adopted December 15, 2009 (6) | |
| 10.2 | 2009 Equity Incentive Plan for Directors, adopted December 15, 2009 (6) | |
| 10.3 | 2007 Stock Option Plan (7) | |
| 10.4 | Assignment Agreement dated for reference June 1, 2005 between Searchlight Minerals Corp. and Nanominerals Corp. (8) | |
| 10.5 | First Amendment to Assignment Agreement between Nanominerals Corp. and Searchlight Minerals Corp. dated August 31, 2005 (9) | |
| 10.6 | Second Amendment to Assignment Agreement between Nanominerals Corp. and Searchlight Minerals Corp. dated October 24, 2005 (10) | |
| 10.7 | Employment Agreement between Searchlight Minerals Corp. and Carl S. Ager dated as of January 1, 2006 (11) | |
| 10.8 | Employment Agreement between Searchlight Minerals Corp. and Melvin L. Williams dated as of June 14, 2006 (12) | |
| 10.9 | Letter Agreement dated November 22, 2006 among Verde River Iron Company, LLC, Harry B. Crockett, Gerald Lembas and Searchlight Minerals Corp. (13) | |
| 10.10 | Notice of Exercise Option (14) | |
| 10.11 | Amendment No. 1 to Letter Agreement dated February 15, 2007 (15) | |
| 10.12 | Agreement and Plan of Merger dated February 15, 2007 between Verde River Iron Company, LLC, Transylvania International, Inc., Clarkdale Minerals LLC and Searchlight Minerals Corp. (16) | |
| 10.13 | Special Warranty Deed dated February 15, 2007 (16) | |
| 10.14 | Bill of Sale dated February 15, 2007 (16) | |
| 10.15 | Effluent lease dated August 25, 2004 between Town of Clarkdale, Transylvania International, Inc. and Verde River Iron Company, LLC (16) | |
| 10.16 | First Amendment to Employment Agreement dated February 16, 2007 between Searchlight Minerals Corp. and Carl S. Ager. (16) | |
| 10.17 | First Amendment to Employment Agreement dated February 16, 2007 between Searchlight Minerals Corp. and Melvin L. Williams. (17) | |
| 10.18 | Employment Agreement with Martin B. Oring, dated October 1, 2010, and as amended on November 8, 2010 (18), (19) | |
| 10.19 | Non-Qualified Stock Option Agreement with Martin B. Oring, dated October 1, 2010 (18) | |
| 10.20 | Mining Claim Purchase Agreements regarding transfer of title to Searchlight Claims (20) | |
| 10.21 | Development Agreement, dated as of January 9, 2009, between Clarkdale Minerals, LLC and the Town of Clarkdale, Arizona (21) | |
| 10.22 | Third Amendment to Assignment Agreement between Nanominerals Corp. and Searchlight Minerals Corp. dated July 25, 2011 (22) | |
| 10.23 | Form of Securities Purchase Agreement, dated June 7, 2012 (23) | |
| 10.24 | Form of Registration Rights Agreement, dated June 7, 2012 (23) | |
| 10.25 | Form of Voting Agreement, dated June 7, 2012 (23) | |
| 10.26 | Form of Secured Convertible Note Purchase Agreement, dated September 18, 2013, by and between Searchlight Minerals Corp. and the investors listed on Schedule I attached thereto (24) | |
| 10.27 | Form of Secured Convertible Promissory Note of Searchlight Minerals Corp. dated September 18, 2013 (24) |
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| 10.28 | Form of Registration Rights Agreement, dated September 18, 2013, between Searchlight Minerals Corp. and each of the several purchasers signatory thereto (24) | |
| 10.29 | Form of Pledge and Security Agreement, dated September 18, 2013, by and among Searchlight Minerals Corp., Clarkdale Minerals, LLC, and Clarkdale Metals Corp. in favor of the Collateral Agent on behalf of the Secured Parties listed on the signature pages thereto (24) | |
| 10.30 | First Amendment to Voting Agreement and Irrevocable Proxy Coupled with Interest, effective September 18, 2013, by and among Searchlight Minerals Corp. and each of the undersigned stockholders thereto (24) | |
| 10.31 | Sublease Agreement, dated September 1, 2013, by and between Ireland, Inc. and Searchlight Minerals Corp. (24) | |
| 10.32 | Effluent lease dated August 25, 2005 between Town of Clarkdale and Clarkdale Minerals, LLC (25) | |
| 10.33 | Form of Warrant, dated October 24, 2014 (26) | |
| 10.34 | Letter from Cupit, Milligan, Ogden & Williams, dated as of December 23, 2014 (27) | |
| 10.35 | Common Stock and Warrant Purchase Agreement, dated March 25, 2015 (28) | |
| 10.36 | Warrant, dated March 25, 2015 (28) | |
| 10.37 | Registration Rights Agreement, dated March 18, 2015 (28) | |
| 10.38 | Form of Registration Rights Agreement, dated March 18, 2015 (28) | |
| 10.39 | Form of Warrant, dated May 21, 2015 (29) | |
| 10.40 | Form of Registration Rights Agreement, dated May 21, 2015 (29) | |
| 10.41 | Form of Warrant, dated July 30, 2015 (30) | |
| 10.42 | Form of Registration Rights Agreement, dated July 30, 2015 (30) | |
| 10.43 | Form of Amendment to Secured Convertible Promissory Note, dated March 18, 2016 (31) | |
| 10.44 | Common Stock Purchase Agreement, dated March 18, 2016 (31) | |
| 10.45 | Form of Registration Rights Agreement, dated March 18, 2016 (31) | |
| 10.46 | Letter Agreement, dated March 18, 2016 (31) | |
| 10.47 | Second Common Stock Purchase Agreement, dated March 18, 2016 (31) | |
| 14.1 | Code of Ethics (33) | |
| 21.1 | List of Wholly Owned Subsidiaries (32) | |
| 23.3 | Consent BDO USA, LLP* (32) | |
| 31.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934* | |
| 32.1 | Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
| 95.1 | Mine Safety Disclosure (32) | |
| 99.1 | Audit Committee Charter (33) | |
| 99.2 | Disclosure Committee Charter (34) | |
| 99.3 | Related Party Transactions Policy (35) | |
| 99.4 | Compensation Committee Charter (36) | |
| 99.5 | Nominating and Corporate Governance Charter (36) | |
| 99.6 | Corporate Governance Guidelines (36) | |
| 101.INS | XBRL Instance Document (32) | |
| 101.SCH | XBRL Taxonomy Extension Schema Document (32) | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (32) | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (32) | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document (32) | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (32) |
| (1) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 28, 2009. |
| (2) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on April 29, 2009. |
| (3) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 24, 2013. |
| (4) | Filed with the SEC as an exhibit to our Registration Statement on Form 10-SB originally filed on July 11, 2000. |
| (5) | Filed with the SEC as an exhibit to our Registration Statement on Form 8-A filed on August 25, 2009 (No. 000-30995), which includes as Exhibit A thereto the Form of Right Certificate and as Exhibit B thereto the Summary of Common Share Purchase Rights. |
| (6) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on December 17, 2009. |
| (7) | Filed with the SEC as an exhibit to our proxy statement on Schedule 14A filed on May 22, 2007. |
| (8) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 16, 2005. |
| (9) | Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on November 21, 2005. |
| (10) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 28, 2005. |
| (11) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on March 2, 2006. |
| (12) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 20, 2006. |
24
| (13) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on November 28, 2006. |
| (14) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on January 16, 2007. |
| (15) | Filed with the SEC as an exhibit to our registration statement on Form S-1/A (No. 333-132929) filed on February 12, 2009. |
| (16) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 22, 2007. |
| (17) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on February 23, 2007. |
| (18) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 4, 2010. |
| (19) | Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on November 9, 2010. |
| (20) | Filed with the SEC as an exhibit to our registration statement on Form S-1/A (No. 333-132929) filed on December 23, 2008. |
| (21) | Filed with the SEC as an exhibit to our registration statement on Form S-1/A (No. 333-132929) filed on May 7, 2009. |
| (22) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on July 27, 2011. |
| (23) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on June 11, 2012. |
| (24) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 24, 2013. |
| (25) | Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on November 12, 2013 |
| (26) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on October 28, 2014 |
| (27) | Filed with the SEC as an exhibit to our Current Report on Form 8-K fled on December 29, 2014 |
| (28) | Filed with the SEC as an exhibit to our Current Report on Form 8-K fled on March 30, 2015 |
| (29) | Filed with the SEC as an exhibit to our Current Report on Form 8-K fled on May 28, 2015 |
| (30) | Filed with the SEC as an exhibit to our Current Report on Form 8-K fled on August 4, 2015 |
| (31) | Filed with the SEC as an exhibit to our Current Report on Form 8-K fled on March 23, 2016 |
| (32) | Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on April 5, 2016. |
| (33) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 27, 2006. |
| (34) | Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on April 13, 2004. |
| (35) | Filed with the SEC as an exhibit to our registration statement on Form S-1/A (No. 333-132929) filed on September 2, 2009. |
| (36) | Filed with the SEC as an exhibit to Form 10-K/A filed on April 30, 2010. |
| * | Filed herewith |
25
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.
| Date: April 29, 2016 | SEARCHLIGHT MINERALS CORP. | |
| a Nevada corporation | ||
| By: | /s/ MARTIN B. ORING | |
| Martin B. Oring | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ MARTIN B. ORING | Chief Executive Officer, President, Chief Financial Officer and Director | April 29, 2016 | ||
| Martin B. Oring | (Principal Executive Officer and Principal Accounting Officer) | |||
| /s/ CARL S. AGER | Vice President, Secretary, Treasurer and Director | April 29, 2016 | ||
| Carl S. Ager | ||||
| /s/ MICHAEL W. CONBOY | Director | April 29, 2016 | ||
| Michael W. Conboy | ||||
| /s/ JOHN E. MACK | Director | April 29, 2016 | ||
| John E. Mack | ||||
| /s/ JORDAN M. ESTRA | Director | April 29, 2016 | ||
| Jordan M. Estra |
26
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
I, Martin B. Oring, certify that:
| 1. | I have reviewed this annual report on Form 10-K/A of Searchlight Minerals Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
SEARCHLIGHT MINERALS CORP. | ||
| Date: April 29, 2016 | By: | /s/ MARTIN B. ORING |
| Martin B. Oring | ||
| Chief Executive Officer and Chief Financial Officer | ||
EXHIBIT 32.1
CERTIFICATION OF CEO AND CFO
PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K/A of Searchlight Minerals Corp. (the “Company”) for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Martin B. Oring, as Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| SEARCHLIGHT MINERALS CORP. | ||
| Date: April 29, 2016 | By: | /s/ MARTIN B. ORING |
| Martin B. Oring | ||
| Chief Executive Officer and Chief Financial Officer | ||