2006 Annual Report 10-KSB
December 31, 2006
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ______ to _______
Commission file number: 02-69494
GLOBAL GOLD CORPORATION
(Name of small business issuer in its charter)
Delaware 13-03025550
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
45 East Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (203) 422-2300
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock
Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]
Check whether the issuer (l) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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: ____
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB [ ]
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 issuer's revenues for its most recent fiscal year ending December 31, 2006
were $5,985.
The aggregate market value of the voting stock held by non-affiliates of the
Company computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of March 29, 2007, was
$24,584,988.
As of March 29, 2007 there were 33,451,885 shares of the registrant's Common
Stock outstanding.
Transitional Small Business Disclosure Formats (Check One): Yes_____ No__X___
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement relating to the Annual Meeting of
Stockholders scheduled to be held on or around June 15, 2007 are incorporated by
reference into Part III (Items 10 through 14) of this Report.
1
Cautionary Note Regarding Forward-Looking Statements
This Annual Report includes statements of our expectations, intentions plans and
beliefs that constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended and are intended to come within the
safe harbor protection provided by those sections. These statements, which
involve risks and uncertainties, relate to the discussion of business strategies
of Global Gold Corporation ("the Company" or "Global Gold") and our expectations
concerning future operations, margins, profitability, liquidity and capital
resources and to analyses and other information that are based on forecasts of
future results and estimates of amounts not yet determinable. We have used words
such as "may," "will," "should," "expects," "intends," "plans," "anticipates,"
"believes," "thinks," "estimates," "seeks," "expects," "predicts," "could,"
"projects," "potential" and other similar terms and phrases, including
references to assumptions, in this report to identify forward-looking
statements. These forward-looking statements are made based on expectations and
beliefs concerning future events affecting the Company and are subject to
uncertainties, risks and factors relating to our operations and business
environments, all of which are difficult to predict and many of which are beyond
the Company's control, that could cause our actual results to differ materially
from those matters expressed or implied by these forward-looking statements.
These risks and other factors include those listed under "Risk Factors" and
elsewhere in this report. The following factors, among others, could cause our
actual results and performance to differ materially from the results and
performance projected in, or implied by the forward-looking statements:
o the Company's history of losses and expectation of further losses;
o the effect of poor operating results on the Company;
o the effect of growth on the Company's infrastructure and resources;
o the Company's ability to expand its operations in both new and
existing locations and the Company's ability to develop and mine
its current and new sites;
o the Company's ability to raise capital;
o the Company's ability to fully utilize and retain new executives;
o the impact of litigation, including international arbitrations;
o the impact of federal, state, local or foreign government regulations;
o the effect of competition in the mining industry; and
o economic and political conditions generally.
The Company assumes no obligation to publicly update or revise these
forward-looking statements for any reason, or to update the reasons actual
results could differ materially from those anticipated in, or implied by, these
forward-looking statements, even if new information becomes available in the
future.
ITEM 1. DESCRIPTION OF BUSINESS
(1) GENERAL OVERVIEW
Global Gold is currently in the development stage. It is engaged in exploration
for, and development and mining of, gold, uranium, and other minerals in
Armenia, Canada and Chile. The Company's headquarters are located in Greenwich,
CT and its subsidiaries maintain offices and staff in Yerevan, Armenia and
Santiago, Chile. The Company was incorporated as Triad Energy Corporation in the
State of Delaware on February 21, 1980 and, as further described hereafter,
conducted other business prior to its re-entry into the development stage of
mineral exploration and mining on January 1, 1995. During 1995, the Company
changed its name from Triad Energy Corporation to Global Gold Corporation to
pursue certain gold and copper mining rights in the former Soviet Republics of
Armenia and Georgia. The Company's stock is publicly traded. The Company employs
81 people globally on a year round basis and an additional 120 people on a
seasonal basis.
2
The Company's current production, exploration, and development focus in
Armenia primarily revolves around the North Central Armenian Belt, where it is
integrating the Hankavan mine deposit, Tukhmanuk mine, and other adjacent
exploration sites. The Company has been conducting a drill program there to
confirm the historical data and develop mining plans. The Company also engages
in exploration outside the North Central Belt at the Getik and Marjan
properties, and holds royalty and participation rights in other locations in the
country through other affiliated and subsidiary companies.
In Canada, the Company is currently engaged in uranium exploration activities.
In Chile, the Company is currently engaged in copper and gold exploration
activities.
The subsidiaries through which the Company operates are as follows:
On January 24, 2003, the Company formed Global Oro LLC and Global Plata LLC, as
wholly owned subsidiaries, in the State of Delaware. These companies were formed
to be equal joint owners of a Chilean limited liability company, Minera Global
Chile Limitada ("Minera Global"), formed as of May 6, 2003, for the purpose of
conducting operations in Chile.
On August 18, 2003, the Company formed Global Gold Armenia LLC ("GGA Cayman"),
as a wholly owned subsidiary, which in turn formed Global Gold Mining LLC
("Global Gold Mining"), as a wholly owned subsidiary, both in the State of
Delaware. Global Gold Mining was qualified to do business as a branch operation
in Armenia and owns assets and shares of operating companies in Armenia.
On December 21, 2003, Global Gold Mining acquired 100% of the Armenian limited
liability company SHA, LLC (renamed Global Gold Hankavan, LLC ("GGH") as of July
21, 2006), which held the license to the Hankavan and Marjan properties in
Armenia. On January 25, 2005, GGH submitted applications to the Armenian
government for exploration licenses for five additional mineral bearing
properties in North Central Armenia, all proximate to Hankavan.
On August 1, 2005, Global Gold Mining acquired the Armenian limited liability
company Mego-Gold, LLC, which is the licensee for the Tukhmanuk mining property
and seven surrounding exploration sites.
On January 31, 2006, Global Gold Mining closed a transaction to acquire 80% of
the Armenian company, Athelea Investments, CJSC (renamed "Getik Mining Company,
LLC") and its approximately 27 square kilometer Getik gold/uranium exploration
license area in the northeast Geghargunik province of Armenia.
On January 5, 2007, the Company formed Global Gold Uranium, LLC ("Global Gold
Uranium"), as a wholly owned subsidiary, in the State of Delaware, to operate
the Company's uranium exploration activities in Canada. Global Gold Uranium was
qualified to do business in the Canadian Province of Newfoundland and Labrador.
The Company is a reporting company and is therefore subject to the informational
requirements of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and accordingly files its Annual Report on Form 10-KSB,
Quarterly Reports on Form 10-QSB, Definitive Proxy Statements, Current Reports
on Form 8-K, and other information with the Securities and Exchange Commission
(the "SEC"). The public may read and copy any materials filed with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549.
Please call the SEC at (800) SEC-0330 for further information on the Public
Reference Room. As an electronic filer, the Company's public filings are
maintained on the SEC's Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC. The address of that website is http://www.sec.gov.
The Company makes its Annual Report on Form 10-KSB, Quarterly Reports on Form
10-QSB, Definitive Proxy Statements, Current Reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act accessible free of charge through the Company's Internet site after
the Company has electronically filed such material with, or furnished it to, the
SEC. In 2006, the Company filed Amended Forms 10-KSB/A. The address of that
website is http:// www.globalgoldcorp.com. However, such reports may not be
accessible through the Company's website as promptly as they are accessible on
the SEC's website.
(2) INITIAL ARMENIAN MINING PROJECT
In 1996, the Company acquired rights under a Joint Venture Agreement with the
Ministry of Industry of Armenia and Armgold, S.E., the Armenian state
enterprise, formed to provide capital and multistage financing of the Armenian
gold industry, which rights were finalized under the Second Armenian Gold
Recovery Company Joint Venture Agreement, dated as of September 30, 1997.
3
As of January 31, 1997, the Company and Global Gold Armenia Limited, the
Company's then wholly-owned Cayman Islands subsidiary ("GGA Cayman"), reached an
initial agreement with First Dynasty Mines, Ltd., whose name changed to Sterlite
Gold Ltd. on July 5, 2002 ("Sterlite"), a Canadian public company and whose
shares are traded on the Toronto Stock Exchange with respect to the initial
Armenian project. The Company, GGA Cayman and Sterlite entered into a definitive
agreement dated May 13, 1997. Under such agreement, Sterlite acquired all of the
stock of GGA Cayman, subject to certain conditions, by advancing funds in stages
necessary for the implementation of the tailing project and the preparation of
engineering and business plan materials for the Armenian Joint Venture and
delivering 4,000,000 shares of First Dynasty (later Sterlite) Common Stock to
the Company (the "FDM Agreement"). The parties thereafter amended the FDM
Agreement on July 24, 1998. Pursuant to the FDM Agreement, the Company retains
the right until December 31, 2009 to elect to participate at a level of up to
20% with Sterlite, or any of its affiliates or successors in interest, in any
exploration project undertaken by them in Armenia. As of December 31, 2004, the
Company did not own any shares of Sterlite common stock. In 2006, Vedanta
Resources plc ("Vedanta") acquired control of Sterlite through Twin Star
International Limited ("TSI"), an indirect wholly-owned subsidiary of Vedanta.
For a further description of the background concerning the FDM Agreement, an
interested person can review the annual reports previously filed by the Company
with the SEC.
3) PRIOR GEORGIAN MINING PROJECT
As of December 31, 1997, the Company terminated its pursuit of the then
contemplated mining project in the country of Georgia. In 2006, the Company
reviewed mining and exploration projects in Georgia for potential acquisition
and development, but did not consummate any transactions.
For a further description of the background concerning the Georgian mining
project, an interested person can review the annual reports previously filed by
the Company with the SEC.
(4) ARMENIA PROPERTIES
The Company operates an office in Yerevan, Armenia where it manages its
exploration and mining activities as well as reviewing potential acquisitions. A
map showing the location of the properties in Armenia is located on the
Company's website.
Hankavan
Hankavan is located in central Armenia in the Kotayk province between Vanadzor
and Meghradzor north of the Marmarik River.
GGH acquired Hankavan licenses in December of 2003 through the acquisition of
the Armenian company SHA, LLC (since renamed Global Gold Hankavan, LLC ("GGH")),
and has been conducting a drilling program along with other exploration
activities to confirm the historical feasibility work done on the copper,
molybdenum and gold mineralization in the Soviet era. GGH also expanded its
exploration activities to six other, smaller license areas in and around
Hankavan. In addition, GGH is conducting exploration and planning to determine
the feasibility of a quick start mining operation for copper oxide in this area.
See "Foreign Risks" under Risk Factors, below, for a description of licensing
issues.
Marjan
The Marjan mining property is located in Southwestern Armenia, along the
Nakichevan border in the Syunik province.
In 2006, GGH engaged in mapping, sampling and other exploration work at Marjan.
This property was previously explored during the Soviet era. Global Gold Mining
acquired SHA LLC, the Armenian company which held the license to the property in
December 2003.
As of October 28, 2005, Global Gold Mining entered into a Joint Venture
Agreement with Caucasus Resources Pty Ltd. ("CR") (which is a subsidiary of
Iberian Resources Limited ("Iberian")) to form the "Marjan Mining Company, LLC
("Marjan Mining") to explore and develop the Marjan property.
As of August 18, 2006, Global Gold Mining and CR have terminated the Marjan
Mining Company Joint Venture Agreement entered into as of October 28, 2005, with
Iberian devoting more of its resources to mining properties in Southern Armenia.
As a result of such termination, the two companies will have no further
obligations toward one another with respect to the Marjan mining property, and
GGH has continued to operate such property as the sole license holder.
4
See "Foreign Risks" under Risk Factors, below, for a description of licensing
issues.
Tukhmanuk
The Tukhmanuk property is adjacent to the Hankavan property in central Armenia,
between the Aragatsotn and Kotayk provinces. The property includes seven
surrounding exploration sites as well as other assets. In addition to the
central property, the acquisition included a 200,000 tonne per year capacity
plant.
In 2006, Global Gold Mining drilled over 10,000 meters of exploration for gold
and polymetallic mineralization at Tukhmanuk, mined approximately 30,000 tonnes
of ore, and engaged in small scale, experimental processing of concentrate at
the pilot plant.
On August 1, 2005, Global Gold Mining entered into a share purchase agreement to
acquire the Armenian limited liability company Mego-Gold, LLC which is the
licensee for the Tukhmanuk mining property. On August 2, 2006, Global Gold
Mining exercised its option to acquire the remaining forty nine percent (49%) of
the Armenian limited liability company Mego-Gold, LLC, which is the licensee for
the Tukhmanuk mining property and surrounding exploration sites as well as the
owner of the related processing plant and other assets. According to the August
1, 2005 share purchase agreement, Global Gold Mining acquired a fifty one
percent (51%) interest for one million five hundred thousand dollars
($1,500,000) and was to pay another two million dollars ($2,000,000) by August
1, 2007 for the remaining forty nine percent (49%). On July 19, 2006, Global
Gold Mining entered into an amendment of the August 1, 2005 share purchase
agreement pursuant to which Global Gold Mining acquired the remaining forty nine
percent (49%) in exchange for one million dollars ($1,000,000) and five hundred
thousand (500,000) restricted shares of the Company's common stock. The July 19,
2006 amendment also contained a contingency allowing the sellers to sell back
the 500,000 shares on or before September 15, 2007 for a payment of $1 million
if the Company's stock is not traded at or above two dollars and fifty cents
($2.50) at any time between July 1, 2007 and August 31, 2007. On September 12,
2006, Global Gold Mining separately loaned two hundred thousand dollars
($200,000) to Karapet Khachatryan, a seller of Mego-Gold LLC which may be offset
against the potential $1,000,000 liability.
See "Foreign Risks" under Risk Factors, below, for a description of licensing
issues.
Getik
The Getik property is located in the northeast Geghargunik province of Armenia.
On January 31, 2006, Global Gold Mining closed the transaction agreed to in the
context of the share purchase agreement, dated as of January 23, 2006, with
Athelea Investments, CJSC ("AI") and Messrs. Simon Cleghorn, Sergio DiGiovani,
Armen Ghazarian, and Frank Pastorino (the "Sellers") to transfer 80% of the
shares of AI to Global Gold Mining in exchange for 100,000 shares of the
Company's common stock. All assets (including the "Athelea" name) not related to
the approximately 27 square kilometer Getik gold/uranium exploration license
area were transferred back to the Sellers. AI was renamed the "Getik Mining
Company, LLC." A three-year exploration program at the Getik property has been
approved and is being implemented. Mr. Frank Pastorino is an officer of the
Company and Mr. Simon Cleghorn was an officer of the Company until September 30,
2006.
See "Foreign Risks" under Risk Factors, below, for a description of licensing
issues.
Lichkvadz-Tei and Terterasar
Lichtvadz-Tei and Terterasar are located in the southern Armenia province of
Syunik.
On August 15, 2005, Global Gold Mining entered into a joint venture agreement
with Iberian subsidiary CR to form the Aigedzor Mining Company, LLC ("AMC") on
an 80% CR, 20% Global Gold Mining basis in anticipation of jointly acquiring and
developing (a) for the Lichkvadz-Tei and Terterasar mining properties as well as
the associated plant and assets in southern Armenia through the Armenian limited
liability company Sipan 1, LLC which is the licensee ("Sipan 1"); and (b)
mineral exploration and related properties within a 20 kilometer radius of the
southern Armenian town of Aigedzor.
Pursuant to the option initially held by Global Gold, on October 27, 2005, AMC
entered into a share purchase agreement (the " Sipan 1 SPA") with Mr. Albert
Sakhkalian, and acquired 100% of the shares of Sipan 1. Sipan 1 is the licensee
for the Lichkvadz-Tei and Terterasar mining properties as well as the owner of
the associated plant and assets in southern Armenia.
5
On December 19, 2006, Global Gold Mining entered a "Restructuring, Royalty, and
Joint Venture Termination Agreement" with CR. The agreement restructures the
parties' Aigedzor Mining Company Joint Venture to transfer Global Gold Mining 's
20% interest to CR in exchange for: one million dollars; a 2.5% Net Smelter
Return royalty payable on all products produced from the Lichkvaz and Terterasar
mines as well as from any mining properties acquired in a 20 kilometer radius of
the town of Aigedzor in southern Armenia; and five million shares of Iberian's
common stock, which are restricted for one year. If the average closing market
price for Iberian shares Common Stock for any consecutive period of thirty
trading days during the one year restriction period shall drop below AUS$0.50,
Global Gold Mining shall, subject to the receipt by Iberian of any necessary
approvals under the Listing Rules of Australian Stock Exchange Limited, promptly
receive from Iberian an additional 2.5 million shares of Iberian's common stock.
Global Gold Mining retains the right to participate up to 20% in any new
projects undertaken by Iberian or its affiliates in Armenia until August 15,
2015
See "Foreign Risks" under Risk Factors, below, for a description of licensing
issues.
(5) CHILE PROPERTIES
The Company operates an office in Santiago, Chile which is engaged in
exploration activities and acquisition review. A map showing the location of the
property in Chile is located on the Company's website.
Santa Candelaria
Santa Candelaria is located in Comuna de Diego de Almagro, Region III of Chile.
The Company, on January 15, 2003, entered into an option/purchase/lease
agreement with Alfredo Soto Torino and Adrian Soto Torino for the purchase of
copper gold properties in Chanaral District III Chile (the Candelaria 1 to 3,
the Santa Candelaria 1 to 8 and the Torino I mining claims 1 through 7 and
Torino II mining claims 1 through 11) (the "Chilean Agreement"). The Company
currently refers to all of the properties acquired by the Chilean Agreement as
"Santa Candelaria." The Agreement was converted into a purchase agreement on
February 4, 2004.
After certain exploration activities, including limited drilling in 2005, the
Company determined that it should discontinue its exploration operations at
Santa Candelaria, and wrote down its investment. Further, on January 13, 2006,
Minera Global entered into a purchase, option, and royalty agreement with Mr.
Adrian Soto Torino, a citizen of Chile ("AST") to transfer the mining
concessions Candelaria 1, 2, and 3 to AST to mine the gold property and pay
Minera Global a net smelter royalty of 10% until such time as Minera Global has
been paid $75,000 and thereafter a net smelter royalty of 2% for the life of the
mine. All liabilities and fees associated with the property are the
responsibility of AST, and Minera Global retains the option to reacquire the
mining concession upon 60 days notice and payment of 1,000,000 Chilean pesos
(approximately $1,883 USD).
(6) CANADA PROPERTIES
A map showing the location of the properties in Canada is located on the
Company's website.
Grand Lake and Shallow Lake
The Grand Lake and Shallow Lake properties are located in the Canadian province
of Newfoundland and Labrador.
On January 18, 2007, Global Gold Uranium entered into a "Labrador Uranium Claims
Agreement" with Messrs. Alexander Turpin and James Weick to acquire an option to
acquire a one hundred percent interest ownership of mineral license rights at or
near Grand Lake (approximately 1,850 acres) and Shallow Lake (approximately
5,750 acres). Global Gold Uranium will be solely responsible for exploration and
management during the option periods and can exercise the option to acquire one
hundred percent of the license rights at either property by granting the sellers
a 1.5% NSR royalty which can be bought out for $2,000,000 cash or at the
seller's option in common stock of the Company valued at the six month weighted
average of the stock a the time of exercise. All dollar references are to
Canadian dollars. Global Gold Uranium will earn a One Hundred Percent (100%)
option in the Licenses by paying cash and common stock. In addition, Global Gold
Uranium has completed staking 300 claims (approximately 18,531 acres) in the
immediate vicinity of the Grand Lake and Shallow Lake properties.
6
(7) ENVIRONMENT AND ETHICAL MATTERS
The Company's policy on environmental matters is stated in its Code of Business
Conduct and Ethics (see the Company's website), and requires compliance with all
relevant laws and regulations. Specifically, the Company intends to conduct its
business in a manner that is compatible with the balanced environmental and
economic needs of the communities in which it operates. The Company is committed
to continuous efforts to improve environmental performance throughout its
operations. Accordingly, the Company's policy is to: comply with international
standards as developed by the World Bank; comply with all applicable
environmental laws and regulations and apply responsible standards where laws
and regulations do not exist; assess all projects which will include a review of
the environmental issues associated with project development; make available
these assessments to the appropriate government agencies for review and
approval; encourage concern and respect for the environment, emphasize every
employee's responsibility in environmental performance, and foster appropriate
operating practices and training; manage its business with the goals of
preventing incidents and controlling emissions and wastes to below harmful
levels; design, operate, and maintain facilities to this end; respond quickly
and effectively to incidents resulting from its operations, in cooperation with
industry organizations and authorized government agencies; and undertake
appropriate reviews and evaluations of its operations to measure progress and to
foster compliance with these policies. The Company has budgeted and made
payments to for environmental compliance.
(8) RISK FACTORS
The following risk factors should be considered in connection with an evaluation
of the business of the Company:
DEVELOPMENT STAGE COMPANY
Since the Company did not engage in the active conduct of a trade or business
aside from development and exploration activities, it has not generated any
revenues to date, with the exception of revenue from the transaction with
Iberian Resources at the end of 2006 and minimal sales of concentrate from
Tukhmanuk. The Company may encounter problems, delays, expenses and difficulties
typically encountered in the development stage, many of which may be outside of
the Company's control.
COMPETITION
There is intense competition in the mining industry. The Company is competing
with larger mining companies, many of which have substantially greater financial
strengths, capital, marketing and personnel resources than those possessed by
the Company.
NEED FOR KEY PERSONNEL
The Company presently has officers and operation managers intimately familiar
with the operation of mining projects or the development of such projects and
with experience in former Soviet countries. While the Company does not believe
the loss of any director or officer of the Company will materially and adversely
affect its long-term business prospects, the loss of any of the Company's senior
personnel might potentially adversely affect the Company until a suitable
replacement could be found. The Company continues to employ independent
consultants and engineers, and employs through subsidiaries personnel with
mining, geology, and related backgrounds in Armenia, in Canada, and in Chile.
TRADING MARKET
The Company's Common Stock is currently traded on the OTC Bulletin Board. The
Company's Common Stock was declared eligible for trading on the OTC Bulletin
Board, effective March 30, 2004.
LACK OF INSURANCE PROTECTION
The Company may not be able to obtain adequate insurance protection for its
foreign investments.
FLUCTUATION IN MINERAL PRICES
The prices of gold and other minerals historically fluctuate and are affected by
numerous factors beyond the Company's control and no assurance can be given that
any reserves proved or estimated will actually be produced.
7
MINING RISKS
The Company's proposed mining operations will be subject to a variety of
potential engineering, seismic and other risks, some of which cannot be
predicted and which may not be covered by insurance.
There are risks inherent in the exploration for and development of mineral
deposits. The business of mining by its nature involves significant risks and
hazards, including environmental hazards, industrial incidents, labor disputes,
discharge of toxic chemicals, fire, drought, flooding and other acts of God.
The occurrence of any of these can delay or interrupt exploration and
production, increase exploration and production costs and result in liability to
the owner or operator of the mine. The Company may become subject to liability
for pollution or other hazards against which it has not insured or cannot
insure, including those in respect of past mining activities for which it was
not responsible.
MINING CONCESSIONS, PERMITS AND LICENSES
The Company's mining and processing activities are dependant upon the grant of
appropriate licenses, concessions, leases, permits and regulatory consents which
may be withdrawn or made subject to limitations. Although the Company believes
that the licenses, concessions, leases, permits and consents it holds will be
renewed, if required, when they expire, according to the current laws applicable
in the respective countries, subject to the licensing issues disclosed below in
"Foreign Risks," there can be no assurance that they will be renewed or as to
the terms of any such renewal. Mineral rights within the countries in which the
Company is currently operating are state-owned. Also see discussion under
Foreign Risks, below.
EXPLORATION RISKS
Minerals exploration is speculative in nature, involves many risks and
frequently is unsuccessful. There can be no assurance that any mineralization
discovered will result in an increase in the proven and probable reserves of the
Company. If reserves are developed, it can take a number of years from the
initial phases of drilling and identification of mineralization until production
is possible, during which time the economic feasibility of production may
change. Substantial expenditures are required to establish ore reserves through
drilling, to determine metallurgical processes to extract metals from ore and,
in the cases of new properties, to construct mining and processing facilities.
As a result of these uncertainties, no assurance can be given that the
exploration programs undertaken by the Group will result in any new commercial
mining operations being brought into operation.
FOREIGN RISKS
The value of the Company's assets may be adversely affected by political,
exchange rate, economic and other factors in Chile and Armenia. Armenia is a
former Soviet country in transition, and presents concomitant risks. In
particular, the Company has experienced delays in the bureaucratic process and
has experienced dealings with corrupt officials at the Ministry of Environment
and Natural Resources in Armenia. The Company practices a zero tolerance program
on corruption.
GGH, which is the license holder for the Hankavan and Marjan properties, has
continued to be the subject of corrupt and improper demands and threats from the
Minister of the Ministry of Environment and Natural Resources, Vartan Ayvazyan.
The Company has reported this situation to the appropriate authorities in
Armenia and in the United States. Although the Minister has taken the position
that the licenses at Hankavan and Marjan have been terminated, other Armenian
governmental officials have assured the Company to the contrary and Armenian
public records confirm the continuing validity of the licenses. The Company has
received independent legal opinions that all of its licenses are valid and
remain in full force and effect, continues to work at those properties, and has
engaged international and local counsel to pursue prosecution of the illegal and
corrupt practices directed against the subsidiary, including international
arbitration. On November 7, 2006, the Company initiated the thirty-day good
faith negotiating period (which is a prerequisite to filing for international
arbitration under the 2003 SHA, LLC Share Purchase Agreement) with the three
named shareholders and one previously undisclosed principal. The Company filed
for arbitration under the rules under the International Chamber of Commerce,
headquartered in Paris, France, ("ICC") on December 29, 2006. The forum for this
arbitration is New York City. Damages will be determined during the arbitration
proceedings. In addition and based on the US Armenia Bilateral Investment
Treaty, Global Gold Mining filed a request for arbitration against the Republic
of Armenia for the actions of the Minister of Environment and Natural Resources
with the International Centre for Settlement of Investment Disputes, which is a
component agency of the World Bank in Washington, D.C., ("ICSID") on January 29,
2007. Damages will be determined during the arbitration proceedings. The
Ministry of Environment has also sent a notice to terminate Global Gold Mining's
license at Getik. Global Gold Mining continues to work at this property and will
oppose any attempt to terminate this license.
8
The Company is aware that another company has used a similar name during 2006 in
the CIS and counsel has received assurances from the other company's legal
counsel that they will cease using the similar name and that company is now in
the process of changing its name.
NO DIVIDENDS
The Company currently anticipates that it will retain all of its future
earnings, if any, for use in its operations and does not anticipate paying any
cash dividends in the near term future. There can be no assurance that the
Company will pay cash dividends at any time, or that the failure to pay
dividends for periods of time will not adversely affect the market price for the
Company's Common Stock.
CONTROL OF THE COMPANY
Drury J. Gallagher, the Chairman Emeritus, Treasurer, Secretary, and Director,
and Van Z. Krikorian, Chairman, Chief Executive Officer, and Director, own
2,428,453, and 2,150,000 shares, respectively, or a total of 4,578,453 shares,
out of the 33,255,301 shares of the Company's Common Stock issued and
outstanding as of December 31, 2006. The two Company officers, director Nicholas
J. Aynilian who owns 235,000 and NJA Investments, which is controlled by
Nicholas J. Aynilian, owns 1,400,000 shares of Common Stock, entered into a
shareholders agreement, dated January 1, 2004, that provides for each of the
parties to the Agreement to vote for such individuals as directors.
Firebird Management, LLC owns a total of 8,973,167 shares, Farallon Capital owns
a total of 5,280,000, and Persistancy Capital owns a total of 2,000,000, out of
the 33,255,301 shares, of the Company's Common Stock issued and outstanding as
of December 31, 2006.
ITEM 2. DESCRIPTION OF PROPERTIES
The Company rents office space in a commercial building at 45 East Putnam
Avenue, Greenwich, CT where it signed a 5-year lease at a starting March 1, 2006
at a starting annual rental cost of $44,200. On October 1, 2006, the Company
expanded its office space by assuming the lease of the adjacent office space.
The assumed lease has two years remaining, through September 30, 2008, at a
current annual rental cost of $19,500. Messrs. Gallagher and Krikorian gave
personal guarantees of the Company's performance for the first two years of the
lease.
For a description of the mining properties in which the Company has an interest,
see "Description of Business."
ITEM 3. LEGAL PROCEEDINGS
GGH, which is the license holder for the Hankavan and Marjan properties, has
continued to be the subject of corrupt and improper demands and threats from the
Minister of the Ministry of Environment and Natural Resources, Vartan Ayvazyan.
The Company has reported this situation to the appropriate authorities in
Armenia and in the United States. Although the Minister has taken the position
that the licenses at Hankavan and Marjan have been terminated, other Armenian
governmental officials have assured the Company to the contrary and Armenian
public records confirm the continuing validity of the licenses. The Company has
received independent legal opinions that all of its licenses are valid and
remain in full force and effect, continues to work at those properties, and has
engaged international and local counsel to pursue prosecution of the illegal and
corrupt practices directed against the subsidiary, including international
arbitration. On November 7, 2006, the Company initiated the thirty-day good
faith negotiating period (which is a prerequisite to filing for international
arbitration under the 2003 SHA, LLC Share Purchase Agreement) with the three
named shareholders and one previously undisclosed principal. The Company filed
for arbitration under the rules under the International Chamber of Commerce,
headquartered in Paris, France, ("ICC") on December 29, 2006. The forum for this
arbitration is New York City. Damages will be determined during the arbitration
proceedings. In addition and based on the US Armenia Bilateral Investment
Treaty, Global Gold Mining filed a request for arbitration against the Republic
of Armenia for the actions of the Minister of Environment and Natural Resources
with the International Centre for Settlement of Investment Disputes, which is a
component agency of the World Bank in Washington, D.C., ("ICSID") on January 29,
2007. Damages will be determined during the arbitration proceedings. The
Ministry of Environment has also sent a notice to terminate Global Gold Mining's
license at Getik. Global Gold Mining continues to work at this property and will
oppose any attempt to terminate this license.
9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 15, 2006, the Company held its annual stockholders' meeting. As of close
of business, there were 28,670,301 shares of common stock of the Company
outstanding that were entitled to vote. The holders of common stock entitled to
23,034,267 votes were present in person or by proxy. The shareholders voted for
the election of Messrs. Krikorian, Gallagher, Hague, Aynelian, and Agnerian as
directors, approval of the selection of the current auditor, and the approval of
the Global Gold Corporation 2006 Stock Incentive Plan.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
(a) Shares of the Company's Common Stock were authorized for trading on the OTC
Bulletin Board on March 30, 2004, and have been traded there since under the
symbol "GBGD." The high and low per share closing prices and dividends that were
paid therefore for 2005 and 2006 were as follows:
2005 2006
---- ----
Quarter High* Low* Dividend High Low Dividend
------- ---- --- -------- ---- --- --------
1st 0.50 0.20 $ 0 1.45 1.01 $ 0
2nd 0.75 0.35 0 2.76 1.12 0
3rd 1.35 0.55 0 2.00 1.13 0
4th 1.50 0.60 0 1.30 0.80 0
* The shares of the Company's common stock were not publicly traded from 1995
until March 31, 2004.
As of March 29, 2007, the Company had 33,451,885 issued and outstanding shares
of its Common Stock. The Company's transfer agent is American Registrar and
Transfer Company, with offices at 342 E. 900 South, Salt Lake City, Utah 84111,
having a telephone number of (801) 363-9065.
(b) As of March 29, 2007, there were approximately 1,270 holders of record of
shares of the Company's Common Stock.
(c) The Company did not pay or declare any cash dividends on its shares of
Common Stock during its last two fiscal years ended December 31, 2005 and
December 31, 2006.
(d) The following table provides information about shares of our common stock
that may be issued upon the exercise of options and rights under existing equity
compensation plans as of December 31, 2006.
Number of securities
Remaining available for
Number of Securities to Weighed average exercise issuance under equity
be issued upon exercise price of outstanding compensation plans
of outstanding options, options, warrants and (excluding securities
warrants and rights rights reflected in column (a))
Plan Category (a) (#) (b)($) (c) (#)
------------- ----------------------- ------------------------- ----------------------------
Equity compensation plans
approved by security holders(1) 150,000 $0.11 0
Equity compensation plans
approved by security holders(2) 512,500 $1.51 2,487,500
Equity compensation plans not
approved by security holders 0 0 0
------- ----------
Total: 662,500 2,487,500
10
(1) The Company's 1995 Stock Option Plan - The Company adopted the 1995 Stock
Option Plan under which a maximum of 500,000 shares of Common Stock may be
issued (subject to adjustment for stock splits, dividends and the like). In July
2002, the Company granted options to buy 150,000 shares of common stock, at an
exercise price of $0.11 per share, to each of the then Chairman, Drury
Gallagher, and President of the Company, Robert Garrison. Of these options
issued, 75,000 vest on the first anniversary of the date of issuance, and the
remaining 75,000 vest on the second anniversary of the date of issuance. These
options expire five years from the date of issuance. As of December 31, 2006,
there were 200,000 stock awards available under the Plan for future issuance. On
June 30, 2004, the former President and CFO, Mr. Robert Garrison resigned his
office and thereby forfeited his options. Mr. Gallagher's options expire on June
30, 2007.
(2) The Company's 2006 Stock Incentive Plan - On June 15, 2006, the Company's
stockholders approved the Global Gold Corporation 2006 Stock Incentive Plan (the
"2006 Stock Incentive Plan") under which a maximum of 3,000,000 shares of Common
Stock may be issued (subject to adjustment for stock splits, dividends and the
like). The 2006 Stock Incentive Plan replaces the Company's Option Plan of 1995
which terminated in June 2005. The Company's 2006 Stock Incentive Plan has a ten
- year term and will expire on June 15, 2016. On June 15, 2006,the Company
granted options to buy 250,000 shares of common stock, at an exercise price of
$1.70 per share, to the then Chairman and CEO, Drury Gallagher. On June 15,
2006, the Company also granted options to buy 62,500 shares of common stock, at
an exercise price of $1.70 per share, to the Controller, Jan Dulman. On
September 18, 2006, the Company granted options to buy 200,000 shares of common
stock, at an exercise price of $1.25 per share, to the then Chief Operating
Officer, Michael T. Mason.
Sales of Securities: (a) On January 31, 2006, the Company issued 100,000 shares
of the Company common stock, at the fair market value of $1.15 per share, for
the purchase of the Getik mining license to Messrs. Simon Cleghorn (30,000
shares), Sergio DiGiovani (30,000 shares), Armen Ghazarian (10,000 shares), and
Frank Pastorino (30,000 shares). The Company issued such securities in reliance
upon Section 4(2) of the Securities Act of 1933, as amended (the "Act"); (b) On
January 11, 2006 the Company resolved to compensate each Director of the Company
with 50,000 shares of the Company's common stock for their services. An
aggregate of 250,000 shares at the fair market value of $1.50 per share were
issued to the directors on February 10, 2006. The Company issued such securities
in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the
"Act"); (c) On February 10, 2006, as compensation for the prior year, the
Company issues 24,000 shares to Dr. Urquhart at the fair market value of $1.50.
The Company issued such securities in reliance upon Section 4(2) of the Act; (d)
On April 4, 2006 Global Gold Corporation sold $13,000,000 in common shares in a
private placement, pursuant to exemptions from registration requirements of the
Securities Act under Regulation D and Regulation S based upon representations
and covenants provided by the respective purchasers. The transaction involved
the issuance of ten million four hundred thousand shares of common stock at
$1.25 per share. Each three shares purchased shall also entitle the purchaser to
a warrant for the purchase of an additional one share at the price per share of
$2.00 exercisable on or before the sooner of (a) April 1, 2008 or (b) sixty (60)
days following a determination by the Company that the weighted average trading
price of the common shares over a thirty (30) consecutive trading day period
commencing after August 1, 2006 is $3.00 USD or greater. Aton Securities, Inc.
of New York City acted as the Managing Private Placement Agent, and as part of
its compensation has also been granted warrants to purchase one million
(1,000,000) restricted common shares exercisable at the price of $1.25 per share
within eighteen months of April 4, 2006. The Company issued such securities in
reliance upon Section 4(2) of the Act; (e) On June 29, 2006 the Company issued
50,000 shares at the fair market value of $1.70 per share to Hrayr Agnerian for
his services as a newly elected Director of the Company. The Company issued such
securities in reliance upon Section 4(2) of the Act. (f) On June 29, 2006 the
Company issued 600,000 shares at the fair market value of $1.70 per share to Van
Krikorian according to the terms of his amended employment agreement approved on
June 15, 2006. The amended contract has the shares vesting at a rate of 200,000
shares per year over three years. The Company issued such securities in reliance
upon Section 4(2) of the Act; (g) On June 29, 2006 the Company issued 225,000
shares at the fair market value of $1.70 per share to Ashot Boghossian according
to the terms of his amended employment agreement approved on June 15, 2006. The
amended contract has the shares vesting at a rate of 18,750 shares every three
months over three years. The Company issued such securities in reliance upon
Section 4(2) of the Act; (h) On June 29, 2006 the Company issued 50,000 shares
at the fair market value of $1.70 per share to Drury Gallagher according to the
11
terms of his amended employment agreement approved on June 15, 2006. The amended
contract has the shares vesting at a rate of 12,500 shares every six months over
two years. The Company issued such securities in reliance upon Section 4(2) of
the Act; (i) On August 14, 2006 the Company issued five hundred thousand
(500,000) restricted shares of the Company's common stock to Karapet Khachatryan
(255,000 shares) and Arthur Gevorgyan (245,000 shares) at a fair market value of
$2.00 in connection with Global Gold Mining's exercise of the option on the
Tukhmanuk property. The Company issued such securities in reliance upon Section
4(2) of the Act; (j) On September 18, 2006 the Company entered an employment
agreement with Michael T. Mason, designating him as the Company's Chief
Operating Officer. The employment agreement is for an initial term of two years
and twelve days, terminating on September 30, 2008. Pursuant to employment
agreement, Mr. Mason was also granted 200,000 shares of restricted stock to vest
in four equal installments of 50,000 shares each on March 18, 2007, September
18, 2007, March 18, 2008, and September 18, 2008. The Company issued such
securities in reliance upon Section 4(2) of the Act; (k) On September 30, 2006,
the resignation of Mr. Simon Cleghorn as the Director of Mining and Exploration
and his assumption of a more limited role as "Senior Geologist" in Armenia of
the Company's subsidiary, Global Gold Mining, LLC was effective. In connection
with this transition and pursuant to the applicable restricted stock awards from
the Company, a total of 40,000 shares previously granted to Mr. Cleghorn did not
vest and have reverted back to the Company. The Company issued such securities
in reliance upon Section 4(2) of the Act; (l) On December 1, 2006 the Company
sold $2,250,000 in shares of Common Stock, pursuant to exemptions from
registration requirements of the Securities Act. The transaction involved the
exercise of warrants originally issued on November 4, 2004. The transaction
involved the issuance of 3,000,000 shares of common stock at $0.75 per share in
accordance with the warrants. The purchasers and corresponding shares issued
are: Firebird Global Master Fund, Ltd, 1,500,000 shares; Firebird Avrora Fund,
Ltd. 750,000 shares; and Firebird Republics Fund, Ltd. 750,000 shares. The
Company issued such securities in reliance upon Section 4(2) of the Act;
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
When used in this report, the words "expect(s)", "feel(s)", "believe(s)",
"will", "may", "anticipate(s)" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, and are urged to carefully review and consider the
various disclosures elsewhere in this Form 10-KSB.
RESULTS OF OPERATIONS
TWELVE-MONTHS ENDED DECEMBER 31, 2006 AND TWELVE-MONTHS ENDED DECEMBER 31, 2005
During the twelve-month period ended December 31, 2006, the Company's
administrative and other expenses were $4,303,480 which represented an increase
of $2,849,198 from $1,454,282 in the same period last year. The expense increase
was primarily attributable to foreign subsidiary activity and to higher
compensation expense of $1,460,515, legal fees of $271,883, rent expense of
$238,975 and higher travel expenses of $17,653 due to increased activity
resulting from project development in Armenia and Chile. During the twelve-month
period ended December 31, 2006, the Company's mine exploration costs were
$3,350,152 which represented an increase of $3,229,304 from $120,848 in the same
period last year. The expense increase was primarily attributable to the
increased mining activity at the Tukhmanuk property of $2,475,342, the Hankavan
property of $505,199, and the Getik property of $238,808. During the
twelve-month period ended December 31, 2006, the Company's amortization and
depreciation expenses were $611,642 which represented an increase of $434,403
from $177,239 in the same period last year. The expense increase was primarily
attributable to the increased depreciation expense of $201,598, and the
amortization of licenses of $232,805. During the twelve-month period ended
December 31, 2006, the Company's interest expenses were $220,058 which
represented an increase of $166,116 from $53,942 in the same period last year.
The expense increase was entirely attributable to the increased amortization
expense of the discount on note payable which was paid off in 2006. The Company
had revenue from the sale of concentrate of $5,985 in 2006, and no revenues in
2005. The difference is due to the Company not having any concentrate produced
to sell in 2005. The Company also had a gain from sale of joint venture of
$3,150,965 in 2006, and no such gains in 2005. The difference is due to the
Company not selling any joint ventures in 2005. The Company had losses on
foreign exchange of $181,394 in 2006 and no losses on foreign exchange in 2005.
The difference is due to higher contracted obligations in 2005 in US Dollars and
the fluctuation in currency exchange rates between the US Dollar and the
Armenian Dram. The Company had interest income of $213,406 in 2006 which
represented an increase of $198,628
12
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2006, the Company's total assets were $15,468,993, of which
$7,016,380 consisted of cash or cash equivalents.
The Company's plan of operation for the calendar year 2007 is:
(a) To develop the Tukhmanuk, Getik, Hankavan, and Marjan mining properties in
Armenia and to engage in further exploration in Armenia, Chile and Canada;
(b) To review and possibly acquire additional mineral bearing properties; and
(c) Pursue additional financing through private placements or joint ventures.
The Company retains the right until December 31, 2009 to elect to participate at
a level of up to twenty percent with Sterlite Gold Ltd., which was acquired by
Vedanta Resources, or any of its affiliates in any exploration project
undertaken in Armenia.
The Company retains the right to participate up to 20% in any new projects
undertaken by Iberian Resources or its affiliates in Armenia until August 15,
2015 in addition to its 2.5% NSR royalty on production from the Lichkvaz-Tei and
Terterasar mines as well as from any mining properties acquired in a 20
kilometer radius of the town of Aigedzor in southern Armenia.
In 2006, the Company anticipated producing at a rate of approximately 1,000 oz
of gold per month from the Tukhmanuk property. Based on exploration and mining
results, the Company is no longer anticipating such production but is focused on
the potential to develop a larger, industrial scale mining operation.
Because of issues emanating from corrupt and illegal behavior by Armenian
Minister of Environment, Vartan Ayvazyan, the Company hired special outside
counsel to protect its rights, including through international arbitration on
which the Company anticipates spending additional funds. See "Foreign Risks"
under Risk Factors, above.
The Company also anticipates spending additional funds in Armenia, Canada and
Chile for further exploration and development of its other properties as well as
acquisition of new properties. The Company is also reviewing new technologies in
exploration and processing. The Company anticipates that it will issue
additional equity or debt to finance its planned activities. The Company
anticipates that it might obtain additional financing from the holders of its
Warrants to purchase 2,000,000 million shares of Common Stock of the Company at
an exercise price of $1.42 per share, which expire on July 31, 2007. If these
Warrants were exercised in full, the Company would receive $2,840,000 in gross
proceeds. In addition, the Company anticipates that it might obtain additional
financing from the holders of its Warrants to purchase 4,466,666 million shares
of Common Stock of the Company at an exercise price of $2.00 per share, which
expire on April 1, 2008. If these Warrants were exercised in full, the Company
would receive $8,933,332 in gross proceeds.
The Company may engage in research and development related to exploration and
processing during 2007, does not expect to sell any plant or significant
equipment but it does anticipate purchasing processing plant and equipment
assets.
The Company has been able to continue based upon its receipt of funds from the
issuance of equity securities and shareholder loans, and by acquiring assets or
paying expenses by issuing stock. The Company's continued existence is dependent
upon its continued ability to raise funds through the issuance of securities.
Management's plans in this regard are to obtain other financing until profitable
operation and positive cash flow are achieved and maintained. Although
management believes that it will be able to secure suitable additional financing
for the Company's operations, there can be no assurances that such financing
will continue to be available on reasonable terms, or at all.
13
ITEM 7. FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company, notes thereto and
reports of Independent Certified Public Accountants thereon for the years ended
(a) December 31, 2006, by Sherb & Co, LLP, and (b) December 31, 2005, by Allen
G. Roth, P.A., are attached hereto as a part of, and at the end of, this report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable
ITEM 8A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), as of December 31, 2006.
Based on this evaluation, our principal executive officer and principal
financial officer have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms and that our disclosure and controls are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive officer and
principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that
occurred during our most recently completed fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting except raw material and work in process physical
inventories are being performed at the end of each quarter.
PART III
ITEM 9-DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Information concerning the Company's directors, executive officers and corporate
governance required by this Item is incorporated by reference from the Company's
Proxy Statement relating to the 2007 Annual Meeting of Stockholders scheduled to
be held on or around June 15, 2007.
ITEM 10-EXECUTIVE COMPENSATION
Information concerning director and executive compensation required by this Item
is incorporated by reference from the Company's Proxy Statement relating to the
2007 Annual Meeting of Stockholders scheduled to be held on or around June 15,
2007.
ITEM 11-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information concerning the security ownership of certain beneficial owners and
management and related stockholder matters required by this Item is incorporated
by reference from the Company's Proxy Statement relating to the 2007 Annual
Meeting of Stockholders scheduled to be held on or around June 15, 2007.
ITEM 12-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information concerting certain relationships and related transactions required
by this Item is incorporated by reference from the Company's Proxy Statement
relating to the 2007 Annual Meeting of Stockholders scheduled to be held on or
around June 15, 2007.
14
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Financial Statements.
The following documents are filed as part of this report: Financial Statements
of the Company, including reports of Independent Certified Public Accountants,
Balance Sheet, Statements of Operations, Statements of Stockholders' Equity
(Deficit) and Comprehensive Income (Loss), Statements of Cash Flow and Notes to
Financial Statements: as of and for the years ended December 31, 2006 and
December 31, 2005.
(b) Exhibits.
Global Gold Corporation Form 10-KSB December 31, 2006
Exhibit 3.1 Amended and Restated Certificate of Incorporation of the
Company, effective November 20, 2003.
Exhibit 3.2 Amended and Restated Bylaws of the Company, effective
November 20, 2003.
Exhibit 10.1 2006 Global Gold Corporation Stock Incentive Plan. (1)
Exhibit 10.2 Amended Employment Agreement, dated as of July 19, 2006, by
and between Global Gold Corporation and Van Krikorian. (2)
Exhibit 10.3 Amended Employment Agreement, dated as of July 19, 2006, by
and between Global Gold Corporation and Drury Gallagher. (3)
Exhibit 10.4 Amended Employment Agreement, dated as of July 19, 2006, by
and between Global Gold Mining, LLC and Ashot Boghosian. (4)
Exhibit 10.5 Amended Employment Agreement, dated as of July 19, 2006, by
and between Global Gold Corporation and Jan Dulman. (5)
Exhibit 10.6 Employment Agreement, dated as of September 18, 2006, by and
between Global Gold Corporation and Michael Mason. (6)
Exhibit 10.7 Employment Agreement, dated as of January 1, 2007, by and
between Global Gold Corporation and Hrayr Agnerian.
Exhibit 10.8 Resignation Agreement of Simon Cleghorn, dated as of
September 30, 2006.
Exhibit 10.9 Sale Agreement, dated as of January 13, 2006. (Santa
Candelaria) (7)
Exhibit 10.10 Purchase Agreement, dated as of January 23, 2006. (Athelea
Investments) (8)
Exhibit 10.11 Stock Subscription and Shareholder Agreement, dated July 29,
2005.
Exhibit 10.12 Private Placement Agreement, dated April 4, 2006.
Exhibit 10.13 Share Purchase Agreement, dated August 1, 2005. (Mego-Gold,
LLC) (9)
Exhibit 10.14 First Amendment of the August 1, 2005 Mego Gold, LLC Share
Purchase Agreement, dated as of July 19, 2006. (10) Joint
Venture Agreement, dated August 15, 2005. (Aigedzor Mining
Company) (11) Exhibit 10.15 Termination Agreement of the
October 28, 2005 Marjan Mining Joint Venture
Exhibit 10.16 Agreement, dated as of August 18, 2006. (12) Joint Venture
Agreement, dated October 28, 2005. (Marjan Mining Company)
(13) Exhibit 10.17 Restructuring, Royalty, and Joint Venture
Termination Agreement of the August Exhibit 10.18 15, 2005
Joint Venture to form Aigedzor Mining, dated as of December
19, 2006. (14)
Exhibit 10.19 Labrador Uranium Claims Agreement, dated January 18, 2007.(15)
Exhibit 21 List of Subsidiaries.
Exhibit 31.1 Certification of Chief Executive Officer Pursuant to Rule
13a-14 (a) of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Treasurer and Chief Financial Officer
Pursuant to Rule 13a-14(a) of the Sarbanes-Oxley Act of
2002.
Exhibit 32.1 Certification of the Chief Executive Officer Pursuant to
Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Exhibit 32.2 Certification of the Treasurer and Chief Financial Officer
Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
15
(1) Incorporated herein by reference to Exhibit 10.1 to the Company's current
report on Form 8-K/A filed with the SEC on June 22, 2006.
(2) Incorporated herein by reference to Exhibit 10.2 to the Company's quarterly
report on 10-QSB for the third quarter ended September 30, 2006, filed with
the SEC on November 13, 2006.
(3) Incorporated herein by reference to Exhibit 10.1 to the Company's quarterly
report on 10-QSB for the third quarter ended September 30, 2006, filed with
the SEC on November 13, 2006.
(4) Incorporated herein by reference to Exhibit 10.3 to the Company's quarterly
report on 10-QSB for the third quarter ended September 30, 2006, filed with
the SEC on November 13, 2006.
(5) Incorporated herein by reference to Exhibit 10.4 to the Company's quarterly
report on 10-QSB for the third quarter ended September 30, 2006, filed with
the SEC on November 13, 2006.
(6) Incorporated herein by reference to Exhibit 10.5 to the Company's quarterly
report on 10-QSB for the third quarter ended September 30, 2006, filed with
the SEC on November 13, 2006.
(7) Incorporated herein by reference to Exhibit 10.3 to the Company's current
report on Form 8-K filed with the SEC on January 24, 2006.
(8) Incorporated herein by reference to Exhibit 10.3 to the Company's current
report on Form 8-K on January 25, 2006.bit 10.3 to the Company's current
report on Form 8-K on January 25, 2006.
(9) Incorporated herein by reference to Exhibit 10 to the Company's current
report on Form 8-K filed with the SEC on August 3, 2005.
(10) Incorporated herein by reference to Exhibit 10.2 to the Company's current
report on Form 8-K filed with the SEC on August 18, 2006.
(11) Incorporated herein by reference to Exhibit 10.3 to the Company's current
report on Form 8-K filed with the SEC on August 15, 2006.
(12) Incorporated herein by reference to Exhibit 10.1 to the Company's current
report on Form 8-K filed with the SEC on August 18, 2006.
(13) Incorporated herein by reference to Exhibit 10.3 to the Company's current
report on Form 8-K filed with the SEC on November 1, 2005.
(14) Incorporated herein by reference to Exhibit 10.3 to the Company's current
report on Form 8-K filed with the SEC on December 21, 2006.
(15) Incorporated herein by reference to Exhibit 10.1 to the Company's current
report on Form 8-K filed with the SEC on January 24, 2007.
ITEM 14-PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information concerning the Company's principal accountant fees and services and
the pre-approval policies and procedures of the Audit Committee of the Board of
Directors required by this Item is incorporated by reference from the Company's
Proxy Statement relating to the 2007 Annual Meeting of Stockholders scheduled to
be held on or around June 15, 2007.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GLOBAL GOLD CORPORATION
(Registrant)
/s/ Van Z. Krikorian
--------------------------------------------------------
Van Z. Krikorian, Chairman, Chief Executive Officer
and Director
March 30, 2007
Date
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.
/s/ Lester S. Caesar 3/30/07 /s/ Ian C. Hague 3/30/07
------------------------------------- ----------------------------------------
Lester S. Caesar, CPA Ian C. Hague
Chief Financial Officer Director
/s/ Drury J. Gallagher 3/30/07 /s/ Nicholas J. Aynilian 3/30/07
------------------------------------- ----------------------------------------
Drury J. Gallagher Nicholas J. Aynilian
Chairman Emeritus, Director
Treasurer and Director
/s/ Jan Dulman 3/30/07 /s/ Harry Gilmore 3/30/07
------------------------------------- ----------------------------------------
Jan Dulman Harry Gilmore
Controller Director
17
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Page
Report of Independent Registered Public Accounting
Firm - for the year ended December 31, 2006.................................F-1
Report of Independent Registered Public Accounting
Firm - for the years ended December 31, 2005................................F-2
Consolidated Balance Sheet - as of December 31, 2006 .......................F-3
Consolidated Statements of Operations and Comprehensive Loss -
for the years ended December 31, 2006 and 2005 and the development
stage period from January 1, 1995 through December 31, 2006 ................F-4
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
- for the development stage period from January 1, 1995
through December 31, 2006............................................F-5 to F-7
Consolidated Statements of Cash Flows - for the years ended
December 31, 2006 and 2005 and the development stage
period from January 1, 1995 through December 31, 2006.......................F-8
Notes to Consolidated Financial Statements..........................F-9 to F-21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Global Gold Corporation and Subsidiaries (A Development Stage Company)
We have audited the accompanying consolidated balance sheet of Global Gold
Corporation and Subsidiaries (A Development Stage Company) as of December 31,
2006 and the related consolidated statement of operations and comprehensive
income, stockholders' equity and cash flows for the year ended December 31,
2006. The period beginning January 1, 1995 through December 31, 2005 were
audited by the predecessor accounting firms. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2006 and the results of their operations and their cash flows for
the year ended December 31, 2006 and the period beginning January 1, 1995
through December 31, 2005 which were audited by the predecessor accounting
firms, in conformity with accounting principles generally accepted in the United
States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has incurred
significant losses as more fully described in Note 2. These issues raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/Sherb & Co., LLP
Certified Public Accountants
New York, New York
March 26, 2007
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Global Gold Corporation and
Subsidiaries
I have audited the accompanying consolidated statements of operations, changes
in stockholders' equity (deficit), and cash flows of Global Gold Corporation and
Subsidiaries for the year ended December 31, 2005 and 2004. The period beginning
January 1, 1995 through December 31, 2003 was audited by the predecessor
accounting firm. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated results of operations and cash flows of
Global Gold Corporation and Subsidiaries for the year ended December 31, 2005
and 2004. The period from January 1, 1995 through December 31, 2003 was audited
by the predecessor accounting firm, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2(a) to the
financial statements, the Company has incurred significant losses since
inception. This raised substantial doubt about the Company's ability to continue
as a going concern. Management's plans with respect to these matters are also
described in Note 2(a) to the financial statements. The financial statements do
not include any adjustments that might result should the Company be unable to
continue as a going concern.
/s/ Allen G. Roth, P.A.
March 28, 2006
New York, New York
F-2
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
December 31, 2006
ASSETS
CURRENT ASSETS:
Cash $ 7,016,380
Inventories 569,358
Tax refunds receivable 105,240
Prepaid expenses 9,428
Other current assets 57,299
-----------------
TOTAL CURRENT ASSETS 7,757,705
LICENSES, net of accumulated amortization
of $546,535 2,663,401
INVESTMENT IN IBERIAN RESOURCES STOCK,
HELD IN ESCROW 2,867,075
DEPOSITS ON CONTRACTS AND EQUIPMENT 443,523
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $248,196 1,736,689
-----------------
$ 15,468,393
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 850,982
Common stock issues subject to put
(500,000 shares issued) 800,000
-----------------
TOTAL CURRENT LIABILITIES 1,650,982
STOCKHOLDERS' EQUITY
Common stock $0.001 par, 100,000,000
shares authorized; 33,255,301
shares issued and outstanding 32,755
Additional paid-in-capital 28,438,785
Unearned compensation (1,740,448)
Accumulated deficit prior to
development stage (2,907,648)
Deficit accumulated during the
development stage (10,810,253)
Accumulated other comprehensive income 804,220
-----------------
TOTAL STOCKHOLDERS' EQUITY 13,817,411
-----------------
$ 15,468,393
=================
See Notes to Consolidated Financial Statements
F-3
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Cumulative amount
Year ended from
December 31, January 1, 1995
------------------------------------------------ through
2006 2005 December 31, 2006
------------------- --------------------- --------------------------
REVENUES $ 5,985 $ - $ 5,985
------------------- --------------------- -----------------------
EXPENSES:
General and administrative 4,303,480 1,454,282 9,025,507
Mine exploration costs 3,350,152 120,848 3,583,725
Amortization and depreciation 611,642 177,239 788,881
Write-off on investment - - 135,723
Gain on sale of investment - - (319,641)
Loss/(Gain) from investment in joint ventures (3,150,965) 12,000 (3,138,965)
Interest expense 220,058 53,942 274,000
Loss/(Gain) on foreign exchange 181,394 - 70,971
Interest income (213,406) (14,778) (228,184)
------------------- --------------------- -----------------------
TOTAL EXPENSES 5,302,355 1,803,533 10,192,017
------------------- --------------------- -----------------------
Loss from Continuing Operations (5,296,370) (1,803,533) (10,186,032)
Discontinued Operations:
Loss from discontinued operations - 267,846 386,413
Loss on disposal of discontinued operations - 237,808 237,808
------------------- --------------------- -----------------------
Net Loss Applicable to Common Shareholders (5,296,370) (2,309,187) (10,810,253)
Foreign currency translation adjustment 489,256 (9,547) 450,745
Unrealized gain on investments 353,475 - 353,475
------------------- --------------------- -----------------------
Comprehensive Net Loss $ (4,453,639) $ (2,318,734) $ (10,006,033)
=================== ===================== =======================
NET LOSS PER SHARE-BASIC
AND DILUTED $ (0.21) $ (0.15)
=================== =====================
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC AND DILUTED 25,512,704 15,217,863
=================== =====================
See Notes to Consolidated Financial Statements
F-4
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
Accumulated
Deficit Other
Accumulated Compreh-
Additional during the Unearned ensive Total
Common Stock Paid-in Development Treasury Compen- Income Stockholders'
Share Amount Capital Stage Stock sation (Loss) Equity
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance from February 21,
1980 to December 31, 1994
(Note 1) 898,074 $ 89,807 $ 3,147,693 $(2,907,648) $ - $ - $ - $ 329,852
Adjustment for the
restatement of par value - (88,909) 88,909 - - - - -
Issuance of stock for
acquisition of Eyre
Resources, N.L 1,000,000 1,000 849,000 - - - - 850,000
Proceeds received from
private placement 200,000 200 421,373 - - - - 421,573
Net loss - - - (361,345) - - - (361,345)
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 1995 2,098,074 2,098 4,506,975 (3,268,993) - - - 1,240,080
Warrants exercised 40 - 100 - - - - 100
Net loss - - - (668,577) - - - (668,577)
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 1996 2,098,114 2,098 4,507,075 (3,937,570) - - - 571,603
Issuance of common stock 2,250,000 2,250 222,750 - - - - 225,000
Net loss - - - (690,747) - - - (690,747)
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 1997 4,348,114 4,348 4,729,825 (4,628,317) - - - 105,856
Net income - - - 34,944 - - - 34,944
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 1998 4,348,114 4,348 4,729,825 (4,593,373) - - - 140,800
Purchase of treasury stock - - - - (60,000) - - (60,000)
Unrealized loss on
investment - - - - - - (16,000) (16,000)
Net income - - - (93,826) - - - (93,826)
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 1999 4,348,114 4,348 4,729,825 (4,687,199) (60,000) - (16,000) (29,026)
Issuance of common stock in
connection with settlement 20,000 20 1,980 - - - - 2,000
Cancellation of treasury
stock (1,000,000) (1,000) (59,000) - 60,000 - - -
Settlement of accrued
salary 1,000,000 1,000 161,500 - - - - 162,500
Sale of warrants - - 650 - - - - 650
Unrealized loss on
investment - - - - - - (90,000) (90,000)
Net loss - - - (33,341) - - - (33,341)
---------- -------- ----------- ----------- -------- --------- --------- ---------
Balance at December 31, 2000 4,368,114 4,368 4,834,955 (4,720,540) - - (106,000) 12,783
See Notes to Consolidated Financial Statements
F-5
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
Accumulated
Deficit Other
Accumulated Compreh-
Additional during the Unearned ensive Total
Common Stock Paid-in Development Treasury Compen- Income Stockholders'
Share Amount Capital Stage Stock sation (Loss) Equity
---------- -------- ----------- ----------- -------- --------- --------- -------
Balance at December 31, 2000 4,368,114 4,368 4,834,955 (4,720,540) - - (106,000) $ 12,783
Net loss - - - (26,832) - - - (26,832)
Unrealized gain on investment - - - - - - (15,000) (15,000)
--------- ------- ---------- ----------- -------- ------- -------- ---------
Balance at December 31, 2001 4,368,114 4,368 4,834,955 (4,747,372) - - (121,000) (29,049)
-
Issuance of common stock for
compensation 200,000 200 9,800 - - - - 10,000
Net loss - - - (60,113) - - - (60,113)
Unrealized gain on investment - - - - - - 247,406 247,406
--------- ------- ---------- ----------- -------- ------- -------- ----------
Balance at December 31, 2002 4,568,114 4,568 4,844,755 (4,807,485) - - 126,406 168,244
Issuance of common stock for
Cash:
at $0.25 per share, January 350,000 350 87,150 - - - - 87,500
at $0.25 per share, July 1,000,000 1,000 231,500 - - - - 232,500
at $0.50 per share, October 100,000 100 46,400 - - - - 46,500
at 0.50 per share, October 400,000 400 185,600 - - - - 186,000
Issuance of common stock for
compensation:
at $0.25 per share, February 1,800,000 1,800 448,200 - - (450,000) - -
at $0.25 per share, June 900,000 900 224,100 - - (225,000) - -
at $0.25 per share,
December 90,000 90 22,410 - - (22,500) - -
Amortization of deferred
compensation - - - - - 165,802 - 165,802
Issuance of common stock for
services:
at $0.25 per share, January 500,000 500 124,500 - - (100,000) - 25,000
at $0.25 per share, April 250,000 250 62,250 - - - - 62,500
Shares cancelled in
September, which were
issued in January (500,000) (500) (124,500) - - 100,000 - (25,000)
Shares issued at $0.25 per
share for accounts payable
in April 100,000 100 24,900 - - - - 25,000
Fractional share adjustment 20 - - - - - - -
Unrealized gain on investment - - - - - - (95,278) (95,278)
Net Loss - - - (616,820) - - - (616,820)
--------- ------- ---------- ----------- ------- ------- -------- ----------
Balance at December 31, 2003 9,558,134 9,558 6,177,265 (5,424,305) - (531,698) 31,128 261,948
Issuance of common stock for
Compensation at $0.50
in January: 250,000 250 124,750 - - (125,000) - -
Forfeiture of common stock for
Compensation at $0.25
in June: (526,833) (527) (131,181) - - 131,708 - -
Issuance of common stock for
payables:
at $0.50 per share, October 200,000 200 99,800 - - - - 100,000
at $0.34 per share, November 40,000 40 13,460 - - - - 13,500
Issuance of common stock for
Cash at $0.50 in November,
less $15,000 closing fee 3,000,000 3,000 1,482,000 - - - - 1,485,000
Issuance of common stock for
Closing fees at $0.50
in October: 90,000 90 (90) - - - -
Amortization of unearned comp - - - - - 316,756 - 316,756
Unrealized loss on investment - - - - - - (31,128) (31,128)
Net Loss - - - (688,039) - - - (688,039)
--------- ------- ---------- ----------- ------- ------- -------- ----------
Balance at December 31, 2004 12,611,301 $12,611 $7,766,004 $(6,112,344) $ - $(208,234) $ - 1,458,037
See Notes to Consolidated Financial Statements
F-6
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
Accumulated
Deficit Other
Accumulated Compreh-
Additional during the Unearned ensive Total
Common Stock Paid-in Development Treasury Compen- Income Stockholders'
Share Amount Capital Stage Stock sation (Loss) Equity
---------- -------- ----------- ----------- -------- --------- --------- -------
Balance at December 31, 2004 12,611,301 12,611 7,766,004 (6,112,344) - (208,234) - 1,458,037
Issuance of common stock for
Compensation:
at $0.50 per share, January 850,000 850 424,150 - - (425,000) - -
at $1.00 per share, June 170,000 170 169,830 - - (170,000) - -
at $1.50 per share, December 45,000 45 67,455 - - ( 67,500) - -
Issuance of common stock for
Cash at $0.75 in June,
less $39,000 closing fee 4,000,000 4,000 2,957,000 - - - - 2,961,000
Warrants exercised 220,000 220 54,780 - - - - 55,000
Amortization of unearned comp - - - - - 292,994 - 292,994
Foreign currency translation
adjustments - - - - - - (38,511) (38,511)
Net Loss - - - (2,309,187) - - - (2,309,187)
--------- ------- ---------- ----------- ------- ------- -------- ----------
Balance at December 31, 2005 17,896,301 17,896 11,439,219 (8,421,531) - (577,740) (38,511) 2,419,333
Issuance of common stock for
Compensation:
at $1.50 per share, February 274,000 274 410,726 - - (375,000) - 36,000
at $1.70 per share, June 925,000 925 1,571,575 - - (1,572,500) - -
at $1.25 per share, September 200,000 200 249,800 - - (250,000) - -
Forfeiture of common stock for (40,000) (40) (44,960) 45,000 -
Compensation
Issuance of common stock for
Payable at $1.15 per share, 100,000 100 114,900 115,000
January
Slae of common stock 10,400,000 10,400 12,989,588 - - - - 12,999,988
Less: Selling expense for
sale of common stock - (764,957) (764,957)
Issuance of options for
Compensation 225,894 225,894
Warrants exercised 3,000,000 3,000 2,247,000 2,250,000
Accrual of stock bonuses
Issued in 2007 (27,950) (27,950)
Amortization of unearned comp 1,017,742 1,017,742
Net Loss (5,296,370) (5,296,370)
Other comprehensive income - - - - - 842,731 842,731
--------- ------- ---------- ----------- ------- ------- -------- ----------
Balance at December 31, 2006 32,755,301 $ 32,755 $ 28,438,785 $(13,717,901)$ - $(1,740,448)$ 804,220 $ 13,817,411
========= ======= ========== =========== ======= ======= ======== ==========
See Notes to Consolidated Financial Statements
F-7
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended January 1, 1995
December 31, Cumulative amount
------------------------------------------- through
2006 2005 December 31, 2006
---------------- -------------- ---------------------
OPERATING ACTIVITIES:
Net loss $ (5,296,370) $ (2,309,187) $ (10,810,253)
Adjustments to reconcile net loss
to net cash used in operating activities:
Amortization of unearned compensation 1,017,742 292,994 1,793,294
Stock option expense 225,894 - 225,894
Amortization expense 609,728 156,865 766,593
Depreciation expense 221,972 24,701 248,196
Accrual of stock bonuses issued in 2007 (27,950) - (27,950)
Write-off of investment - - 135,723
Loss on disposal of discontinued operations - 237,808 237,808
Equity in loss on joint venture - 12,000 12,000
Gain on extinguishment of debt - - (110,423)
Gain on sale of investments (non-cash portion) (2,150,965) - (2,470,606)
Other non-cash expenses 26,660 - 199,637
Changes in assets and liabilities:
Other current and non current assets (1,057,021) (207,243) (949,019)
Accounts payable and accrued expenses 737,324 107,217 1,191,600
---------------- -------------- -----------------
NET CASH FLOWS USED IN OPERATING ACTIVITIES (5,692,986) (1,684,845) (9,557,506)
---------------- -------------- -----------------
INVESTING ACTIVITIES:
Purchase of property, plan and equipment (1,611,833) - (1,611,833)
Proceeds from sale of Armenia mining interest - - 1,891,155
Proceeds from sale of investment in common stock
of Sterlite Gold - - 246,767
Investment in joint ventures - (260,000) (260,000)
Investment in mining licenses (1,200,000) (1,500,000) (4,092,936)
---------------- -------------- -----------------
NET CASH USED IN INVESTING ACTIVITIES (2,811,833) (1,760,000) (3,826,847)
---------------- -------------- -----------------
FINANCING ACTIVITIES:
Net proceeds from private placement offering 12,235,031 2,961,000 17,680,104
Repurchase of common stock - - (25,000)
Due to related parties - - (22,218)
Warrants exercised 2,250,000 55,000 2,305,750
---------------- -------------- -----------------
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 14,485,031 3,016,000 19,938,636
---------------- -------------- -----------------
EFFECT OF EXCHANGE RATE ON CASH 489,256 (38,511) 450,745
---------------- -------------- -----------------
NET INCREASE (DECREASE) IN CASH 6,469,468 (467,356) 7,005,028
CASH AND CASH EQUIVALENTS - beginning of period 546,912 1,014,268 11,352
---------------- -------------- -----------------
CASH AND CASH EQUIVALENTS - end of period $ 7,016,380 $ 546,912 $ 7,016,380
================ ============== =================
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ - $ - $ 2,683
================ ============== =================
Interest paid $ - $ - $ 15,422
================ ============== =================
Noncash Transactions:
Stock issued for deferred compensation $ 2,233,500 $ 662,500 $ 3,593,500
Stock forfeited for deferred compensation $ 45,000 $ - $ 742,500
Stock issued for mine acquisition $ 1,115,000 $ - $ 1,115,000
Stock issued for accounts payable $ - $ - $ 25,000
Stock issued in exchange for services $ - $ - $ -
================ ============== =================
Mine acquisition costs in accounts payables $ - $ - $ 50,697
================ ============== =================
See Notes to Consolidated Financial Statements
F-8
GLOBAL GOLD CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2006 AND 2005
1. ORGANIZATION AND BUSINESS
Global Gold is currently in the development stage. It is engaged in exploration
for, and development and mining of, gold, uranium, and other minerals in
Armenia, Canada and Chile. The Company's headquarters are located in Greenwich,
CT and its subsidiaries maintain offices and staff in Yerevan, Armenia and
Santiago, Chile. The Company was incorporated as Triad Energy Corporation in the
State of Delaware on February 21, 1980 and, as further described hereafter,
conducted other business prior to its re-entry into the development stage of
mineral exploration and mining on January 1, 1995. During 1995, the Company
changed its name from Triad Energy Corporation to Global Gold Corporation to
pursue certain gold and copper mining rights in the former Soviet Republics of
Armenia and Georgia. The Company's stock is publicly traded. The Company employs
81 people globally on a year round basis and an additional 120 people on a
seasonal basis.
The Company's current production, exploration, and development focus in Armenia
primarily revolves around the North Central Armenian Belt, where it is
integrating the Hankavan mine deposit, Tukhmanuk mine, and other adjacent
exploration sites. The Company has been conducting a drill program there to
confirm the historical data and develop mining plans. The Company also engages
in exploration outside the North Central Belt at the Getik and Marjan
properties, and holds royalty and participation rights in other locations in the
country through other affiliated and subsidiary companies.
In Canada, the Company is currently engaged in uranium exploration activities.
In Chile, the Company is currently engaged in copper and gold exploration
activities.
The subsidiaries through which the Company operates are as follows:
On January 24, 2003, the Company formed Global Oro LLC and Global Plata LLC, as
wholly owned subsidiaries, in the State of Delaware. These companies were formed
to be equal joint owners of a Chilean limited liability company, Minera Global
Chile Limitada ("Minera Global"), formed as of May 6, 2003, for the purpose of
conducting operations in Chile.
On August 18, 2003, the Company formed Global Gold Armenia LLC ("GGA"), as a
wholly owned subsidiary, which in turn formed Global Gold Mining LLC ("Global
Gold Mining"), as a wholly owned subsidiary, both in the State of Delaware.
Global Gold Mining was qualified to do business as a branch operation in Armenia
and owns assets and shares of operating companies in Armenia.
On December 21, 2003, Global Gold Mining acquired 100% of the Armenian limited
liability company SHA, LLC (renamed Global Gold Hankavan, LLC ("GGH") as of July
21, 2006), which held the license to the Hankavan and Marjan properties in
Armenia. On January 25, 2005, GGH submitted applications to the Armenian
government for exploration licenses for five additional mineral bearing
properties in North Central Armenia, all proximate to Hankavan.
On August 1, 2005, Global Gold Mining acquired the Armenian limited liability
company Mego-Gold, LLC, which is the licensee for the Tukhmanuk mining property
and seven surrounding exploration sites.
On January 31, 2006, Global Gold Mining closed a transaction to acquire 80% of
the Armenian company, Athelea Investments, CJSC (renamed "Getik Mining Company,
LLC") and its approximately 27 square kilometer Getik gold/uranium exploration
license area in the northeast Geghargunik province of Armenia for 100,000 shares
of the Company's Common Stock at a fair market value of $1.15 per share. The
sellers of the 80% of Athelea Investments, CJSC, were Messrs. Simon Cleghorn
(30,000 shares), Sergio DiGiovani (30,000 shares), Armen Ghazarian(10,000
shares), and Frank Pastorino (30,000 shares). Mr. Frank Pastorino is an officer
of the Company and Mr. Simon Cleghorn was an officer of the Company until
September 30, 2006.
The accompanying consolidated financial statements present the available
development stage activities information of the Company from January 1, 1995,
the period commencing the Company's operations as Global Gold Corporation and
Subsidiaries, through December 31, 2006.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis for Presentation - The consolidated financial statements at December
31, 2006, and for the year then ended was prepared assuming that the Company
would continue as a going concern. Since its inception, the Company, a
developing stage enterprise, has generated revenues of $5,985 (other than
interest income, the proceeds from the sale of an interest in an Armenian mining
venture, and the sale of common stock of marketable securities received as
consideration, therewith) while incurring losses in excess of $10,800,000.
Management pursued additional investors and lending institutions interested
F-9
in financing the Company's projects. However, there is no assurance that the
Company will obtain the financing that it requires or will achieve profitable
operations. The Company expected to incur additional losses for the near term
until such time as it would derive substantial revenues from the Armenian mining
interests acquired by it or other future projects. These matters raised
substantial doubt about the Company's ability to continue as a going concern.
The accompanying financial statements were prepared on a going concern basis,
which contemplated the realization of assets and satisfaction of liabilities in
the normal course of business. The accompanying financial statements at December
31, 2006 and for the year then ended did not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.
b. Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
c. Cash and Cash Equivalents - Cash and cash equivalents consist of all cash
balances and highly liquid investments with a remaining maturity of three months
or less when purchased and are carried at fair value.
d. Fair Value of Financial Instruments - The Company's financial instruments
includes cash, receivables, and accounts payable and accrued expenses. The
Company believes that the carrying amounts of these accounts are reasonable
estimates of their fair value because of the short-term nature of such
instruments.
e. Inventory - Inventory consists of the following:
For the twelve months ended
December 31,
-----------------------------
2006 2005
------------- ------------
Ore .................................... $ 526,201 $ -
Concentrate ............................ 16,006 -
Materials, supplies and other .......... 27,151 18,339
----------- -------------
Total Inventory......................... $ 569,358 $ 18,339
=========== =============
Ore inventory consists of unprocessed ore at the Tukhmanuk mining site in
Armenia. The unprocessed ore is stated at the lower of cost or market.
f. Investment in Iberian Resources Stock, Held in Escrow - The Company
classifies its existing restricted marketable equity securities as available for
sale in accordance with SFAS No. 115. These securities are carried at fair
market value. Unrealized gains or losses of marketable securities available for
sale are recognized as an element of comprehensive income on a quarterly basis
based on changes in the fair value of the security as quoted on national or
inter dealer stock exchanges.
g. Deposits on Contracts and Equipment - The Company has made several deposits
for purchases, the majority of which is for the potential acquisition of new
properties, and the remainder for the purchase of mining equipment.
h. Tax Refunds Receivable - The Company is subject to Value Added Tax ("VAT
tax") on all expenditures in Armenia at the rate of 20%. The Company is entitled
to a credit against this tax towards any sales on which it collects VAT tax. The
Company is carrying a tax refund receivable based on the value of its in-process
inventory which it intends on selling in the next twelve months, at which time
they will collect 20% VAT tax from the purchaser which the Company will be
entitled to keep and apply against its credit.
i. Net Loss Per Share - Basic net loss per share is based on the weighted
average number of common and common equivalent shares outstanding. Potential
common shares includable in the computation of fully diluted per share results
are not presented in the consolidated financial statements as their effect would
be anti-dilutive. As of December 31, 2006 and 2005, the Company's outstanding
options were 662,500 and 150,000, respectively, and warrants were 6,466,666 and
5,000,000, respectively.
j. Stock Based Compensation - On March 1, 2006, the Company adopted Statement of
Financial Accounting Standards (SFAS) 123R, Share-Based Payment, under the
modified prospective method. As the Company had previously accounted for
stock-based compensation plans under the fair value provisions of SFAS 123, the
adoption of SFAS 123 did not significantly impact the Company's financial
position or results of operations.
F-10
During the transition period of the Company's adoption of SFAS 123R, the
weighted-average fair value of options has been estimated on the date of grant
using the Black-Scholes options-pricing model with the following
weighted-average assumptions used:
Expected Life (Years) ................. 1-3
Interest Rate ......................... 5.0-5.7%
Annual Rate of Dividends .............. 0%
Volatility ............................ 100-145%
For the year ended December 31, 2006, net income and earnings per share include
the actual deduction for stock-based compensation expense. The total stock-based
compensation expense for the year ended December 31, 2006 was $1,243,647. The
expense for stock-based compensation is a non-cash expense item.
Under the requirements of FAS 123R, the Company is not required to restate prior
period earnings, however, the Company is required to supplement its financial
statements with additional pro forma disclosures. Had compensation cost for the
Company's stock option plan been determined based on the fair value at the date
of grant, the Company's net income and basic and diluted earnings per share
would have remained the same as the pro forma amounts for the year ended
December 31, 2005.
k. Comprehensive Income - The Company has adopted Statement of Financial
Accounting Standards No. 130 ("SFAS 130") "Reporting Comprehensive Income".
Comprehensive income is comprised of net income (loss) and all changes to
stockholders' equity (deficit), except those related to investments by
stockholders, changes in paid-in capital and distribution to owners.
The following table summarizes the computations reconciling net loss to
comprehensive loss for the years ended December 31, 2006 and 2005.
Year Ending December 31,
--------------------------------------------
2006 2005
--------------------- --------------------
Net loss ........................ $ (5,296,370) $ (2,309,187)
Unrealized gain/(loss) arising
during the year ............... $ 842,731 $ (9,547)
--------------------- --------------------
Comprehensive loss............... $ (4,453,639) $ (2,318,734)
===================== ====================
l. Income Taxes - The Company accounts for income taxes under Statement of
Financial Accounting Standards No.109, "Accounting for Income Taxes" (SFAS
No.109"). Pursuant to SFAS No.109, the Company accounts for income taxes under
the liability method. Under the liability method, a deferred tax asset or
liability is determined based upon the tax effect of the differences between the
financial statement and tax basis of assets and liabilities as measured by the
enacted rates that will be in effect when these differences reverse.
m. Acquisition, Exploration and Development Costs - Mineral property
acquisition, exploration and related costs are expensed as incurred unless
proven and probable reserves exist and the property may commercially be mined.
When it has been determined that a mineral property can be economically
developed, the costs incurred to develop such property, including costs to
further delineate the ore body and develop the property for production, may be
capitalized. In addition, the Company may capitalize previously expensed
acquisition and exploration costs if it is later determined that the property
can economically be developed. Interest costs, if any, allocable to the cost of
developing mining properties and to constructing new facilities are capitalized
until operations commence. Mine development costs incurred either to develop new
ore deposits, expand the capacity of operating mines, or to develop mine areas
substantially in advance of current production are also capitalized. All such
capitalized costs, and estimated future development costs, are then amortized
using the units-of-production method over the estimated life of the ore body.
Costs incurred to maintain current production or to maintain assets on a standby
basis are charged to operations. Costs of abandoned projects are charged to
operations upon abandonment. The Company evaluates, at least quarterly, the
carrying value of capitalized mining costs and related property, plant and
equipment costs, if any, to determine if these costs are in excess of their net
realizable value and if a permanent impairment needs to be recorded. The
periodic evaluation of carrying value of capitalized costs and any related
property, plant and equipment costs are based upon expected future cash flows
and/or estimated salvage value in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, "Accounting for Impairment or Disposal of
Long-Lived Assets."
n. Foreign Currency Translation - The assets and liabilities of non-U.S.
subsidiaries are translated into U.S. Dollars at year-end exchange rates. Income
and expense items are translated at average exchange rates during the year.
Cumulative translation adjustments are shown as a separate component of
stockholders' equity.
F-11
o. Principles of Consolidation - Our consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America, and include our accounts, our wholly owned
subsidiaries' accounts and a proportionate share of the accounts of the joint
ventures in which we participate. All significant inter-company balances and
transactions have been eliminated in consolidation.
p. Depreciation, Depletion and Amortization - Capitalized costs are depreciated
or depleted using the straight-line method or units-of-production method at
rates sufficient to depreciate such costs over the shorter of estimated
productive lives of such facilities or the useful life of the individual assets.
Productive lives range from 1 to 10 years, but do not exceed the useful life of
the individual asset. Determination of expected useful lives for amortization
calculations are made on a property-by-property or asset-by-asset basis at least
annually.
Undeveloped mineral interests are amortized on a straight-line basis over their
estimated useful lives taking into account residual values. At such time as an
undeveloped mineral interest is converted to proven and probable reserves, the
remaining unamortized basis is amortized on a unit-of-production basis as
described above.
q. Impairment of Long-Lived Assets - Management reviews and evaluates the net
carrying value of all facilities, including idle facilities, for impairment at
least annually, or upon the occurrence of other events or changes in
circumstances that indicate that the related carrying amounts may not be
recoverable. We estimate the net realizable value of each property based on the
estimated undiscounted future cash flows that will be generated from operations
at each property, the estimated salvage value of the surface plant and equipment
and the value associated with property interests. All assets at an operating
segment are evaluated together for purposes of estimating future cash flows.
r. Licenses - Licenses are capitalized at cost and are amortized on a
straight-line basis on a range from 1 to 10 years, but do not exceed the useful
life of the individual license.
s. Investment in Joint Venture - These investments were carried on the equity
method. On August 18, 2006 the Company terminated the Marjan Mining Company
Joint Venture Agreement entered into as of October 28, 2005. On December 19,
2006, Global Gold Mining entered a "Restructuring, Royalty, and Joint Venture
Termination Agreement" which terminates the Aigedzor Mining Company Joint
Venture at a gain of $3,150,965. As of December 31, 2006, the Company no longer
had any investment in Joint Ventures.
t. Reclamation and Remediation Costs (Asset Retirement Obligations) - In January
2005, we adopted SFAS No. 143 "Accounting for Asset Retirement Obligations,"
which requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred. SFAS No. 143
requires us to record a liability for the present value of our estimated
environmental remediation costs and the related asset created with it. The
liability will be accreted and the assets will be depreciated over the life of
the related assets. Adjustments for changes resulting from the passage of time
and changes to either the timing or amount of the original present value
estimate underlying the obligation will be made.
Costs of future expenditures for environmental remediation are not discounted to
their present value unless subject to a contractually obligated fixed payment
schedule. Such costs are based on management's current estimate of amounts to be
incurred when the remediation work is performed, within current laws and
regulations. Accordingly, no such costs were accrued at December 31, 2006.
It is possible that, due to uncertainties associated with defining the nature
and extent of environmental contamination and the application of laws and
regulations by regulatory authorities and changes in reclamation or remediation
technology, the ultimate cost of reclamation and remediation could change in the
future.
u. New Accounting Standards:
In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in an enterprise's financial statements in accordance with FAS No. 109,
"Accounting for Income Taxes." FIN 48 prescribes a two-step process to determine
the amount of tax benefit to be recognized. First, the tax position must be
evaluated to determine the likelihood that it will be sustained upon external
examination. If the tax position is deemed "more-likely-than-not" to be
sustained, the tax position is then assessed to determine the amount of benefit
to recognize in the financial statements. The amount of the benefit that may be
recognized is the largest amount that has a greater than 50% likelihood of being
realized upon ultimate settlement. We were required to adopt FIN 48 effective as
of January 1, 2007. We are currently evaluating the effect FIN 48 will have on
our financial statements. We do not expect the impact will be material.
F-12
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
(Statement 157), which addresses how companies should measure fair value when
they are required to use a fair value measure for recognition or disclosure
purposes under generally accepted accounting principles. Statement 157 defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosures about fair value
measurements. Statement 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and should be applied
prospectively, except in the case of a limited number of financial instruments
that
require retrospective application. We are currently evaluating the potential
impact of Statement 157 on our financial statements. We do not expect the impact
will be material.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities-including an amendment of FAS 115"
(Statement 159). Statement 159 allows entities to choose, at specified election
dates, to measure eligible financial assets and liabilities at fair value that
are not otherwise required to be measured at fair value. If a company elects the
fair value option for an eligible item, changes in that item's fair value in
subsequent reporting periods must be recognized in current earnings. Statement
159 is effective for fiscal years beginning after November 15, 2007. We are
currently evaluating the potential impact of Statement 159 on our financial
statements. We do not expect the impact will be material.
v. Common Stock Issued Subject to Put - The Company issued 500,000 shares of
restricted stock, as part of the Mego-Gold, LLC purchase, with the right to be
sold back to the Company for $1,000,000 on or before September 15, 2007 if the
stock is not traded at or above two dollars and fifty cents ($2.50) at any time
between July 1, 2007 and August 31, 2007. On September 12, 2006, GGM separately
loaned two hundred thousand dollars ($200,000) to Karapet Khachatryan, a seller
of Mego-Gold LLC which may be offset against the potential $1,000,000 liability.
w. Discontinued Operations - After certain exploration activities, including
limited drilling in 2005, the Company determined that it should discontinue its
exploration operations at Santa Candelaria, and wrote down its investment. On
January 13, 2006, the Company sold its interest in Santa Candelaria in exchange
for a royalty and the right to reacquire the property; all as further described
in "a" of Agreements and Commitments, below. Accordingly, we separated
discontinued operations and disposal of discontinued operations from continuing
operations on the statements of operations for the year ended December 31, 2005.
The Company's loss per share from discontinued operations was $0.02 and its loss
per share on disposal of discontinued operations was $.02 per share.
3. PROPERTY, PLANT AND EQUIPMENT
The following table illustrates the capitalized cost less accumulated
depreciation arriving at the net carrying value on our books at December 31,
2006.
Property, plant and equipment................. $ 1,984,885
Less accumulated depreciation................. (248,196)
---------
$ 1,736,689
=========
The Company had depreciation expense for the year ended December 31, 2006 and
2005 of $221,972 and $20,374, respectively.
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
As of December 31, 2006, the accounts payable and accrued expenses consisted of
the following:
Compensation payable.......................... $ 100,400
Laboratory testing work payable............... 368,212
Drilling work payable......................... 80,786
Accounts payable.............................. 235,619
Accrued expenses.............................. 65,965
---------
$ 850,982
==========
F-13
5. CONCENTRATION RISK
Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash. The Company places its cash with high
credit quality financial institutions in the United States and Armenia. As of
December 31, 2006, bank deposits in the United States exceeded federally insured
limits by approximately $6,613,000. At December 31, 2006, the Company had
approximately $218,000 in Armenian bank deposits, which may not be insured. The
Company has not experienced any losses in such accounts through December 31,
2006.
The majority of the Company's present activities are in Armenia. As with all
types of international business operations, currency fluctuations, exchange
controls, restrictions on foreign investment, changes to tax regimes, political
action and political instability could impair the value of the Company's
investments.
6. OFFICERS' COMPENSATION
The Company values shares issued to officers using the fair value of common
shares on grant date.
The Company, on February 1, 2003, entered into Amended and Restated Employment
Agreements with both the Chairman and President that modified the pre-existing
Employment Agreements. Each Agreement provided for base compensation of $100,000
per year and the grant of 900,000 shares as a stock award subject to a
substantial risk of forfeiture if either terminates their employment with the
Company (other than by death or disability) over the term of the agreement. The
Company, on June 1, 2003 entered into an Employment Agreement with the then Vice
President and general counsel which provided for base compensation of $100,000
per year and the grant of 900,000 shares as a stock award subject to substantial
risk of forfeiture if he terminates his employment with the Company (other than
by death or disability) over the term of the Agreement. These shares are to be
earned, and vest ratably, during such period, plus any bonus determined in
accordance with any bonus plan approved by the Board of Directors. Such amounts
have been reflected as unearned compensation and are being amortized as
compensation expense on a straight-line basis over the term of the agreements.
On June 30, 2004 the former president tendered his resignation and accordingly
forfeited 526,833 shares valued at $131,708.
On August 1, 2005, the Company entered two-year employment agreements with
Messrs. Lester S. Caesar, CPA as the Chief Financial Officer and Jan Dulman as
the Controller. Mr. Caesar will receive $48,000 per year and Mr. Dulman will
receive $12,000 per year. Both contracts are identical in that they include
restricted stock awards of the Company's shares of 40,000 vesting at a rate of
10,000 shares per six months. On February 6, 2006, the employment agreements
were amended, retroactively to January 1, 2006, restating compensation where as
Mr. Caesar will receive $42,000 per year and Mr. Dulman will receive $24,000 per
year.
The Company has declared cash bonuses to officers of $56,000, which amount is
included in officers' compensation and in accounts payable and accrued expenses
as of December 31, 2005.
On February 10, 2006, the Company issued 24,000 shares to Dr. Urquhart at the
fair market value of $1.50 per share. The shares were issued as compensation for
the prior year. The expense was accrued for year-end December 31, 2005.
The Company issued 50,000 shares to each of the five Directors as of February
10, 2006 at the fair market value of $1.50 per share. Such amounts have been
reflected as unearned compensation and are being amortized into compensation
expense on a straight-line basis over the term of the agreements.
Effective May 1, 2006, Global Gold Mining amended the contract of Simon
Cleghorn, the Director of Exploration and Mining. The amended terms increase his
time devoted to 100%, increase his salary to $125,000, and extend the contract
an additional year through July 31, 2009. On September 30, 2006, the resignation
of Mr. Simon Cleghorn as the Director of Mining and Exploration and his
assumption of a more limited role as "Senior Geologist" in Armenia of the
Company's subsidiary, Global Gold Mining, LLC was effective. In connection with
this transition and pursuant to the applicable restricted stock awards from the
Company, a total of 40,000 shares previously granted to Mr. Cleghorn did not
vest and have reverted back to the Company.
On June 15, 2006, the Board of Directors (based on the decision of the
Compensation Committee and without the participation of Messrs. Gallagher and
Krikorian) approved an amendment to the employment agreement of Drury Gallagher
with respect to his employment as Chief Executive Officer of the Company. The
revised employment agreement provides that Mr. Gallagher will resign as Chairman
and Chief Executive Officer and assume the titles of Chairman Emeritus and
Treasurer effective December 31, 2006 and effective June 30, 2006, will receive
an annual base salary of $125,000, representing a 25% increase over his previous
salary and is entitled to receive any bonus as determined in accordance with any
plan approved by the Board of Directors. The amended agreement is for two and a
half years terminating on December 31, 2008.
F-14
Pursuant to the revised agreement, Mr. Gallagher was also granted (i) 50,000
shares of restricted stock to vest in four equal installments of 12,500 shares
each on December 30, 2006, June 30, 2007, December 30, 2007 and June 30, 2008
and (ii) 250,000 stock options to purchase Common Stock at $1.70 per share (the
arithmetic mean of the high and low prices of the Company's stock on June 15,
2006), to vest in eight equal installments of 28,125 shares each on September
30, 2006, December 30, 2006, March 30, 2007, June 30 2007, September 30, 2007,
December 30, 2007, March 30, 2008 and June 30, 2008. The restricted stock and
options are subject to a substantial risk of forfeiture upon termination of his
employment with the Company during the term of the Agreement and the option
grant was made pursuant to the Global Gold Corporation 2006 Stock Incentive
Plan. The restricted stock and options previously awarded to Mr. Gallagher will
continue to vest pursuant to his original Employment Agreement.
On June 15, 2006, the Board of Directors (based on the decision of the
Compensation Committee and without the participation of Messrs. Gallagher and
Krikorian) also approved an amendment to the employment agreement of Mr. Van
Krikorian with respect to his employment as President and General Counsel of the
Company. The revised Employment Agreement provides that Mr. Krikorian will
receive an annual base salary of $225,000, representing a 25% increase over his
previous salary effective July 1, 2006 and is entitled to receive any bonus as
determined in accordance with any plan approved by the Board of Directors. The
amended Employment Agreement terminates on June 30, 2009.
Pursuant to the revised agreement, Mr. Krikorian was also granted 600,000 shares
of restricted stock to vest in three equal installments of 200,000 shares each
on June 30, 2007, June 30, 2008 and June 30, 2009. The restricted stock is
subject to a substantial risk of forfeiture upon termination of his employment
with the Company during the term of the agreement. The restricted stock
previously awarded to Mr. Krikorian will continue to vest pursuant to his
original Employment Agreement, as amended previously.
The Board of Directors also approved an amendment to Mr. Ashot Boghossian's
Employment Agreement with respect to his employment as Regional Director of
Global Gold Mining, LLC. The revised Employment Agreement provides that Mr.
Boghossian will receive the same annual base salary as in his previous agreement
of $72,000 and is entitled to receive any bonus as determined in accordance with
any plan approved by the Board of Directors. The amended Employment Agreement
extends for another three years terminating on June 30, 2009.
Pursuant to the revised agreement, Mr. Boghossian was also granted 225,000
shares of restricted stock to vest in twelve equal installments of 18,750 shares
each on September 30, 2006, December 30, 2006, March 30, 2007, June 30, 2007,
September 30, 2007, December 30, 2007, March 30, 2008, June 30, 2008, September
30, 2008, December 30, 2008, March 30, 2009 and June 30, 2009. The restricted
stock is subject to a substantial risk of forfeiture upon termination of his
employment with the Company during the term of the Employment Agreement. The
restricted stock previously awarded to Mr. Boghossian will continue to vest
pursuant to his original employment agreement.
On June 15, 2006, the Board of Directors also approved an amendment of Mr. Jan
Dulman's Employment Agreement with respect to his employment as Controller of
the Company. The revised Employment Agreement provides that Mr. Dulman will
receive an annual base salary of $60,000, representing a $36,000 increase over
his previous salary, effective May 1, 2006. Mr. Dulman's Employment Agreement
terminates on July 31, 2007.
Pursuant to the revised agreement, Mr. Dulman was also granted 62,500 stock
options to purchase Common Stock at $1.70 per share (the arithmetic mean of the
high and low prices of the Company's stock on June 15, 2006), to vest in three
installments as follows: 20,833 shares on June 15th, 2006, 20,833 shares on
November 30, 2006, and 20,834 shares on July 31, 2007. The options are subject
to a substantial risk of forfeiture upon termination of his employment with the
Company during the term of the Employment Agreement and the option grant was
made pursuant to the Global Gold Corporation 2006 Stock Incentive Plan. The
restricted stock previously awarded to Mr. Dulman will continue to vest pursuant
to his original employment agreement.
On June 15, 2006, the Company at the Annual Meeting of Stockholders of the
Company, the following directors were re-elected: Mr. Drury J. Gallagher, Van Z.
Krikorian, Nicholas J. Aynilian, Ian C. Hague and Michael T. Mason and Mr. Hrayr
Agnerian, of Scott Wilson Roscoe Postle Associates, Inc. was elected to his
first term as a Director, effective June 15, 2006.
On June 15, 2006, the Company issued 50,000 shares to Hrayr Agnerian in
conjuction with being elected as a Director at the fair market value of $1.70
per share. Such amount has been reflected as unearned compensation and is being
amortized into compensation expense on a straight-line basis over the term of
the agreement.
On September 18, 2006, the Company entered an employment agreement with Michael
T. Mason, designating him as the Company's Chief Operating Officer. The
employment agreement provides that Mr. Mason will receive an annual base salary
of $150,000, and is entitled to receive any bonus as determined in accordance
with any plan approved by the Board of Directors. Mr. Mason resigned from the
Board of Directors effective September 18, 2006. The employment agreement is for
an initial term of two years and twelve days, terminating on September 30, 2008.
F-15
Pursuant to the employment agreement, Mr. Mason was also granted (i) 200,000
shares of restricted common stock to vest in four equal installments of 50,000
shares on March 18, 2007, September 18, 2007, March 18, 2008, and September 18,
2008 and (ii) options to purchase 200,000 shares of Common Stock at $1.25 per
share (the arithmetic mean of the high and low prices of the Company's stock on
September 18, 2006), to vest in two equal installments of 100,000 shares on
September 18, 2006, September 18, 2007. The restricted stock and options are
subject to a substantial risk of forfeiture upon termination of his employment
with the Company during the term of the Agreement and the option grant was made
pursuant to the Global Gold Corporation 2006 Stock Incentive Plan.
The Company has declared cash bonuses to officers of $104,000 that is included
in officers' compensation and in accounts payable and accrued expenses.
The Company has declared a stock bonus to Dr. Urquhart of 10,000 shares of
common stock at $0.86 per share for a total value of $8,600. The Company also
declared stock bonuses to 64 employees in Armenia for a total of 21,250 shares
of common stock at $0.86 per share for a total value of $18,275. The $26,875 is
included in officers' compensation and in accounts payable and accrued expenses
as of December 31, 2006.
The Company has declared stock bonuses to 8 key employees in Armenia for a total
of 32,500 shares of common stock at $0.86 per share for a total value of $27,950
which vest over 2 years. As of December 31, 2006, the $27,950 was included in
unearned compensation and in accounts payable and accrued expenses.
Compensation expense for the years ended December 31, 2006 and 2005 was
$2,253,787 and $793,272. The amount of total deferred compensation amortized for
the years ended December 31, 2006 and 2005 was $1,017,742 and $292,944.
The following table illustrates the Company's compensation commitments for the
next 5 years as of December 31, 2006.
Year Amount
2007 $2,475,545
2008 1,444,728
2009 318,500
2010 -
2011 -
7. INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("SFAS No. 109"). SFAS No. 109
requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
from tax loss and tax credit carry forwards. SFAS No. 109 additionally requires
the establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets. At December 31, 2006, the Company had net
deferred tax assets of $3,353,000. The Company has provided a valuation
allowance, which increased during 2006 by $1,422,000, against the full amount of
its deferred tax asset, since the likelihood of realization cannot be
determined.
The following table illustrates the source and status of the Company's major
deferred tax assets as of December 31, 2006.
Deferred tax assets:
Net operating loss carryforward .............. $ 3,600,000
Stock option expense ......................... 90,000
---------
3,690,000
---------
Deferred tax liabilities:
Foreign exchange gain ........................ 196,000
Unrealized gain on investment................. 141,000
---------
337,000
---------
Net deferred tax asset ....................... 3,353,000
Valuation allowance ... ...................... (3,353,000)
---------
$ -
=========
F-16
The provision for income taxes for year ended December 31, 2006 and 2005 differs
from the amount computed by applying the statutory federal income tax rate (35%)
to income before income taxes as follows:
2006 2005
--------- --------
Income tax benefit computed at statutory rate $1,559,000 $ 890,000
State tax benefit (net of federal) 223,000
Permanent differences (principally amortization
of differed compensation) (360,000)
Increase in valuation allowance ............. (1,422,000) (890,000)
--------- --------
Provision for income taxes .................. $ - $ -
========= ========
The Company had net operating loss carry forwards for tax purposes of
approximately $9,000,000 at December 31, 2006 expiring at various dates from
2012 to 2025. A significant portion of these carry forwards are subject to
limitations on annual utilization due to "equity structure shifts" or "owner
shifts" involving "5 percent stockholders" (as defined in the Internal Revenue
Code of 1986, as amended), which resulted in more than a 50 percent change in
ownership.
8. COMMON STOCK
On January 11, 2005 the Company appointed one (1) additional Director to the
Board of Directors; Ian Hague. Each Director of the Company receives 50,000
shares of the Company's common stock per year for their services as a Director.
An aggregate of 250,000 shares were issued to the directors in February 2005.
In July 2005, the Company sold 4,000,000 units at $0.75 per share in a private
placement. The units included 4,000,000 common shares and 2,000,000 warrants
exercisable at $1.42 per share per share and expire after two years. A placement
agency fee of $39,000 was made to consultants and was included in additional
paid-in capital.
Each Director of the Company received 50,000 shares of the Company's common
stock per year for their services as a Director in 2006. An aggregate of 250,000
shares were issued to the directors in February 2006. On June 15, 2006, the
Company appointed one (1) additional Director to the Board of Directors; Hryar
Agnerian. Mr. Agnerian was also issued 50,000 shares of the Company's common
stock for his services as a Director.
In April 2006, the Company sold 10,400,000 units at $1.25 per share in a private
placement. The units included 10,400,000 common shares and 4,466,666 warrants
exercisable at $2.00 per share and expire after two years. A finder's fee of
$750,000 was made to Aton Securities, Inc. and was included in additional
paid-in capital.
9. WARRANTS AND OPTIONS
The Company adopted the 1995 Stock Option Plan under which a maximum of 500,000
shares of Common Stock may be issued (subject to adjustment for stock splits,
dividends and the like). In July 2002, the Company granted options to buy
150,000 shares of common stock, at an exercise price of $0.11 per share, to each
of the then Chairman, Drury Gallagher, and President of the Company, Robert
Garrison. Of these options issued, 75,000 vest on the first anniversary of the
date of issuance, and the remaining 75,000 vest on the second anniversary of the
date of issuance. These options expire five years from the date of issuance. As
of December 31, 2006, there were 200,000 stock awards available under the Plan
for future issuance. On June 30, 2004, the former President and CFO, Mr. Robert
Garrison resigned his office and thereby forfeited his options. Mr. Gallagher's
options expire on June 30, 2007.
On June 15, 2006, the Company's stockholders approved the Global Gold
Corporation 2006 Stock Incentive Plan (the "2006 Stock Incentive Plan") under
which a maximum of 3,000,000 shares of Common Stock may be issued (subject to
adjustment for stock splits, dividends and the like). The 2006 Stock Incentive
Plan replaces the Company's Option Plan of 1995 which terminated in June 2005.
The Company's 2006 Stock Incentive Plan has a ten - year term and will expire on
June 15, 2016. On June 15, 2006, the Company granted options to buy 250,000
shares of common stock, at an exercise price of $1.70 per share, to the then
Chairman and CEO, Drury Gallagher. On June 15, 2006, the Company also granted
options to buy 62,500 shares of common stock, at an exercise price of $1.70 per
share, to the Controller, Jan Dulman. On September 18, 2006, the Company granted
options to buy 200,000 shares of common stock, at an exercise price of $1.25 per
share, to the then Chief Operating Officer, Michael T. Mason.
On October 31, 2005, the Company issued 220,000 shares to satisfy the exercise
of warrants held. The warrants were exercised at $0.25 per share for a total of
$55,000.
F-17
On December 1, 2006, Global Gold Corporation sold $2,250,000 in common shares,
pursuant to exemptions from registration requirements of the Securities Act. The
transaction involved the exercise of warrants originally issued on November 4,
2004. The transaction involved the issuance of 3,000,000 shares of common stock
at $0.75 per share in accordance with the warrants. The purchasers and
corresponding shares issued are: Firebird Global Master Fund, Ltd, 1,500,000
shares; Firebird Avrora Fund, Ltd. 750,000 shares; and Firebird Republics Fund,
Ltd. 750,000 shares.
The following tables illustrates the Company's stock warrant and option
issuances and balances outstanding as of, and during the years ended December
31, 2006 and December 31, 2005, respectively.
WARRANTS OPTIONS
---------------------------------- ---------------------------------
Shares Weighted Shares Weighted
Underlying Average Underlying Average
Warrants Exercise Price Options Exercise Price
---------------- -------------- --------------- --------------
Outstanding at December 31, 2004 3,330,000 $ 0.70 300,000 $ 0.11
Granted .............................. - - - -
Canceled ............................. (110,000) 0.10 (150,000) 0.11
Exercised ............................ (220,000) 0.25 - -
Sold in units......................... 2,000,000 1.42 - -
---------------- -------------- --------------- --------------
Outstanding at December 31, 2005 5,000,000 $ 0.99 150,000 $ 0.11
Granted .............................. - - 512,500 1.19
Canceled ............................. - - - -
Exercised ............................ (3,000,000) 0.75 - -
Sold in units......................... 4,466,666 2.00 - -
---------------- -------------- --------------- --------------
Outstanding at December 31, 2006 6,466,666 $ 1.82 662,500 $ 0.95
================ ============== =============== ==============
The following is additional information with respect to the Company's options
and warrants as of December 31, 2006.
WARRANTS
WARRANTS OUTSTANDING EXERCISABLE
---------------------------------------------- --------------------------------
Number of Weighted Number of
Outstanding Average Weighted Exercisable Weighted
Average Shares Remaining Average Shares Average
Exercise Underlying Contractual Exercise Underlying Exercise
Price Warrants Life Price Warrants Price
----------------------- ---------------------- ---------------- ------------
$ 1.63 6,466,666 0.92 years $ 1.82 6,466,666 $ 1.82
OPTIONS
OPTIONS OUTSTANDING EXERCISABLE
---------------------------------------------- --------------------------------
Number of Weighted Number of
Outstanding Average Weighted Exercisable Weighted
Average Shares Remaining Average Shares Average
Exercise Underlying Contractual Exercise Underlying Exercise
Price Options Life Price Options Price
---------------------- ----------------------- ---------------- ------------
$ 0.89 662,500 7.50 years $ 0.87 347,916 $ 0.69
F-18
10. AGREEMENTS AND COMMITMENTS
a. As of January 13, 2006, Minera Global Chile Limitada ("Minera Global",a
wholly owned subsidiary of Global Oro, LLC and Global Plata, LLC, which in turn
are wholly owned subsidiaries of the Company) entered into a purchase, option,
and royalty agreement with Mr. Adrian Soto Torino, a citizen of Chile ("AST") to
transfer the mining concessions Candelaria 1, 2, and 3 in Comuna de Diego de
Almagro, Region III of Chile to AST to mine the gold property and pay Minera
Global a net smelter royalty of 10% until such time as Minera Global has been
paid $75,000 and thereafter a net smelter royalty of 2% for the life of the
mine. All liabilities and fees associated with the property are the
responsibility of AST, and Minera Global retains the option to reacquire the
mining concession upon 60 days notice and payment of 1,000,000 Chilean pesos
(approximately $1,883 USD).
b. On January 30, 2006, the Company entered into a five-year lease with East
Post Realty, LLC for their administrative facilities located at 45 East Putnam
Avenue, Suite 118, Greenwich, CT 06830. The lease commences on March 1, 2006 and
runs though February 28, 2011. The Company is obligated for annual payments of
$44,200 in year one, $45,240 in year two, $46,800 in year three, $48,360 in year
four, $49,920 in year five. On October 1, 2006, the Company expanded its office
space by assuming the lease of the adjacent office space. The assumed lease has
two years remaining, through September 30, 2008, at a current annual rental cost
of $19,500.
c. On January 31, 2006, Global Gold Mining closed the transaction agreed to in
the context of the share purchase agreement, dated as of January 23, 2006, with
Athelea Investments, CJSC ("AI") and Messrs. Simon Cleghorn, Sergio DiGiovani,
Armen Ghazarian, and Frank Pastorino (the "Sellers") to transfer 80% of the
shares of AI to Global Gold Mining in exchange for 100,000 shares of the
Company's Common Stock. All assets (including the "Athelea" name) not related to
the approximately 27 square kilometer Getik gold/uranium exploration license
area were transferred back to the Sellers. AI was renamed the "Getik Mining
Company, LLC." A three-year exploration program at the Getik property has been
approved and is being implemented. Mr. Frank Pastorino is an officer of the
Company and Mr. Simon Cleghorn was an officer of the Company terminating in
October of 2006.
d. On April 4, 2006, the Company sold $13,000,000 in common shares in a private
placement, pursuant to exemptions from registration requirements of the
Securities Act under Regulation D and Regulation S based upon representations
and covenants provided by the respective purchasers. The transaction involved
the issuance of ten million four hundred thousand shares of common stock at
$1.25 per share. Each three shares purchased shall also entitle the purchaser to
a warrant for the purchase of an additional one share at the price per share of
$2.00 exercisable on or before the sooner of (a) April 1, 2008 or (b) sixty (60)
days following a determination by the Company that the weighted average trading
price of the common shares over a thirty (30) consecutive trading day period
commencing after August 1, 2006 is $3.00 USD or greater. Aton Securities, Inc.
of New York City acted as the Managing Private Placement Agent, and as part of
its compensation has also been granted warrants to purchase one million
(1,000,000) restricted common shares exercisable at the price of $1.25 per share
within eighteen months of April 4, 2006.
e. On April 19, 2006, Mego-Gold LLC entered into a contract with Zeppelin
International AG to purchase two used Caterpillar Hydraulic Excavators for
$293,830.
f. On April 29, 2006, Mego-Gold LLC entered into a contract with Zeppelin
International AG to purchase one new D9 bulldozer for $680,000.
g. On August 2, 2006 Global Gold Mining exercised its option to acquire the
remaining forty-nine percent (49%) of the Armenian limited liability company
Mego-Gold, LLC, which is the licensee for the Tukhmanuk mining property and
surrounding exploration sites as well as theowner of the related processing
plant and other assets in exchange for one million dollars ($1,000,000) and five
hundred thousand (500,000) restricted shares of the Company's common stock with
a contingency allowing the sellers to sell back the 500,000 shares on or before
September 15, 2007 for a payment of $1 million if the Company's stock is not
traded at or above two dollars and fifty cents ($2.50) at any time between July
1, 2007 and August 31, 2007. On September 12, 2006, GGM loaned two hundred
thousand dollars ($200,000) to Karapet Khachatryan ("Maker"), one of the sellers
of Mego-Gold LLC, a citizen of the Republic of Armenia, as evidenced by a
convertible promissory note payable to GGM, in lawful money of the United States
of America, with interest in arrears on the unpaid principal balance at an
annual rate equal to ten percent (10%). At any time following September 18,
F-19
2006, the Company, at its sole option, shall have the right to convert all of
Maker's debt from the date of the Note to the date of conversion into shares of
common stock of the Company at the conversion price of $1.50 per share with all
of such shares as security for all obligations. Maker pledged two hundred fifty
five thousand (255,000) shares of the Company's common stock as security for his
obligations thereunder.
h. On August 18, 2006, Global Gold Mining and Caucasus Resources Pty Ltd ("CR")
(which is subsidiary of and Iberian Resources Limited ("Iberian")) have
terminated the Marjan Mining Company Joint Venture Agreement entered into as of
October 28, 2005. As a result of the termination agreement, the two companies
will have no further obligations toward one another with respect to the Marjan
mining property. The Marjan mining property is located in Southwestern Armenia,
along the Nakichevan border. GGM will continue to develop the Marjan property,
and Iberian is focusing its activities in Armenia into bringing the Litchkvadz
project (which is a separate 80-20 joint venture with Global Gold Mining) into
production.
i. On December 1, 2006, Global Gold Corporation sold $2,250,000 in common
shares, pursuant to exemptions from registration requirements of the Securities
Act. The transaction involved the exercise of warrants originally issued on
November 4, 2004. The transaction involved the issuance of 3,000,000 shares of
common stock at $0.75 per share in accordance with the warrants. The purchasers
and corresponding shares issued are: Firebird Global Master Fund, Ltd, 1,500,000
shares; Firebird Avrora Fund, Ltd. 750,000 shares; and Firebird Republics Fund,
Ltd. 750,000 shares.
j. On December 19, 2006, Global Gold Mining entered a "Restructuring, Royalty,
and Joint Venture Termination Agreement" with Caucasus Resources Pty. Ltd.
("CR") a wholly owned subsidiary of Australia based and ASX listed Iberian
Resources Limited ("Iberian"). The Agreement restructures the parties' Aigedzor
Mining Company Joint Venture to transfer Global Gold Mining's 20% interest to CR
in exchange for: one million dollars; a 2.5% Net Smelter Return royalty payable
on all products produced from the Lichkvaz and Terterasar mines as well as from
any mining properties acquired in a 20 kilometer radius of the town of Aigedzor
in southern Armenia; and five million shares of Iberian's common stock, which
are restricted for one year. If the average closing market price for Iberian
shares Common Stock for any consecutive period of thirty trading days during the
one year restriction period shall drop below AUS$0.50, GGM shall, subject to the
receipt by Iberian of any necessary approvals under the Listing Rules of
Australian Stock Exchange Limited, promptly receive from Iberian an additional
2.5 million shares of Iberian's common stock. Global Gold Mining retains the
right to participate up to 20% in any new projects undertaken by Iberian or its
affiliates in Armenia until August 15, 2015.
11. SUBSEQUENT EVENTS (Unaudited)
a. On January 1, 2007, the Company entered an employment agreement with Hrayr
Agnerian, designating him as the Company's Senior Vice President for Exploration
and Development. Mr. Agnerian formerly worked at Scott Wilson Roscoe Postle
Associates Inc. (Scott Wilson RPA), and is no longer an employee of Scott Wilson
RPA. The employment agreement provides that Mr. Agnerian will receive an annual
base salary of $62,500, and is entitled to receive any bonus as determined in
accordance with any plan approved by the Board of Directors. Mr. Agnerian
resigned from the Board of Directors effective December 31, 2006. The employment
agreement is for an initial term of two years, terminating on December 31, 2008.
Pursuant to employment agreement, Mr. Agnerian was also granted (i) Eighty Three
Thousand Three Hundred Thirty Four (83,334) shares of the common stock of Global
Gold Corporation pursuant to the terms of the Restricted Stock Award to vest in
four equal installments of 20,834 shares every six months, commencing on June 1,
2007 and (ii) options to acquire Eighty Three Thousand Three Hundred Thirty Four
(83,334) shares of common stock of Company at the rate of 41,667 per year from
January 1, 2007 through January 1, 2008 (totaling 83,334) at $0.88 per share
(the arithmetic mean of the high and low prices of the Company's stock on
December 29, 2006), to vest in two equal installments of 41,667 shares each on
January 1, 2007 and January 1, 2008. The restricted stock and options are
subject to a substantial risk of forfeiture upon termination of his employment
with the Company during the term of the Agreement and the option grant was made
pursuant to the Global Gold Corporation 2006 Stock Incentive Plan.
F-20
The foregoing descriptions of the Employment Agreement with Mr. Agnerian is
qualified in its entirety by reference to the actual terms of the agreement
which will be filed as an exhibit to this Form 10-KSB.
b. On January 11, 2007, the Company issued as directors fees to each of the five
directors (Nicholas J. Aynilian, Drury J. Gallagher, Harry Gilmore, Ian Hague,
and Van Z. Krikorian) stock options to purchase 100,000 Common Stock of the
Company each at $.86 per share. The option grants were made pursuant to the
Global Gold Corporation 2006 Stock Incentive Plan. In addition, the Company
granted 50,000 shares of restricted Common Stock to Harry Gilmore as an initial
director's fee at the fair market value of $.86 per share.
c. On January 18, 2007, Global Gold Uranium entered into a "Labrador Uranium
Claims Agreement" with Messrs. Alexander Turpin and James Weick to acquire an
option with the right to a one hundred percent interest ownership of mineral
license rights at or near Grand Lake (approximately 1,850 acres) and Shallow
Lake (approximately 5,750 acres), both in the Canadian Province of Newfoundland
and Labrador. Global Gold Uranium will be solely responsible for exploration and
management during the option periods and can exercise the option to acquire one
hundred percent of the license rights at either property by granting the sellers
a 1.5% NSR royalty which can be bought out for $2,000,000 cash or at the
seller's option in common stock of the Company valued at the six month weighted
average of the stock a the time of exercise. All dollar references are to
Canadian dollars. Global Gold Uranium will earn a One Hundred Percent (100%)
option in the Licenses by paying cash and common stock, all as described in the
exhibit below. In addition, Global Gold Uranium has completed staking 300 claims
(approximately 18,531 acres) in the immediate vicinity of the Grand Lake and
Shallow Lake properties.
F-21
EX-3.(I)
2
ex31.txt
AMENDED CERTIFICATE OF INCORPORATION
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GLOBAL GOLD CORPORATION
It is hereby certified that:
1. (a) The present name of the corporation (hereinafter called
the "corporation") is Global Gold Corporation.
(b) The name under which the corporation was
originally incorporated is Triad Energy Corp., and the date of filing the
original certificate of incorporation of the corporation with the Secretary of
State of the State of Delaware is February 21, 1980.
2. The provisions of the certificate of incorporation of the
corporation as heretofore amended and/or supplemented, and as herein amended,
are hereby restated and integrated into the single instrument which is
hereinafter set forth, and which is entitled Amended and Restated Certificate of
Incorporation of Global Gold Corporation without any further amendments other
than the amendments herein certified and without any discrepancy between the
provisions of the certificate of incorporation as heretofore amended and
supplemented and the provisions of the said single instrument hereinafter set
forth.
3. The amendments and the restatement of the certificate of
incorporation herein certified have been duly adopted by the board of directors
and the stockholders of the corporation in accordance with the provisions of
Sections 228, 242, and 245 of the General Corporation Law of the State of
Delaware.
4. The certificate of incorporation of the corporation, as
amended and restated herein, shall at the effective time of this restated
certificate of incorporation read as follows:
"AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GLOBAL GOLD CORPORATION
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and the acts amendatory thereof and supplemental thereto, and known,
identified and referred to as the "General Corporation law of the State of
Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
Global Gold Corporation
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the State of Delaware is
2711 Centerville Road, Suite 400, City of Wilmington, Delaware 19808; and the
name of the registered agent of the corporation in the State of Delaware is
Corporation Service Company.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation is authorized to issue is one hundred million (100,000,000) shares
of common stock, par value $.001 per share.
FIFTH: The corporation is to have perpetual existence.
SIXTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of Directors.
The number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the By-Laws.
The phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number of
directors which the corporation would have if there were no vacancies.
No election of directors need be by written ballot.
2. After the original or other By-Laws of the corporation have
been adopted, amended, or repealed, as the case may be, in accordance
with the provisions of Section 109 of the General Corporation Law of
the State of Delaware, and, after the corporation has received any
payment for any of its stock, the power to adopt, amend, or repeal the
By-Laws of the corporation may be exercised by the Board of Directors
of the corporation; provided, however, that any provision for the
classification of directors of the corporation for staggered terms
pursuant to the provisions of subsection (d) of Section 141 of the
General Corporation Law of the State of Delaware shall be set forth in
an initial By-Law or in a By-Law adopted by the stockholders entitled
to vote of the corporation unless provisions for such classification
shall be set forth in this certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only
one class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue
more than one class of stock, no outstanding share of any class of
stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders except as the provisions
of paragraph (2) of subsection (b) of section 242 of the General
Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the increase
or decrease in the number of authorized shares of said class.
SEVENTH: The corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
EIGHTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
NINTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article NINTH.
TENTH: The personal liability of the directors of the.
corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section 102 of the General Corporation Law of the State
of Delaware, as the same may be amended and supplemented."
Signed on November 20, 2003
/s/ Drury J. Gallagher
Drury J. Gallagher, Chairman,
Chief Executive Officer and Treasurer
EX-3.(II)
3
ex32.txt
AMENDED BYLAWS
Exhibit 3.2
AMENDMENT AND RESTATEMENT
of
BY-LAWS
of
GLOBAL GOLD CORPORATION
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
1. CERTIFICATES REPRESENTING STOCK. Certificates representing stock in the
corporation shall be signed by, or in the name of, the corporation by the
Chairman or Vice-Chairman of the Board of Directors, if any, or by the President
or a Vice-President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the corporation. Any or all the
signatures on any such certificate may be a facsimile. In case any officer,
transfer agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent, or
registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one
class of stock or more than one series of any class of stock, and whenever the
corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock or uncertificated
shares in place of any certificate theretofore issued by it, alleged to have
been lost, stolen, or destroyed, and the Board of Directors may require the
owner of the lost, stolen, or destroyed certificate, or his legal
representative, to give the corporation a bond sufficient to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss, theft, or destruction of any such certificate or the issuance of
any such new certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the General
Corporation Law, the Board of Directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
the stock of the corporation shall be uncertificated shares. Within a reasonable
time after the issuance or transfer of any uncertificated shares, the
corporation shall send to the registered owner thereof any written notice
prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be required
to, issue fractions of a share. If the corporation does not issue fractions of a
share, it shall (1) arrange for the disposition of fractional interests by those
entitled thereto, (2) pay in cash the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined, or (3)
issue scrip or warrants in registered form (either represented by a certificate
or uncertificated) or bearer form (represented by a certificate) which shall
entitle the holder to receive a full share upon the surrender of such scrip or
warrants aggregating a full share. A certificate for a fractional share or an
uncertificated fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing the full shares or uncertificated
full shares before a specified date, or subject to the conditions that the
shares for which scrip or warrants are exchangeable may be sold by the
corporation and the proceeds thereof distributed to the holders of scrip or
warrants, or subject to any other conditions which the Board of Directors may
impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the transfer or
registration of transfer of shares of stock, if any, transfers or registration
of transfers of shares of stock of the corporation shall be made only on the
stock ledger of the corporation by the registered holder thereof, or by his
attorney thereunto authorized by power of attorney duly executed and filed with
the Secretary of the corporation or with a transfer agent or a registrar, if
any, and, in the case of shares represented by certificates, on surrender of the
certificate or certificates for such shares of stock properly endorsed and the
payment of all taxes due thereon.
5. RECORD DATE FOR STOCKHOLDERS. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty nor less than ten days before the date of such meeting.
If no record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining the stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
the General Corporation Law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested.
2
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by the General Corporation Law, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the day on which
the Board of Directors adopts the resolution taking such prior action. In order
that the corporation may determine the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to notice of
a meeting of stockholders or a waiver thereof or to participate or vote thereat
or to consent or dissent in writing in lieu of a meeting, as the case may be,
the term "share" or "shares" or "share of stock" or "shares of stock" or
"stockholder" or "stockholders" refers to an outstanding share or shares of
stock and to a holder or holders of record of outstanding shares of stock when
the corporation is authorized to issue only one class of shares of stock, and
said reference is also intended to include any outstanding share or shares of
stock and any holder or holders of record of outstanding shares of stock of any
class upon which or upon whom the certificate of incorporation confers such
rights where there are two or more classes or series of shares of stock or upon
which or upon whom the General Corporation Law confers such rights
notwithstanding that the certificate of incorporation may provide f or more than
one class or series of shares of stock, one or more of which are limited or
denied such rights thereunder; provided, however, that no such right shall vest
in the event of an increase or decrease in the authorized number of shares of
stock of any class or series which is otherwise denied voting rights under the
provisions of the certificate of incorporation, except as any provision of law
may otherwise require.
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time
fixed, from time to time, by the directors, provided, that the first annual
meeting shall be held on a date within thirteen months after the organization of
the corporation, and each successive annual meeting shall be held on a date
within thirteen months after the date of the preceding annual meeting. A special
meeting shall be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such
place, within or without the State of Delaware, as the directors may, from time
to time, fix. Whenever the directors shall fail to fix such place, the meeting
shall be held at the registered office of the corporation in the State of
Delaware.
- CALL. Annual meetings and special meetings may be called by the
directors or by any officer instructed by the directors to call the meeting.
3
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be
given, stating the place, date, and hour of the meeting and stating the place
within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special meeting shall in all instances state the purpose or purposes for which
the meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States Mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city or other municipality or community where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the corporation, or to vote at any meeting of
stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided
over by one of the following officers in the order of seniority and if present
and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, the President, a Vice-President, or, if none of the foregoing is in
office and present and acting, by a chairman to be chosen by the stockholders.
The Secretary of the corporation, or in his absence, an Assistant Secretary,
shall act as secretary of every meeting, but if neither the Secretary nor an
Assistant Secretary is present, the Chairman of the meeting shall appoint a
secretary of the meeting.
4
- PROXY REPRESENTATION. Every stockholder may authorize another person
or persons to act for him by proxy in all matters in which a stockholder is
entitled to participate, whether by waiving notice of any meeting, voting or
participating at a meeting, or expressing consent or dissent without a meeting.
Every proxy must be signed by the stockholder or by his attorney-in-fact. No
proxy shall be voted or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and, if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots, or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots, or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question, or matter determined by him or them and execute a
certificate of any fact found by him or them.
- QUORUM. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum.
- VOTING. Each share of stock shall entitle the holders thereof to one
vote. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of directors. Any other action shall be authorized by a majority of
the votes cast except where the General Corporation Law prescribes a different
percentage of votes and/or a different exercise of voting power, and except as
may be otherwise prescribed by the provisions of the certificate of
incorporation and these Bylaws. In the election of directors, and for any other
action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the General
Corporation Law to be taken at any annual or special meeting of stockholders, or
any action which may be taken at any annual or special meeting of stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Action taken pursuant to this paragraph shall be subject to the provisions of
Section 228 of the General Corporation Law.
5
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation shall
be managed by or under the direction of the Board of Directors of the
corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a citizen of
the United States, or a resident of the State of Delaware. The number of
directors constituting the whole board shall be at least two. Subject to the
foregoing limitation, such number may be fixed from time to time by action of
the stockholders or of the directors, or, if the number is not fixed, the number
shall be two. The number of directors may be increased or decreased by action of
the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members thereof
shall have been named in the certificate of incorporation, shall be elected by
the incorporator or incorporators and shall hold office until the first annual
meeting of stockholders and until their successors are elected and qualified or
until their earlier resignation or removal. Any director may resign at any time
upon written notice to the corporation. Thereafter, directors who are elected at
an annual meeting of stockholders, and directors who are elected in the interim
to f ill vacancies and newly created directorships, shall hold off ice until the
next annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Except as the General
Corporation Law may otherwise require, in the interim between annual meetings of
stockholders or of special meetings of stockholders called for the election of
directors and/or for the removal of one or more directors and for the filling of
any vacancy in that connection, newly created directorships and any vacancies in
the Board of Directors, including unfilled vacancies resulting from the removal
of directors for cause or without cause, may be filled by the vote of a majority
of the remaining directors then in office, although less than a quorum, or by
the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix,
except that the first meeting of a newly elected Board shall be held as soon
after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the
State of Delaware as shall be fixed by the Board.
6
- CALL. No call shall be required for regular meetings for which the
time and place have been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, the Vice-Chairman of the Board,
if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required
for regular meetings for which the time and place have been fixed. Written,
oral, or any other mode of notice of the time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director or to any member of a
committee of directors who submits a written waiver of notice signed by him
before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the directors need be specified in any
written waiver of notice.
- QUORUM AND ACTION. A majority of the whole Board shall constitute a
quorum except when a vacancy or vacancies prevents such majority, whereupon a
majority of the directors in office shall constitute a quorum , provided, that
such majority shall constitute at least one-third of the whole Board. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board. The quorum and voting provisions herein stated
shall not be construed as conflicting with any provisions of the General
Corporation Law and these Bylaws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors.
Any member or members of the Board of Directors or of any committee
designated by the Board may participate in a meeting of the Board, or any such
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. otherwise, the Vice-Chairman
of the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the General
Corporation Law, any director or the entire Board of Directors may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote at an election of directors.
7
6. COMMITTEES. The Board of Directors may, by resolution passed by a majority of
the whole Board, designate one or more committees, each committee to consist of
one or more of the directors of the corporation. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any such committee or committees, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation with the exception of any authority the delegation of which is
prohibited by Section 141 of the General Corporation Law, and may authorize the
seal of the corporation to be affixed to all papers which may require it.
7. WRITTEN ACTION. Any action required permitted to be taken at any meeting of
the Board of Directors or any committee thereof may be taken without a meeting:
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a
Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the
Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an
Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the Chairman or Vice-Chairman of
the Board, if any, need be a director. Any number of offices may be held by the
same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer
shall be chosen for a term which shall continue until the meeting of the Board
of Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform
such duties in the management and operation of the corporation as shall be
prescribed in the resolutions of the Board of Directors designating and choosing
such officers and prescribing their authority and duties, and shall have such
additional authority and duties as are incident to their office except to the
extent that such resolutions may be inconsistent therewith. The Secretary or an
Assistant Secretary of the corporation shall record all of the proceedings of
all meetings and actions in writing of stockholders, directors, and committees
of directors, and shall exercise such additional authority and perform such
additional duties as the Board shall assign to him. Any officer may be removed,
with or without cause, by the Board of Directors. Any vacancy in any office may
be filled by the Board of Directors.
8
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors
shall prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject
to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BY-LAWS
Subject to the provisions of the certificate of incorporation and the
provisions of the General Corporation Law, the power to amend, alter, or repeal
these Bylaws and to adopt new Bylaws may be exercised by the Board of Directors
or by the stockholders.
ARTICLE VII
INDEMNIFICATION OF OFFICERS AND DIRECTORS AND OTHERS
(a) The corporation shall, to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law, as the same may be amended from time to time,
indemnify any and all persons whom it shall have power to indemnify wider such
section from and against any and all of the expenses, liabilities or other
matters referred to in or covered by such section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those indemnification may be entitled wider any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The corporation shall pay the expenses of its officers and directors
incurred in defending a civil or criminal action, suit or proceeding as such
expenses are incurred and in advance of the final disposition of such action,
suit or proceeding provided that the corporation receives in advance of any such
payment an undertaking by and on behalf of the director and officer to repay the
amount of such expenses paid by the corporation if a court of competent
jurisdiction ultimately determines that such officer or director is not entitled
to be indemnified by the corporation.
9
ARTICLE VIII
OFFICES
1. Registered Office. The registered office shall be established and maintained
at Wilmington, Delaware and Corporation Service Company shall be the registered
agent of the Corporation in charge thereof.
2. Other Offices. The corporation may have other offices, either within or
without the State of Delaware, at such place or places as the Board of Directors
may from time to time appoint or the business of the corporation may require,
provided, however, that the corporation's books and records shall be maintained
at such place within the continental United States as the Board of Directors
shall from time to time designate.
EX-10
4
ex107.txt
EMPLOYMENT - HRAYR AGNERIAN
Exhibit 10.7
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of January, 2007 between Global
Gold Corporation, a Delaware corporation (the "Company"), and Hrayr Agnerian,
(the "Employee") (the "Agreement").
W I T N E S S E T H:
WHEREAS, the Company needs the active service of the Employee in
light of the Company's efforts to acquire, develop, and operate mining projects
and to carry out its exploration, mining, and business operations;
WHEREAS, the Company and the Employee desire to enter into an
employment agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES.
(a) The Company hereby employs the Employee, and the Employee hereby
accepts and agrees to such employment, as Senior Vice President for Exploration
and Development and, in such capacity, to be responsible for activities
implementing exploration and mining projects as well as those customarily
associated with such a position including, exploration and mining programs and
their implementation, and work with technical staff in the United States and in
countries where the Company has operations. The Employee shall, subject to the
supervision and control of the Chairman and President of the Company, perform
such executive duties and exercise such supervisory powers over and with regard
to the business of the Company and any present and future subsidiaries,
consistent with such position, and such additional duties as specified or as may
be assigned to him from time to time. The Employee understands that significant
travel is included in this position.
(b) The Employee agrees to devote one third (33 1/3%) of his
available business time to the performance of his duties hereunder. The Employee
may provide services to other organizations, on a compensation or pro bono
basis, provided that such services do not constitute more one third (33 1/3%)
than of his available business time.
2. TERM. The term of this Agreement shall be for a period of two years,
commencing on January 1, 2007 and ending on December 31, 2008, and shall be
automatically renewed for consecutive one-year periods thereafter unless
terminated (a) by either party on 90 days written notice prior to the expiration
of the initial term hereof or any year thereafter or (b) sooner terminated as
otherwise provided herein.
1
3. COMPENSATION.
(a) Base Compensation. In consideration for the services rendered by
the Employee under this Agreement, the Company shall deliver to the Employee as
base compensation for the term of this Agreement a total of Eighty Three
Thousand Three Hundred Thirty Four (83,334) shares of the common stock of Global
Gold Corporation pursuant to the terms of the Restricted Stock Award attached
hereto as Exhibit A, (the "Restricted Stock Award"). In addition to the
foregoing, the Company shall pay to the Employee, as base compensation, the sum
of $62,500 for each 12-month period commencing on and after January 1, 2007
during the term of this Agreement, payable in equal monthly installments of $
5,208.33 on the 15th day of each month. In addition and contingent on the
approval of the Compensation Committee (which will be proposed to the directors
at their next meeting), Employee shall be awarded stock options to acquire
Eighty Three Thousand Three Hundred Thirty Four (83,334) shares of common stock
of Company at the rate of 41,667 per year from January 1, 2007 through January
1, 2008 (totaling 83,334) all in accordance with the terms and conditions above.
(b) Bonus Compensation. In addition to the foregoing compensation,
the Employee shall be entitled to receive annual bonus compensation ("Annual
Bonus") in an amount determined in accordance with any bonus plan approved by
the Board of Directors, or any committee thereof duly authorized by the Board to
make such determination, based upon qualitative and quantitative goals
determined by the Board of Directors, or such committee thereof, in its sole
discretion, as the case may be. Any Annual Bonus shall be subject to all
applicable tax withholdings.
4. WORKING FACILITIES. The Company shall provide office space for the
Employee for the performance of his services hereunder, and will provide such
other facilities and services commensurate with the Company's needs as are
reasonably necessary for the performance of his duties hereunder, as determined
by the board of Directors.
5. INDEMNFICATION. During the term of this Agreement, the Company shall
provide to the Employee insurance covering indemnification for activities taken
in good faith on the Company's behalf.
6. VACATIONS. The Employee shall be entitled each year during the term of
this Agreement to a vacation period of four weeks during which period all
compensation and other rights to which the Employee is entitled hereunder shall
be provided in full. Such vacation may be taken, in the Employee's discretion,
at such time or times as are not inconsistent with the reasonable business needs
of the Company upon the consent of the Company. During the term of this
Agreement, the vacation time provided for herein shall not be cumulative to the
extent not taken by the Employee during a given year.
2
7. TERMINATION.
(a) Early Termination by Company for Cause. During the term of this
Agreement, the Employee's employment may be terminated by the Company for Cause
(as defined herein) on 30 days prior written notice by means of a Notice of
Termination, and an opportunity for the Employee, accompanied by counsel of his
choice, to address the full Board of Directors, that one of the following
conditions exists or one of the following events has occurred (each of which is
defined as "Cause"):
(i) Wrongful act or acts on the part of the Employee
which caused material damage to the Company;
(ii) The arrest, filing of charges or conviction of the
Employee for a crime involving the Company or moral turpitude;
(iii) The refusal or inability by the Employee, continued for at
least 14 days, to perform such employment duties as may
reasonably be delegated or assigned to him under this
Agreement;
(iv) Willful and unexcused neglect by the Employee of his
employment duties under this Agreement continued for at
least 14 days after written warning; or
(v) Any other material breach by the Employee of the
provisions of this Agreement.
Pending termination, the Company may suspend Employee at will.
Subject only to a final determination by dispute resolution procedure pursuant
to the provisions of Section 10 of this Agreement, the Board of Directors'
determination, in good faith, in writing that cause exists for termination of
the Employee's employment shall be binding and conclusive for all purposes under
this Agreement. Upon such determination by the Board of Directors, the
Employee's compensation pursuant to Section 3 hereof and all other benefits
provided hereunder shall terminate on the Termination Date, except that the
Employee shall be entitled to be paid severance pay equal to his then base
compensation for a period of three months thereafter, unless the termination is
based on fraud or reasons stated in Section 7(a) (ii) above. In the event that
the Employee desires to take any matter with respect to such determination of
Termination to arbitration, he must commence a proceeding within 30 days after
receipt of written notice of the Board of Directors' determination. If the
Employee fails to take such action within such period, he will be deemed
conclusively to have waived his right to adjudication of the termination of his
employment hereunder.
(b) Termination by Employee. In the event that the Company shall
default in the performance of any of its obligations under this Agreement in any
material respect, and shall not cure such default within 10 days of receipt by
the Company of written notice of such default from the Employee, the Employee
may terminate this Agreement by delivery of a Notice of Termination. Upon any
termination pursuant to the provisions of this Section 7(b), the Employee shall
be entitled to receive, as liquidated damages and not as a penalty, one month's
3
payments which would have been made to the Employee on account of his base
salary in effect at the date of the delivery of a Notice of Termination. Upon
fulfillment of the conditions set forth in Section 7(b) hereof and subject to
Section 7(f) hereof, all rights and obligations of the parties under this
Agreement shall thereupon be terminated. The Employee shall have no obligation
to mitigate damages, and amounts payable pursuant to the provisions of this
Section 7(b) shall not be reduced on account of any income earned by the
Employee from other employment or other sources.
(c) Termination by Reason of Disability. In the event that Employee
shall be prevented from rendering all of the services or performing all of his
duties hereunder by reason of illness, injury or incapacity (whether physical or
mental) for a period of six consecutive months, determined by an independent
physician selected by the Board of Directors of the Company, the Company shall
have the right to terminate this Agreement, by giving 10 days prior written
notice to the Employee, provided that the Company shall continue to pay his then
base compensation for a period of 12 months thereafter (exclusive of any benefit
under the Restricted Stock Award). Until terminated in the manner set forth in
this Section 7(c), the Employee shall be entitled to receive his full
compensation and benefits provided hereunder through the Termination Date. Any
payments to the Employee under any disability insurance or plan maintained by
the Company shall be applied against and shall reduce the amount of the base
compensation payable by the Company under this Section 7(c).
(d) Termination by Reason of Death. In the event that the Employee
shall die during the term of this Agreement, this Agreement shall terminate upon
such death. The death benefit payable to the Employee under this Agreement
(exclusive of any benefit under the Restricted Stock Award) shall be three
months salary plus the life insurance benefits provided to the Employee, if any.
(e) Certain Definitions.
(i) Any termination of the Employee's employment by the
Company or by the Employee shall be communicated by a Notice of Termination to
the other party hereto. For purposes hereof, a "Notice of Termination" shall
mean a notice which shall state the specific reasons, and shall set forth in
reasonable detail the facts and circumstances, for such termination.
(ii) "Termination Date" shall mean the date specified in the
Notice of Termination as the last day of Employee's employment by the Company.
(f) Continued Maintenance of Benefit Plans in Certain Cases.
Notwithstanding anything contained in this Agreement to the contrary, if the
Employee's employment is terminated pursuant to Sections 7(b) or 7(c) hereof,
the Company shall maintain in full force and effect, at the Employee's expense,
for the continued benefit of the Employee for the number of years (including
partial years) remaining in the term of employment hereunder, all employee
benefit plans and programs in which the Employee was entitled to participate
immediately prior to the Termination Date, provided that the Employee's
continued participation is possible under the general terms and provisions of
such plans and programs. In the event that the Employee's participation in any
such plan or program is barred, the Company shall have no obligation to provide
any substitute benefits for the Employee.
4
8. CONFIDENTIALITY.
(a) During the term of this Agreement, and for a period of two years
thereafter, the Employee shall not, without the prior written consent of the
Board of Directors of the Company, disclose to any person, other than an
employee of the Company or a person to whom disclosure is reasonably necessary
or appropriate in connection with the performance by the Employee of his duties
hereunder, any of the Company's confidential information obtained by the
Employee during the term of this Agreement, including, without limitation, trade
secrets, products, designs, customers or methods of distribution.
(b) The obligations of confidentiality contained in this Section
shall not extend to any matter which is disclosed by the Employee pursuant to an
order of a governmental body or court of competent jurisdiction or as required
pursuant to a legal proceeding in which the Employee or the Company is a party.
These obligations of confidentiality are in addition to, not in place of any
other applicable confidentiality obligations.
9. CERTAIN REMEDIES IN EVENT OF BREACH. In the event that the Employee
commits a breach, or threatens to commit a breach, of any of the restrictions on
confidentiality, the Company shall have the following rights and remedies:
(a) to obtain an injunction restraining any violation or threatened
violation of the confidentiality provisions or any other appropriate decree of
specific performance by any court having jurisdiction, it being acknowledged and
agreed by the Employee that the services rendered, and to be rendered to the
Company by him as an Employee and as legal counsel, are of a special, unique and
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company; and
(b) to require the Employee to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits (collectively the "Benefits") derived or received by the Employee as
the result of any transactions constituting a breach of any of the
confidentiality provisions, and the Employee hereby agrees to account for and
pay over the Benefits to the Company.
Each of the rights and remedies enumerated in this Section 10 shall
be independent of the other, and shall be severally enforceable, and such rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company at law or in equity.
5
10. DISPUTE RESOLUTION.
(a) Venue and Choice of Law. In the event of any disagreement or
controversy arising out of or relating to this Agreement, such controversy or
disagreement shall be resolved by arbitration administered by the American
Arbitration Association in New York City, and any award granted in such
arbitration shall finally determine such controversy or dispute.
(b) This Agreement and the rights of the parties hereunder shall be
governed by the law of the State of New York, without regard to conflicts of law
principles.
11. MISCELLANEOUS.
(a) Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as duly given on (a) the date of delivery, if delivered in person,
by nationally recognized overnight delivery service or by facsimile or (b) three
days after mailing if mailed from within the contin-ental United States by
registered or certified mail, return receipt requested to the party entitled to
receive the same, if to the Company, Global Gold Corporation, 45 East Putnam
Avenue, Greenwich, Connecticut 06830, facsimile number (203) 422-2330; and if to
the Employee, Mr. Hrayr Agnerian, CANADA. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
(b) Entire Agreement; Waiver of Breach. This Agreement constitutes
the entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it may
not be modified or amended in any manner other than as provided herein; and no
waiver of any breach or condition of this Agreement shall be deemed to have
occurred unless such waiver is in writing, signed by the party against whom
enforcement is sought, and no waiver shall be claimed to be a waiver of any
subsequent breach or condition of a like or different nature.
6
(c) Binding Effect; Assignability. This Agreement and all the terms
and provision hereof shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors and permitted assigns. This
Agreement and the rights of the parties hereunder shall not be assigned except
with the written consent of all parties hereto.
(d) Captions. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.
(e) Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pro-nouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
(f) Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unen-forceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
(g) Amendments. This Agreement may not be amended except in a
writing signed by all of the parties hereto.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page and this Agreement may be
executed by the affixing of such signature pages executed by the parties to one
copy of the Agreement; all of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
Global Gold Corporation
By: _____________________ ______________________
Drury J.Gallagher, Hrayr Agnerian
Chairman and CEO
7
EXHIBIT A
Global Gold Corporation
45 East Putnam Avenue
Greenwich, CT 06830
January 1, 2007
Mr. Hrayr Agnerian
CANADA
Re: Restricted Stock Award
Dear Mr. Agnerian:
As consideration for your employment agreement with Global Gold Corporation (the
"Corporation") and as an inducement for your rendering of services to the
Corporation, we hereby grant you Eighty Three Thousand Three Hundred Thirty Four
(83,334) shares of the Common Stock of Global Gold Corporation, evidenced by a
certificate of shares of our common stock, $.001 par value per share (the
"Shares"), subject to applicable securities law restrictions and the terms and
conditions set forth herein:
1. For the first six month period commencing with the date
hereof within which you render the services provided herein, you shall become
fully vested in one fourth of the total Shares granted hereunder (with half
shares being rounded up). For each successive six month period thereafter
commencing on June 1, 2007 through December 31, 2008, you shall become fully
vested in an additional one fourth of the total Shares granted hereunder. Thus,
if you complete six, twelve, eighteen, and then twenty four months of service as
provided hereunder, you shall be vested in 20,834, 41,667, 62,501, and 83,334 of
the Shares granted hereunder, respectively.
2. In the event of your termination of your employment on or
before the expiration of the initial six month period commencing with the date
hereof or any subsequent six month period thereafter during the 24-month period
commencing with January 1, 2007 for any reason, you shall forfeit all right,
title and interest in and to any of the Shares granted hereunder which have not
become vested in you, without any payment by the Company therefore unless
mutually agreed otherwise.
8
3. (a) Any Shares granted hereunder are not transferable and
cannot be assigned, pledged, hypothecated or disposed of in any way until they
become vested, and may be transferred thereafter in accordance with applicable
securities law restrictions. Any attempted transfer in violation of the Section
shall be null and void.
(b) Notwithstanding anything contained in this
Agreement to the contrary, after
you become vested in any of the Shares granted hereunder, no sale, transfer or
pledge thereof may be effected without an effective registration statement or an
opinion of counsel for the Corporation that such registration is not required
under the Securities Act of 1933, as amended, and any applicable state
securities laws.
4. During the period commencing with the date hereof and prior
to your forfeiture of any of the Shares granted hereunder, you shall have all
right, title and interest in and to the Shares granted hereunder, including the
right to vote the Shares and receive dividends or other distributions with
respect thereto.
5. You shall be solely responsible for any and all Federal,
state and local income taxes arising out of your receipt of the Shares and your
future sale of other disposition of them.
6. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to its conflicts of law principles. All parties hereto
(i) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement shall be instituted only in a Federal or state court in the
City of New York in the State of New York, (ii) waive any objection which they
may now or hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the exclusive jurisdiction of any
Federal or state court in the City of New York in the State of New York, in any
such suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this
Agreement. All parties hereto agree that the mailing of any process in any suit,
action or proceeding at the addresses of the parties shown herein shall
constitute personal service thereof.
7. If any provision of this Agreement shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
8. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties and their
respective heirs and successors and, in the case of the Corporation, its
assigns.
9. This Agreement may not be amended except in a writing
signed by all of the parties hereto.
9
10. Nothing contained herein shall be construed to create an
employment agreement between the Corporation and you or require the Corporation
to employ or retain you under such a contract or otherwise.
11. Notwithstanding anything contained this in Agreement to
the contrary the Shares shall become fully vested upon your death or upon your
becoming disabled, which shall mean you shall have been unable to render all of
your duties by reason of illness, injury or incapacity (whether physical or
mental) for a period of six consecutive months, determined by an independent
physician selected by the Board of Directors of the Corporation.
12. In the event of any conflict between the terms of this Agreement and of the
Employment Agreement, the provisions contained in this Agreement shall control.
If this letter accurately reflects our understanding, please
sign the enclosed copy of this letter at the bottom and return it to us.
Very truly yours,
Global Gold Corporation
By:___________________________
Drury J. Gallagher, Chairman
Agreed:
______________________________
Hrayr Agnerian
GLOBAL GOLD CORPORATION
STOCK OPTION GRANT AGREEMENT
Granted to: Hrayr Agnerian Grant Date: January 1, 2007
(the "Effective Date").
Canadian Social Security No.: 618-141-766 Option price per share: $0.88
Option No.: 4 Governing Document: Global Gold Corporation 2006
Stock Incentive Plan (the "Plan")
Total Shares: 83,334
Vesting Period: 41,667 as of 1-1-07
and the remaining 41,667 as of 1-1-08
Your Option
This option is granted pursuant to, and is subject to the terms and conditions
of, the Plan. Except as otherwise specifically stated herein, any inconsistency
between the terms of this option agreement and the Plan shall be resolved by
reference to the terms and provisions of the Plan.
If you are an employee of Global Gold Corporation (the "Corporation"), or its
subsidiaries or affiliates, your option is intended to qualify as an Incentive
Stock Option under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), except as follows:
(1) To the extent that the aggregate fair market value of the common stock
$.001 par value per share (the "Common Stock"), of the Corporation with
respect to which stock options intended to constitute incentive options
that are exercisable for the first time by you during any calendar year
exceeds $100,000, such options shall be treated as options which are
not incentive stock options. The fair market value of the Common Stock
shall be determined as of the date of the option grant.
(2) To the extent that you exercise your option after the three-month
period following the termination of your employment with the
Corporation (or its subsidiaries or affiliates), your option shall be
treated as an option which is not an incentive stock option.
(3) To the extent that you dispose of Common Stock purchased pursuant to an
incentive stock option granted hereunder within two years from the date
of grant or within one year after the transfer of Common Stock to you
as a result of your exercise of the option granted hereunder, such
disposition shall be treated as a "disqualifying disposition." If you
make such a disposition, you agree to promptly (but no later than
thirty days following such disposition) notify the Corporation in
writing of the date and terms of the disposition and provide such other
information regarding the disposition as the Corporation may require.
If you are a non-employee director of, or a consultant to, the Corporation, or
one of its subsidiaries, your option shall not qualify as an incentive stock
option under Section 422 of the Code.
Vesting
Your options shall vest as follows: 41,667 will vest on January 1, 2007 and the
remaining 41,667 shall vest on January 1, 2008.
Payment Methods
Payment of the option price shall be made in U.S. dollars or, in the discretion
of the Compensation Committee of the Corporation (the "Compensation Committee"),
in Common Stock of the Corporation valued at its fair market value, a
combination of such Common Stock and cash or any other method as may be approved
by the Compensation Committee or otherwise permitted under the Plan. However,
payment may not be made with Common Stock unless stock has been held for at
least six months. Payment shall be made to the Corporation at its corporate
office, Global Gold Corporation, 45 Putnam Avenue, Greenwich, CT 06830,
Attention: Chairman and CEO.
Conditions of Exercisability
The exercise of your option is subject to the following terms and conditions:
(1) As a prerequisite to delivery of any stock certificates upon your
exercise of an option granted hereunder, you shall give an undertaking
and agree to the placing of such legends on your certificates as may be
required by the Compensation Committee to assure compliance with any
federal or state securities laws. The Common Stock purchased pursuant
to the exercise of an option granted hereunder cannot be sold unless it
has been registered under the Securities Act of 1933, as amended (the
"Act"), or is subject to an exemption from registration under such Act.
(2) Except as provided below, you must be an employee or director of, or a
consultant to the Corporation or one of its subsidiaries at the date of
exercise and that employment, directorship or consultancy must have
been continuous from the date hereof. For the purposes of this Plan,
persons on company-authorized leaves of absence are considered
employees; however, long-term disability is not considered employment.
(3) In the event of a change of control of the Corporation your rights to
exercise this option shall be governed by your employment agreement, or
if not specifically addressed in your employment agreement or if you do
not have an employment agreement, shall be governed by the Plan. In the
event of (i) your death or (ii) the termination of your employment,
directorship or consultancy by the Corporation for cause or without
cause, by you or due to long-term disability while an active employee,
director or consultant, your rights to exercise this option shall be
governed by your employment agreement, or if not specifically addressed
in your employment agreement or if you do not have an employment
agreement, shall be as follows:
2
(a) In the event of your death while an active employee, director or
consultant, your rights to exercise this option which have vested to and
including the date of death may be exercised within one year after death by your
estate or by any person who acquires such option by inheritance or devise.
Thereafter, such rights shall lapse. You understand that to the extent that your
option is exercised after the period that is three months after your termination
or employment, it will be treated as an option which is not an incentive stock
option under Section 422 of the Code.
(b) In the event of the termination of your employment, directorship or
consultancy due to long-term disability, your rights to exercise this option
which have vested to and including the date of long-term disability may be
exercised within one year after the start of long-term disability by you or,
should you die within said one year period, by your estate or any such person
who acquires this option by inheritance or devise. Thereafter, such rights shall
lapse.
(c) In the event of your Retirement (as defined below) from the
Corporation, or one of its subsidiaries, your rights to exercise this option
which have vested to and including the date of your Retirement may be exercised
within three months after Retirement by you or, should you die within said three
months period, by your estate or any person who acquires this option by
inheritance or devise. Thereafter, such rights shall lapse. For purposes of this
Section 3(c), the term "Retirement" shall mean the termination of employment
after having reached age sixty-five (65).
(d) In the event of the termination of your employment other than for
Cause (as defined herein), death or disability your rights to exercise this
option which have vested to date of termination may be exercised within three
months after such termination (the "Post Termination Exercise Period") or,
should you die within said three month period, by your estate or any person who
acquires this option by inheritance or devise. Thereafter, such rights shall
lapse.
(e) If your employment is terminated for Cause, the option granted
hereunder shall immediately terminate upon the giving of notice of your
termination. The Compensation Committee shall determine in its sole discretion
when notice of termination was given and whether termination was for Cause. As
used in this Section 3(e), "Cause" means a person's personal dishonesty, willful
misconduct, breach of fiduciary duty, or failure to substantially perform
assigned duties relating to such person's performance hereunder (other than any
such failure owing to such person becoming disabled) as determined by the Board
of Directors of the Corporation in their sole discretion, or any willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or material breach of any provision of this option as
determined by the Board of Directors of the Corporation in their sole
discretion.
(4) If you are an employee, this option shall not be transferable by you to
anyone, other than after your death, in order to qualify as an
incentive stock option under Section 422 of the Code. However, if you
are a director or consultant, or to the extent this option does not
qualify as an incentive stock option under Code Section 422, this
option shall be transferable by you to your spouse, children, brother,
sister, parents or a trust in which these persons have more than fifty
percent of the beneficial interest, or by will or by the laws of
descent and distribution. During your lifetime, this option shall be
exercisable only by you or any transferee described in the previous
sentence.
3
(5) This option is not, in any event, exercisable after the expiration of
ten years from January 1, 2007.
(6) The exercise of this option is subject to all the terms and conditions
contained in the Plan, a copy of which is attached hereto.
(7) In connection with the exercise of this option, the Corporation, or one
of its subsidiaries, shall have the right to withhold from your salary
or other amounts payable to you, or to require you to make arrangements
to pay in a manner satisfactory to the Corporation, the appropriate
amount of applicable withholding taxes, if any. Without limiting the
scope of the preceding sentence, you shall have the right to elect to
pay your withholding taxes to the Corporation in cash or in such form
and manner as the Compensation Committee shall prescribe, to have such
number of shares of Common Stock otherwise issuable with respect to the
exercise of this option reduced by the amount necessary to satisfy all
or part, as you may so elect, of your statutory minimum withholding
obligation, and to transfer to the Corporation unrestricted shares of
Common Stock already held by you to satisfy all or any part, as you may
so elect, of your withholding obligation, provided that no more than
the statutory minimum withholding amount shall be so withheld.
Please retain this copy for your files.
GLOBAL GOLD CORPORATION GRANTEE:
By: _______________________________ _________________________________
Print Name: Drury J. Gallagher Print Name: Hrayr Agnerian
Title: Chairman and CEO
4
EX-10
5
ex108.txt
RESIGNATION - SIMON CLEGHORN
Exhibit 10.8
Global Gold Mining, LLC
45 East Putnam Avenue o Greenwich, CT 06830
Tel: 203.422.2300 o Fax: 203.422.2330
Zarobyan 1/1 o Yerevan, Armenia 375009
Tel: 3741.58.98.56 o Fax: 3741.54.56.98
September 29, 2006
Mr. Simon Cleghorn
Yerevan, Armenia
Dear Simon:
This letter agreement memorializes your resignation effective September
30, 2006 as Director of Exploration and Mining of Global Gold Mining, LLC
pursuant to your August 1, 2005 Employment Agreement, as amended August 1, 2006.
According to your August 1, 2005 restricted stock award, 15,000 of the total
45,000 shares of Global Gold Corporation have vested; according to your December
29, 2005 restricted stock award, none of the 10,000 shares awarded have vested.
Please return the certificates representing those awards, and the transfer agent
will be requested to issue you a new certificate for the 15,000 shares which
have vested.
Effective October 1, 2006, you will be employed as "Senior Geologist
for Exploration," available for up to five working days per month, or as
mutually agreed. Your compensation will be based on actual days worked and will
be at the rate of $600 (USD) per day. Global Gold Mining shall pay income,
social security and other employment related taxes imposed by Armenian law, and
you will be subject to the employment terms and conditions applicable to the
general staff.
Sincerely,
Van Z. Krikorian,
Manager
Acknowledged and Agreed
Simon Cleghorn
EX-10
6
ex1011.txt
STOCK SUBSCRIPTION - JULY 29, 2005
Exhibit 10.11
Copy #_________
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
GLOBAL GOLD CORPORATION
Global Gold Corporation, a Delaware corporation (the "Company", "we"
or "us"), is offering (the "Offering") to sell up to a maximum of 4,000,000
shares of its common stock, $.001 par value, with a minimum purchase of 50,000
shares of common stock with the purchase price of $0.75 per share for such
shares, or $37,500, payable in cash upon subscription, with each share purchased
also entitling the purchaser to a warrant for the purchase on or before July 31,
2007 of an additional one half of one share at the price per share of $1.50 (or
$0.75 per one half of one share) (the "Units" or the "Securities"). The price of
the shares of common stock has been determined by the Board of Directors of the
Company.
If all the Securities are sold, the Company will have issued an
additional 4,000,000 shares of its common stock for a total purchase price of
$3,000,000 and if all of the warrants are exercised the Company will have issued
an additional 2,000,000 shares of its common stock for an additional $3,000,000
for a total share issuance of 6,000,000 shares of its common stock for a total
purchase price of $6,000,000.
The Offering will terminate upon the earlier of the completion of the
sale of all of the Securities offered or July 29, 2005 unless the Offering is
extended up to an additional 10 days until August 8, 2005 by the Company in its
sole discretion (the "Offering Period"). The Offering may be closed from time to
time in tranches of any number of Securities (collectively the "Closings"). The
offering price of the Securities has been determined by the Company.
The common stock of the Company is publicly traded only on the OTCBB,
over-the-counter market.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved these securities or passed upon the accuracy or
adequacy of this Memorandum. Any representation to the contrary is a criminal
offense.
The date of this Memorandum is June 23, 2005.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" set
forth in this Memorandum, and any additional applicable risk factors reflected
in any annual, quarterly and other reports filed by the Company with the
Securities and Exchange Commission (the "SEC") (which filed documents shall be
referred to collectively as the "SEC Documents"), which are incorporated herein
by reference.
THE SECURITIES BEING OFFERED PURSUANT TO THIS MEMORANDUM HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE
BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED OR RESOLD UNLESS
THE SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY THE SECURITIES NOR WILL THERE BE ANY SALE OF THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL. ANY DISTRIBUTION OF THIS MEMORANDUM BY THE OFFEREE IN WHOLE OR IN
PART IS UNAUTHORIZED.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
MEMORANDUM AS LEGAL ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL AS TO
LEGAL AND RELATED MATTERS CONCERNING HIS INVESTMENT.
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM WILL BE EMPLOYED
IN THE OFFERING OF THE SECURITIES. EXCEPT FOR THIS MEMORANDUM OR STATEMENTS OR
DOCUMENTS CONTAINED HEREIN, NO PERSON HAS BEEN AUTHORIZED TO MAKE
REPRESENTATIONS, OR GIVE ANY INFORMATION, WITH RESPECT TO THE SECURITIES OFFERED
HEREBY EXCEPT THE INFORMATION CONTAINED HEREIN.
CONNECTICUT RESIDENTS:
THE SECURITIES REFERRED TO IN THIS MEMORANDUM WILL BE SOLD PURSUANT TO
THE EXEMPTION SET OUT IN SECTION 36-490(B)(9) OF THE CONNECTICUT UNIFORM
SECURITIES ACT. THE UNITS HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE
OF CONNECTICUT. THE UNITS CANNOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT, NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
2
CALIFORNIA RESIDENTS
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS OFFERING HAS
NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPTED FROM QUALIFICATION BY SECTION 25100,
25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS OFFERING ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATIONS BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
NEW YORK RESIDENTS:
THE OFFERING LITERATURE USED IN CONNECTION WITH THE OFFERING HAS NOT
BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
* * * * *
Each prospective investor will be afforded, and should seek, the
opportunity to obtain any additional information which such prospective investor
may reasonably request, to ask questions of, and to receive answers from, the
Company or any other person authorized by the Company to act, concerning the
terms and conditions of the Offering, the information set forth herein and any
additional information which such prospective investor believes is necessary to
evaluate the merits of the Offering, as well as to obtain additional information
necessary to verify the accuracy of information set forth herein or provided in
response to such prospective investor's inquiries. Any prospective investor
having any questions or desiring additional information should contact:
Drury J. Gallagher, Chairman and Chief Executive Officer
104 Field Point Road
Greenwich, Connecticut 06830
(203) 422-2300
3
TABLE OF CONTENTS
CAPTION PAGE
Terms of the Offering .........................................................5
Form 10-K filed by the Company for the year ended December 31, 2005 and
Form 10-Q filed by the Company for the quarter ended March 31, 2005, included
with separate transmittal letter to prospective investor.
Subscription Agreement ...............................................Appendix A
Accredited Investor Suitability Questionnaire.........................Appendix B
Registration Rights Agreement ........................................Appendix C
Warrant Agreement.....................................................Appendix D
4
TERMS OF
THE OFFERING
Business The Company is presently engaged in developing and acquiring interests
in gold and other mineral-bearing properties in Armenia and Chile. The
Company is currently in the development stage and has not received any
revenues from mining activity. The Company previously engaged in
developing a gold mining project in Armenia under a joint venture with
the Armenian state gold enterprise and sold its interest in the joint
venture to a third party.
Securities
Offered (a) The Company is offering to sell a maximum of 4,000,000
shares, of its common stock at a purchase price of $0.75 per
share, with a minimum purchase of 50,000 shares, for the
purchase price of $37,500 payable in cash upon subscription.
In addition, for each share purchased, the Company shall
grant a warrant to purchase an additional one half of one
share on or before July 31, 2007 at the purchase price of
$1.50 per share (or $0.75 per half of one share).
(b) The Company reserves the right to sell less than a minimum
of 50,000 shares to any investor.
Common Stock
Outstanding 13,461,301 shares as of May 31, 2005(1)
Prior to Offering Up to 17,461,301 shares as of the close of the Offering and
After Offering up to 19,461,301 if all of the warrants are exercised(1)
Use of Proceeds For drilling and further exploration purposes in Chile and
Armenia, due diligence and planned property acquisition
purposes, as well as general corporate and working capital
purposes.
_______________
(1)Excluding all shares of common stock issuable pursuant to options or warrants
to purchase common stock which totaled 3,480,000 shares as of May 31, 2005.
5
Terms of the Offering proceeds will be deposited and held in a
Offering non-interest bearing segregated account at J.P. Morgan Chase
Bank and may be withdrawn by the Company upon the closing of
the Offering or any tranches thereof.
Who May Invest The shares of common stock of the Company are
being offered pursuant to this Memorandum solely to persons
who are "accredited investors" as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.
See the Accredited Investor Suitability Questionnaire
attached hereto as Appendix B.
Risk Factors The shares of common stock of the Company offered
hereby involve a high degree of risk, including, without
limitation, the following:
(i) the Company is a development stage company and has not
generated any mining revenues to date but has developed
and sold an interest in an Armenian gold mining joint
venture;
(ii) the Company has acquired Chilean mineral-bearing
properties and licenses for the Hankavan and Marjan
properties in Armenia and while it is in negotiations
for additional acquisitions it has not closed them;
(iii) the Company may not be able to obtain adequate
insurance protection for its potential investments in
the mining projects;
(iv) the prices of gold and other minerals historically
fluctuate and are affected by numerous factors beyond
the Company's control and no assurance can be given
that any reserves proved or estimated will actually be
produced;
(v) the Company's proposed mining operations will be
subject to a variety of potential engineering, seismic
and other risks, some of which cannot be predicted and
which may not be covered by insurance;
6
(vi) the Company will be subject to intense competition in
its proposed mining activity and many mining companies
have substantially greater resources than those
possessed by the Company;
(vii) the shares of common stock are subject to restrictions
on transfer;
(viii) the SEC in any future review of the Company's filings
of any kind with it may question the classification of
the Company for federal securities law purposes
(although it has not done to date), which could
adversely affect the future operations of the Company
or the public trading of its shares of common stock;
(ix) an investor may lose his entire investment in the
shares of common stock;
(x) the Company's Chairman, President, and one of its
directors own approximately 41% of the shares of the
Company's common stock and, if they act jointly with
the shareholders associated with Firebird Management,
LLC which own approximately 29% of the shares of the
Company's common stock, will be able to effectively
determine the vote on any matter being voted on by the
Company's stockholders; and
(xi) the value of the Company's assets may be adversely
affected by political, economic and other factors in
Armenia or Chile.
Restrictions on The investors who purchase any shares of common stock
Resale; pursuant to the Offering will be restricted from selling,
Registration Rights transferring, pledging or otherwise disposing of any shares
due to restrictions under applicable Federal and state
securities law. The Company has agreed to give each investor
piggyback registration rights with respect to the shares of
common stock issuable pursuant to the Offering. See the
Registration Rights Agreement and the Subscription Agreement
attached hereto.
7
Listing The Company's shares of common stock are currently not
listed for trading on any stock exchange. The Company's
shares are publicly trading on the OTCBB, over-the-counter
market in the United States (the application for such
trading was approved by the National Association of
Securities Dealers, Inc. and the Company's common stock
became eligible for trading on the OTCBB on March 31, 2004).
How to Invest Each investor must:
(a) execute and deliver the Subscription Agreement attached
hereto as Appendix A, and pay the subscription price
for the shares of common stock as provided therein;
(b) execute and deliver the Accredited Investor Suitability
Questionnaire attached hereto as Appendix B;
(c) execute and deliver the Registration Rights Agreement
attached hereto as Appendix C;
(d) execute and deliver the Warrant Agreement attached
hereto as Appendix D; and
(e) send or deliver all of the signed documents to the
Company.
All references contained in this description of "The Terms of Offering" are
qualified in their entirety by reference to the specific agreements containing
the applicable terms.
8
APPENDIX A
SUBSCRIPTION AGREEMENT
Global Gold Corporation
104 Field Point Road
Greenwich, Connecticut 06830
Gentlemen:
This Subscription Agreement (the "Agreement") has been executed by the
undersigned in connection with the offer by Global Gold Corporation, a Delaware
corporation (the "Company") to sell (the "Offering) up to a maximum of 4,000,000
shares, of its common stock, $.001 par value per share, with a minimum purchase
of 50,000 shares of common stock (unless otherwise permitted by the Company),
with the purchase price for such shares payable in cash upon subscription and
the purchase of each share also entitling the purchaser to a warrant for the
purchase on or before July 31, 2006 of an additional one-half of one share at
the purchase price of $1.50 per share (or $0.75 per half of one share). The
shares of common stock of the Company (the "Units" or the "Securities") are
being offered pursuant to the Company's Confidential Private Placement
Memorandum dated June 20, 2005, as may be amended from time to time (the
"Memorandum"). The Offering is intended to come within the provision of
Regulation D under the Securities Act of 1933, as amended (the "Act").
The undersigned and the Company hereby agree as follows:
1. Subscription.
(a) Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for the number of Units at the
aggregate purchase price set forth at the end hereof at the rate of $0.75 per
share (the "Purchase Price"). In connection therewith, the undersigned hereby
tenders:
(i) the Purchase Price in cash or by check
(subject to collection), bank draft or postal or
express money order payable in United States
dollars, or by wire transfer, to "Global Gold
Corporation - Special Account"
(ii) an executed copy of this Agreement;
(iii) an executed copy of the Accredited
Investor Suitability Questionnaire; and
(iv) an executed copy of the Registration Rights
Agreement.
1
(b) The Purchase Price will be deposited by the Company in a
non-interest-bearing segregated bank account at J.P. Morgan Chase Bank or
another bank selected by the Company in its sole discretion. The Purchase Price
will be available for the Company's sole use immediately upon its acceptance of
the Agreement and the closing of the Offering or any tranche thereof.
2. The Company represents and warrants to the undersigned that since
March 31, 2005, there has been no material adverse change in the financial
condition, results of operations or general affairs of the Company, other than
as disclosed in the Memorandum, the periodic reports filed by the Company with
the Securities and Exchange Commission, and press releases, issued by the
Company.
3. The undersigned represents and warrants to the Company that:
(a) The undersigned has received a copy of the Memorandum,
and has carefully read and fully understands the Memorandum, including the Risk
Factors set forth therein and any additional risk factors reflected in any
annual, quarterly and other reports filed by the Company with the Securities and
Exchange Commission or press releases;
(b) THE UNDERSIGNED UNDERSTANDS THAT THIS INVESTMENT IN
COMPANY IS ILLIQUID AND INVOLVES A HIGH DEGREE OF RISK AND IS ONLY SUITABLE FOR
AN INVESTOR WHO CAN AFFORD TO LOSE HIS ENTIRE INVESTMENT IN THE SECURITIES;
(c) The undersigned understands that the Securities offered
herein have not been registered under the Act or the securities laws of any
state of the United States and will be subject to substantial restrictions on
transferability unless and until the Securities are registered or an exemption
from registration becomes available;
(d) The undersigned understands that an appropriate stop
transfer order will be placed on the books of the Company's transfer agent
respecting the certificates evidencing the Securities and such certificates
shall bear such legend until such time as the respective securities in question
shall have been registered under the act or shall have been transferred in
accordance with an opinion of counsel acceptable to counsel for the Company that
such registration is not required;
(e) The undersigned's decision to purchase the Securities is
based solely on the information contained in the Memorandum;
(f) The residence of the undersigned set forth below is the
true and correct residence of the undersigned;
2
(g) The undersigned has read and understands the Memorandum;
(h) The undersigned meets the suitability standards set forth
in the Memorandum under "Who May Invest" and specifically satisfies the
definition of an "accredited investor" or as otherwise set forth therein;
(i) The Accredited Investor Suitability Questionnaire executed
and delivered by the undersigned is true and complete in all respects;
(j) The undersigned (A) has been given the opportunity to ask
questions of, and receive answers from, the Company concerning the terms and
conditions of the Offering and other matters pertaining to this investment, and
all such questions have been answered to the satisfaction of the undersigned;
(B) has been given the opportunity to obtain such additional information
necessary to verify the accuracy of the information contained in the Memorandum
or that which has been otherwise provided in order for him to evaluate the
merits and risks of investment in the Securities; and (C) has been given the
opportunity to obtain additional information from the Company, in each case
except to the extent the Company has informed the undersigned that it does not
possess such information and cannot acquire it without unreasonable effort to
expense, or that the requested information is proprietary and confidential, and
the undersigned has not been furnished with any other offering literature or
prospectus except as referred to herein in the Memorandum;
(k) The undersigned has not been furnished with any oral
representation, warranty or information in connection with the Offering by the
Company or any officer, director, employee, agent, affiliate or subsidiary or
counsel or other advisor of any of them; and
(l) The undersigned is purchasing the Securities for his own
account for investment purposes only and not with a view to the sale or other
distribution thereof, and that the undersigned presently has no intention of
offering, selling, transferring, pledging, hypothecating, or otherwise disposing
of all or any part of the Securities at any particular time, for any particular
price, or upon the happening of any particular event or circumstances.
4. The undersigned understands and agrees that this subscription is
subject to the following terms and conditions:
(a) This subscription is irrevocable and the execution and
delivery of this Agreement will not constitute an agreement between the
undersigned and the Company until this Agreement has been accepted by the
Company;
(b) The Company can, in its sole discretion, reject a
subscription as soon as practicable after receipt of the undersigned's
subscription. The undersigned will be promptly notified by the Company as to
whether his subscription has been accepted. If the undersigned's subscription is
not accepted, his check will be returned promptly and all of his obligations
hereunder shall terminate; and
3
(c) This subscription is not transferable or assignable,
either before or after acceptance hereof by the Company, and the Securities
issuable on account of this subscription will only be issued in the name of, and
delivered to, the undersigned.
5. If the undersigned is a corporation, partnership, limited liability
company, estate or trust, the undersigned represents and warrants that:
(a) The undersigned has been duly formed and is validly
existing in good standing under the laws of the jurisdiction of its formation
with full power and authority to enter into the transactions contemplated by
this Agreement;
(b) This Agreement has been duly and validly authorized,
executed and delivered, and, when executed and delivered by the entity, will
constitute the valid, binding and enforceable agreement of the undersigned;
(c) The person signing this Agreement and any other instrument
delivered on behalf of such entity has been duly authorized by such entity and
has full power and authority to do so; and
(d) Such entity has not been formed for the specific purposes
of acquiring the Securities.
6. The representations, warranties and agreements made by the
undersigned and the Company herein have been made with the intent that they be
relied upon by the other party for purposes of the Offering. Both parties
further undertake to notify the other party immediately of any change in any
information supplied by either party. If more than one person is signing this
Agreement, each representation, warranty and agreement shall be a joint and
several representation, warranty and agreement of each such subscriber.
7. The undersigned unconditionally agrees to indemnify and hold the
Company, its officers, directors and shareholders or any other person who may be
deemed to control the Company, and any of their counsel, advisors and
accountants, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the undersigned's, or his attorney's or
agent's representations, warranties or statements or the breach of any of the
agreements contained herein.
8. This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of law principles. All parties hereto (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in the City of
New York in the State of New York (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the exclusive jurisdiction of any
federal or state court in the City of New York in the State of New York in any
such suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this
Agreement. All parties hereto agree that the mailing of any process in any suit,
action or proceeding in accordance with the addresses reflected in this
Agreement shall constitute personal service thereof.
4
Dated: _______________, 2005
Number of Shares Subscribed at $0.75 per share: ________ Share [s]
Total Purchase Price: $_____________
Payment Enclosed: $_____________
ENTITY SUBSCRIBERS SIGN HERE: INDIVIDUAL SUBSCRIBERS SIGN HERE:
________________________________ __________________________________
Print Name of Subscriber Print Name of Subscriber
By:_____________________________ __________________________________
Signature
________________________________ __________________________________
Print Name and Title of Person Signing Signature of Joint Subscriber, if any
Mailing Address: Mailing Address:
_______________________________ __________________________________
Street Address Street Address
_______________________________ __________________________________
City, State and Zip Code City, State and Zip Code
_______________________________ __________________________________
Taxpayer Identification Number Social Security Number of Subscriber
_________________________________ ___________________________________
Country of incorporation Social Security Number of
Joint Subscriber
____________________________________
Passport number
(Check One)
__________ Individual
5
__________ Tenants-in-common
__________ Joint tenants with right of survivorship (each must sign)
__________ Community property.(0)
__________ Partnership
__________ Corporation
__________ Limited Liability Company
__________ As custodian, trustee or agent for ___________________________
This Subscription Agreement is
accepted by Global Gold Corporation
this ____ day of ___________, 2005
By: _____________________________________
Drury J. Gallagher, Chairman
and Chief Executive Officer
________________________
(0) * If the investor is a resident of a community property state, the
subscription should indicate whether the Securities will be owned as separate or
community property and will be registered jointly in the name of more than one
person, and the nature of the joint ownership should be indicated (i.e., tenants
in common, joint tenants with right of survivorship, tenants by the entirety, or
other designation as may be permitted by the law of the state of the investor's
domicile).
6
APPENDIX C
REGISTRATION RIGHTS AGREEMENT
OF
GLOBAL GOLD CORPORATION
Agreement made as of the 29th day of July, 2005 by and among
Global Gold Corporation, a Delaware corporation currently having its office and
principal place of business at 104 Field Point Road, Greenwich, Connecticut
06830 (the "Corporation"), and each party purchasing shares of the common stock
of the Corporation pursuant to the Memorandum (as defined below) (each of the
last named persons shall hereinafter be referred to individually as a
"Shareholder" and collectively as the "Shareholders").
WHEREAS, upon the closing of the offering of up to a maximum
of 4,000,000 shares, of common stock of the Corporation with the purchaser of
each share also entitled to a warrant to purchase one half of one additional
share pursuant to the Confidential Private Placement Memorandum dated June 20,
2005, as may be amended from time to time (the "Offering") (each individual
closing of which shall be referred to as the "Effective Date"), as defined in
the Offering, the Shareholders will collectively own up to a maximum of
4,000,000 shares (and if all of the warrants are exercised a total of 6,000,000
shares) of common stock, $.001 par value per share, of the Corporation (shares
of such common stock acquired pursuant to the Offering being referred to as the
"Shares" and collectively as the "Stock");
WHEREAS, upon the Effective Date, the Corporation and the
Shareholder desire to provide for certain registration rights for the Stock of
the Corporation or any interest therein now or hereafter acquired by the
Shareholders pursuant to the Offering;
1
NOW, THEREFORE, effective upon the Effective Date, in
consideration of the mutual covenants and conditions herein contained, each of
the parties hereby agrees as follows:
1. Piggyback Registration Rights.
1.1 (a) If the Corporation shall propose to file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), at any time during the 24-month period after the Effective
Date, either on its own behalf or that of any of its shareholders for an
offering of shares of the capital stock of the Corporation for cash or
securities, the Corporation shall give written notice as promptly as possible of
such proposed registration to each Shareholder and shall use reasonable efforts
to include all of the shares of the Stock owned by the Shareholders ( the
"Seller" or "Registering Shareholder" and collectively the "Sellers" and
"Registering Shareholders") in such registration statements as such Seller shall
request within 10 days after receipt of such notice from the Corporation,
provided, that (A) if shares of the Stock are being offered by the Corporation
in an underwritten offering, any shares of the Stock proposed to be included in
the registration statement on behalf of the Seller shall be included in the
underwriting offering on the same terms and conditions as the stock being
offered by the Corporation, and (B) the Seller shall be entitled to include such
number of shares of the Stock owned by the Seller in such registration
statement, one time only during the applicable period set forth herein, so that
the proportion of shares of the Stock of each Seller to be included in such
registration statement to the total number of shares of the Stock owned by him
is equal to the proportion that the number of shares of the Stock of all Sellers
to be included in such registration statement bears to the total number of
shares of the Stock owned by all Sellers (except that each Seller shall have the
right to not exercise such piggyback registration right set forth herein once,
in which case such Seller shall have the right set forth in this Section 1.1
with respect to the next succeeding registration statement described in this
Section 1.1 proposed to be filed by the Corporation during such 36-month
period); and provided further, that (i) the Corporation shall not be required to
include such number or amount of shares owned by the Sellers in any such
registration statement if it relates solely to securities of the Corporation to
be issued pursuant to a stock option or other employee benefit plan, (ii) the
Corporation may, as to an offering of securities of the Corporation by the
Corporation, withdraw such registration statement at its sole discretion and
without the consent of the Sellers and abandon such proposed offering and (iii)
the Corporation shall not be required to include such number of shares of the
Stock owned by the Sellers in such registration statement if the Corporation is
advised in writing by its underwriter or investment banking firm that it
reasonably believes that the inclusion of the Sellers' shares would have an
adverse effect on the offering.
2
(b) A registration filed pursuant to this Section
1.1(a) shall not be deemed to have been effected unless the registration
statement related thereto (i) has become effective under the Securities Act and
(ii) has remained effective for a period of at least nine months (or such
shorter period of time in which all of the Stock registered thereunder has
actually been sold thereunder); provided, however, that if, after any
registration statement filed pursuant to Section 1.1(a) becomes effective and
prior to the time the registration statement has been effective for a period of
at least nine months, such registration statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court solely due to actions or omissions to act of the
Corporation , such registration statement shall not be considered one of the
registrations applicable pursuant to Section 1.1(a).
1.2 Delay or Suspension of Registration.
Notwithstanding any other provision of this Section 1 to the contrary, if the
Corporation shall furnish to the Shareholders:
(a) a certificate signed by the President of the Corporation
stating that, in the good faith judgment of a majority of the members of the
entire Board of Directors of the Corporation, it would adversely and materially
affect the Corporation's ability to enter into an agreement with respect to, or
to consummate, a bona fide material transaction to which it is or would be a
party, or it would potentially adversely and materially affect the Corporation's
classification for federal securities law purposes, or the Corporation has a
plan to register stock to be sold for its own account within a 90-day period
after the filing of the registration statement under Section 1.1(a), for the
Corporation to use its reasonable best efforts to effect the registration of the
stock; or
(b) both (A) a certificate signed by the President of the
Corporation stating that, in the good faith judgment of a majority of the
members of the entire Board of Directors of the Corporation, a material fact
exists which the Corporation has a bona fide business purpose for preserving as
confidential and (B) an opinion of counsel to the Corporation to the effect that
the registration by the Corporation or the offer or sale by the Shareholders of
the Stock pursuant to an effective registration statement would require
disclosure of the material fact which is referenced in the President's
certificate required under Section 1.2(b)(ii)(A) and which, in such counsel's
opinion, is not otherwise required to be disclosed, then the Corporation's
obligations pursuant to Section 1.1(a) with respect to any such filing of a
registration statement shall be deferred or offers and sales of the Stock by the
Shareholders shall be suspended, as the case may be, until the earliest of: (1)
the date on which, as applicable (a) the Corporation's use of reasonable best
efforts to effect the registration of the Stock would no longer have such a
material adverse effect or (b) the material fact is disclosed to the public or
ceases to be material; (2) 135 days from the date of receipt by the Shareholders
of the materials referred to in Section 1.2(b) (i) and (ii) above; and (3) such
time as the Corporation notifies the Shareholders that it has resumed use of its
reasonable best efforts to effect registration of the Stock or that offers and
sales of the Stock pursuant to an effective registration statement may be
resumed, as the case may be. If the Shareholders receive the materials referred
to in Section 1.2(b)(ii) above while a registration statement for the offer and
sale of the Stock is in effect, each Shareholder agree to terminate immediately
any offer or sale of the Stock. A particular material transaction to which the
Corporation is or would be a party or a particular material fact shall not give
rise to more than one deferral or suspension notice by the Corporation pursuant
to the provisions of this Section 1.2.
3
1.3 In connection with any registration
or qualification pursuant to the provisions of this Section 1, the Corporation
shall, except as prohibited under the blue sky or securities laws of any
jurisdiction under which a registration or qualification is being effected, pay
all filing, registration and qualification fees of the Securities and Exchange
Commission, printing expenses, fees and disbursements of legal counsel and all
accounting expenses, except that each Seller shall bear the fees and expenses of
its own legal counsel, and the underwriting or brokerage discounts and
commissions, expenses of its brokers or underwriters and fees of the National
Association of Securities Dealers, Inc. attributable to its Stock; provided,
however, that the Corporation shall not be required in the case of any
registration hereunder to make blue sky filings in more than 5 states.
1.4 (a) In each case of registration
of shares of Stock under the Securities Act pursuant to these registration
provisions, the Corporation shall unconditionally indemnify and hold harmless
each Seller, each underwriter (as defined in the Securities Act), and each
person who controls any such underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Securities Exchange Act of 1934 (the
Sellers and each such underwriter, and each such person who controls any such
underwriter being referred to for purposes of this Section 1.4, as an
"Indemnified Person") from and against any and all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement under which such shares of the Stock were registered under the
Securities Act, any prospectus or preliminary prospectus contained therein or
any amendment or supplement thereto (including, in each case, any documents
incorporated by reference therein), or arising out of any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Seller or any underwriter and furnished to the
Corporation or the Shareholders, as the case may be, in writing by any Seller or
such underwriter expressly for use therein; provided that the foregoing
indemnification with respect to a preliminary prospectus shall not inure to the
benefit of any underwriter (or to the benefit of any person controlling such
underwriter) from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased shares of the Stock to the extent such losses,
claims, damages or liabilities result from the fact that a copy of the final
prospectus had not been sent or given to such person at or prior to written
confirmation of the sale of such shares to such person.
4
(b) In each case of a registration of shares
of the Stock under the Securities Act pursuant to these registration provisions,
each Seller participating in the registration shall unconditionally indemnify
and hold harmless the Corporation (and its directors and officers), each
underwriter and each person, if any, who controls the Corporation or such
underwriter within the meaning of Section 15 of the Securities Act of Section
20(a) of the Securities Exchange Act of 1934, to the same extent as the
foregoing indemnity from the Corporation to the Seller but only with reference
to information relating to such Seller and furnished to the Corporation by such
Seller for use in the registration statement, any prospectus or preliminary
prospectus contained therein or any amendment or supplement thereto. Each Seller
will use all reasonable efforts to cause any underwriters of shares of Stock to
be sold by the Seller to indemnify the Corporation on the same terms as any
Seller agrees to indemnify the Corporation, but only with reference to
information furnished in writing by such underwriter for use in the registration
statement.
(c) In case any action or proceeding shall
be brought against or instituted which involves any Indemnified Person, such
Indemnified Person shall promptly notify the person against whom such indemnity
may be sought (the "Indemnifying Person") in writing and the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such action or proceeding, any
Indemnified Person shall have the right to obtain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person has agreed to the retention of such counsel
at its expense or (ii) the named parties to any such action or proceeding
include both the Indemnifying Person and the Indemnified Person, and the
Indemnified Person has been advised by counsel that there may be one or more
defenses available to such Indemnified Person which are different from or
additional to those available to the Indemnifying Person (in which case, if the
Indemnified Person notifies the Indemnifying Person that it wishes to employ
separate counsel at the expense of the Indemnifying Person, the Indemnifying
Person shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnified Person). It is understood that the
Indemnifying Person shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all such similarly situated
Indemnified Persons. The Indemnifying Person shall not be liable for any
settlement of any action or proceeding effected without its written consent.
(d) Notwithstanding anything in this
Agreement to the contrary, the Corporation shall not be liable to any Seller for
any losses, claims, damages or liabilities arising out of or caused by (A) any
reasonable delay (1) in filing or processing any registration statement or any
preliminary or final prospectus, amendment or supplement thereto after the
inclusion of the Sellers' Stock in such registration statement, or (2) in
requesting such registration statement be declared effective by the Commission
and (B) the failure of the Commission for any reason to declare effective any
registration statement.
5
2. MISCELLANEOUS.
2.1. Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by facsimile
or (b) three days after mailing if mailed from within the continental United
States by registered or certified mail, return receipt requested to the party
entitled to receive the same, if to the Corporation, Global Gold Corporation,
104 Field Point Road, Greenwich, Connecticut 06830, with a copy to Patterson,
Belknap, Webb and Tyler, 1133 Avenue of the Americas 10036 Attn: John E.
Schmeltzer, Esq.; and if to any Shareholder, at his or its address as set forth
in the books and records of the Corporation. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
2.2 Governing Law. This Agreement and the rights
of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflicts of law
principles. All parties hereto (i) agree that any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted only
in a federal or state court in the City of New York in the State of New York
(ii) waive any objection which they may now or hereafter have to the laying of
the venue of any such suit, action or proceeding, and (iii) irrevocably submit
to the jurisdiction of any federal or state court in the City of New York in the
State of New York in any such suit, action or proceeding, but such consent shall
not constitute a general appearance or be available to any other person who is
not a party to this Agreement. All parties hereto agree that the mailing of any
process in any suit, action or proceeding in accordance with the notice
provisions of this Agreement shall constitute personal service thereof.
2.3 Entire Agreement; Waiver of Breach. This
Agreement constitutes the entire agreement among the parties and supersedes any
prior agreement or understanding among them with respect to the subject matter
hereof, and it may not be modified or amended in any manner other than as
provided herein; and no waiver of any breach or condition of this Agreement
shall be deemed to have occurred unless such waiver is in writing, signed by the
party against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of any subsequent breach or condition of a like or different nature.
6
2.4 Binding Effect; Assignability. This
Agreement and all the terms and provisions hereof shall be binding upon and
shall inure to the benefit of the parties and their respective heirs, successors
and permitted assigns. This Agreement and the rights of the parties hereunder
shall not be assigned except with the written consent of all parties hereto.
2.5 Captions. Captions contained in this
Agreement are inserted only as a matter of convenience and in no way define,
limit or extend the scope or intent of this Agreement or any provision hereof.
2.6 Number and Gender. Wherever from the
context it appears appropriate, each term stated in either the singular or the
plural shall include the singular and the plural, and pronouns stated in either
the masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
2.7 Severability. If any provision of this
Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render invalid or unenforceable any other severable provision of this
Agreement, and this Agreement shall be carried out as if any such invalid or
unenforceable provision were not contained herein.
2.8 Amendments. This Agreement may not be
amended except in a writing signed by all of the parties hereto.
2.9 Compliance with Securities Laws. Commencing
with the Effective Date, the Corporation will use its best efforts to comply
thereafter with the applicable provisions of the Securities Act and the
Securities Exchange Act of 1934.
2.10 Counterparts. This Agreement may be
executed in several counterparts, each of which shall be deemed an original but
all of which shall constitute one and the same instrument. In addition, this
Agreement may contain more than one counterpart of the signature page and this
Agreement may be executed by the affixing of such signature pages executed by
the parties to one copy of the Agreement; all of such counterpart signature
pages shall be read as though one, and they shall have the same force and effect
as though all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first above written.
GLOBAL GOLD CORPORATION
By: __________________________________
Drury J. Gallagher, Chairman
and Chief Executive Officer
No. of Shares
Purchased SHAREHOLDER
___________________________________
___________________________________
By:________________________________
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APPENDIX D
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK ISSUABLE UPON
ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE OR TRANSFER
THEREOF MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
No.U-4 Right to Purchase Shares of
Common Stock of Global Gold Corporation
Global Gold Corporation
Common Stock Purchase Warrant
Global Gold Corporation a Delaware corporation (the "Company"), hereby
certifies that, for value received, ______________________, a
_____________________ corporation with offices at
_________________________________(" "), or registered permitted assigns, is
entitled, subject to the terms set forth below, to purchase from the Company at
any time or from time to time before 5:30 P.M., Eastern Standard Time, on July
31, 2006, _______________________( ) fully paid and nonassessable shares of
Common Stock, $.001 par value, of the Company, at a purchase price per share of
One Dollar Fifty Cents($1.50) (such purchase price per share as adjusted from
time to time as herein provided is referred to herein as the "Purchase Price").
The number and character of such shares of Common Stock and the Purchase Price
are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Global Gold Corporation and
any corporation which shall succeed or assume the obligations
of the Company hereunder.
(b) The term "Common Stock" includes the Company's Common Stock,
$.01 par value per share, as authorized on the date of the
Agreement and any other securities into which or for which any
of such Common Stock may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
1
1. Exercise of Warrant.
1.1. Manner of Exercise: Payment of the Purchase Price.
(a) This Warrant may be exercised by the holder hereof, in
whole or in part, at any time or from time to time prior to the expiration date,
by surrendering to the Company at its principal office this Warrant, with the
form of Election to Purchase Shares attached hereto (or a reasonable facsimile
thereof) duly executed by the holder and accompanied by payment of the purchase
price for the number of shares of Common Stock specified in such form.
(b) Payment of the purchase price may be made as follows (or
by any combination of the following): in United States currency by cash or
delivery of a certified check or bank draft payable to the order of the Company
or by wire transfer to the Company.
1.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to, and the
purchase price shall have been received by, the Company as provided in Section
1.1, and at such time the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such exercise and shall be deemed to have become the holder or holders of record
thereof for all purposes.
1.3. Trustee for Warrantholders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. Delivery of Stock Certificates. etc. on Exercise. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
30 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which such holder shall be entitled on such exercise,
plus, in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then current market
value of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
2
3. Adjustment for Dividends in Other Stock, Property, etc.; Reclassification,
etc. In case at any time or from time to time, the holders of Common Stock shall
have received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or
similar corporate rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrants after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust company having
its principal office in New York, New York, as trustee for the holder or holders
of the Warrants.
3
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Adjustment for Issue or Sale of Common Stock
at Less than the Purchase Price in Effect.
5.1 General. If the Company shall, at any time or from time to time,
issue any additional shares of Common Stock (other than shares of Common Stock
excepted from the provisions of this Section 5 by Section 5.4) without
consideration or for a Net Consideration Per Share less than the Purchase Price
in effect immediately prior to such issuance, then, and in each such case:
(a) the Purchase Price shall be lowered to an amount
determined by multiplying such Purchase Price then in effect by a fraction:
(1) the numerator of which shall be (a) the number of
shares of Common Stock
outstanding (excluding treasury shares, but including for this purpose shares of
Common Stock issuable upon the exercise of any warrants) immediately prior to
the issuance of such additional shares of Common Stock, plus (b) the number of
shares of Common Stock which the net aggregate consideration, if any, received
by the Company for the total number of such additional shares of Common Stock so
issued would purchase at the Purchase Price in effect immediately prior to such
issuance, and
(2) the denominator of which shall be (a) the number
of shares of Common Stock
outstanding (excluding treasury shares, but including for this purpose shares of
Common Stock issuable upon the exercise of the any warrants) immediately prior
to the issuance of such additional shares of Common Stock, plus (b) the number
of such additional shares of Common Stock so issued; and
(b) the holder of this Warrant shall thereafter, on the
exercise hereof as provided in Section 1, be entitled to receive the number of
shares of Common Stock determined by multiplying the number of shares of Common
Stock which would otherwise (but for the provisions of this Section 5. 1) be
issuable on such exercise by the fraction of which (i) the numerator is the
Purchase Price which would otherwise (but for the provisions of this Section 5.
1) be in effect, and (ii) the denominator is the Purchase Price in effect on the
date of such exercise.
4
5.2 Definitions, etc. For purposes of this Section 5 and Section 7:
The issuance of any warrants, options or other subscription or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock (or the issuance of
any warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance at such time of such Common
Stock if the Net Consideration Per Share which may be received by the Company
for such Common Stock (as hereinafter determined) shall be less than the
Purchase Price at the time of such issuance and, except as hereinafter provided,
an adjustment in the Purchase Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made upon each such issuance in
the manner provided in Section 5. 1. Any obligation, agreement or undertaking to
issue warrants, options, or other subscription or purchase rights at any time in
the future shall be deemed to be an issuance at the time such obligation,
agreement or undertaking is made or arises. No adjustment of the Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made under Section 5.1 upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible securities if any adjustment shall previously
have been made upon the issuance of any such warrants, options or other rights
or upon the issuance of any convertible securities (or upon the issuance of any
warrants, options or any rights therefor) as above provided. Any adjustment of
the Purchase Price and the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to this Section 5.2 which relates to
warrants, options or other subscription or purchase rights with respect to
shares of Common Stock shall be disregarded if, as, and to the extent that such
warrants, options or other subscription or purchase rights expire or are
canceled without being exercised, so that the Purchase Price effective
immediately upon such cancellation or expiration shall be equal to the Purchase
Price that otherwise would have been in effect at the time of the issuance of
the expired or canceled warrants, options or other subscriptions or purchase
rights, with such additional adjustments as would have been made to that
Purchase Price had the expired or cancelled warrants, options or other
subscriptions or purchase rights not been issued.
For purposes of this Section 5.2, the "Net Consideration Per Share"
which may be received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount
equal to the total amount of consideration, if any, received by the Company for
the issuance of such warrants, options, subscriptions, or other purchase rights
or convertible or exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that would be
issued if all such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities were exercised, exchanged or converted.
5
(B) The "Net Consideration Per Share" which may be received by
the Company shall be determined in each instance as of the date of issuance of
warrants, options, subscriptions or other purchase rights, or convertible or
exchangeable securities without giving effect to any possible future price
adjustments or rate adjustments which may be applicable with respect to such
warrants, options, subscriptions or other purchase rights or convertible
securities.
For purposes of this Section 5, if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in this Section 5
consists of property other than cash, such consideration shall be deemed to have
the same value as shall be determined in good faith by the Board of Directors of
the Company.
This Section 5.2 shall not apply under any of the circumstances
described in Section 5.4.
5.3. Extraordinary Events. In the event that the Company shall (i)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 5.3. The
holder of this Warrant shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5.3) be issuable on such
exercise by a fraction of which (i) the numerator is the Purchase Price which
would otherwise (but for the provisions of this Section 5.3) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5.4. Excluded Shares. Section 5. 1 shall not apply to the (i) issuance
of shares of Common Stock, or options therefor, to directors, officers,
employees, advisors and consultants of the Company pursuant to any stock option,
stock purchase, stock ownership or compensation plan approved by the
compensation committee of the Company's Board of Directors, (ii) the issuance of
shares pursuant to the exercise of the warrants issued by the Company dated
October 31, 2000, and (iii) the issuance of any shares pursuant to the exercise
of the warrants issued by the Company dated November 4, 2004.
6
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Treasurer or Chief
Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants selected by the Company to compute such adjustment
or readjustment in accordance with the terms of the Warrants and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such issue or sale and as adjusted and readjusted as provided in this Warrant.
The Company will forthwith mail a copy of each such certificate to each holder
of a Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of
any class or securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
7
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares
of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issue of Common Stock on the exercise of
any warrants), then and in each such event the Company will mail or cause to be
mailed to each registered holder of a Warrant a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed at
least 20 days prior to the date specified in such notice on which any such
action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrants, all shares of Common Stock from time to time
issuable on the exercise of the Warrants represented by this certificate.
10. Exchange of Warrants. On surrender for exchange of any Warrant, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant or warrants of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, calling
in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction of any Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of such warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
8
12. Warrant Agent. The Company hereby appoints American Registrar and Transfer
Company, with offices in Salt Lake City, Utah, as its agent for the purpose of
issuing Common Stock on the exercise of the Warrants pursuant to Section 1,
exchanging Warrants pursuant to Section 10, and replacing Warrants pursuant to
Section 11, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
The Company may change such agent and designate a new agent in the United States
for the above-described purposes by written notice to each holder of a Warrant.
13. Remedies. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that a holder of this Warrant may suffer
irreparable harm and that such terms may be specifically enforced by a decree by
a court of competent jurisdiction for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability. This Warrant is issued upon the following terms, to all of
which each holder or owner hereof by the taking hereof consents and agrees:
(a) subject to compliance with all applicable securities laws, title to
this Warrant may be transferred by endorsement (by the holder hereof executing
the form of assignment at the end hereof) and delivery in the same manner as in
the case of a negotiable instrument transferable by endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
15. Notices. All notices or other communications required or permitted to be
given pursuant to this Warrant shall be in writing and shall be considered as
duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
certified mail, return receipt requested to the party entitled to receive the
same, if to the Company, Global Gold Corporation, 104 Field Point Road,
Greenwich, CT 06830, and if to the holder of a Warrant, at the address of such
holder shown on the books of the Company. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Warrant.
9
16. Governing Law. This Warrant and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of law principles. All parties hereto (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in the City of
New York in the State of New York in the United States of America (ii) waive any
objection which they may now or hereafter have to the laying of the venue of any
such suit, action or proceeding, and (iii) irrevocably submit to the
jurisdiction of such federal or state court in the City of New York in the State
of New York in any such suit, action or proceeding, but such consent shall not
constitute a general appearance or be available to any other person who is not a
party to this Warrant. All parties hereto agree that the mailing of any process
in any suit, action or proceeding in accordance with the notice provisions of
this Warrant shall constitute personal service thereof.
17. Entire Agreement; Waiver of Breach. This Warrant constitutes the entire
agreement among the parties and supersedes any prior agreement or understanding
among them with respect to the subject matter hereof, and it may not be modified
or amended in any manner other than as provided herein; and no waiver of any
breach or condition of this Warrant shall be deemed to have occurred unless such
waiver is in writing, signed by the party against whom enforcement is sought,
and no waiver shall be claimed to be a waiver of any subsequent breach or
condition of a like or different nature.
18. Severability. If any provision of this Warrant shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Warrant, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
19. Amendment. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
20. Expiration. The right to exercise this Warrant shall expire at 5:30 P.M.,
Eastern Standard Time, on July 31, 2006.
10
21. Restrictions on Transferability; Restrictive Legend. The holder acknowledges
that the shares of Common Stock issuable upon exercise of this Warrant are
subject to restrictions under applicable Federal and state securities laws. Each
certificate representing shares of Common Stock issued shall, upon the exercise
of this Warrant, bear the following legend in addition to such other restrictive
legends as may be required by law:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws, and no sale or transfer thereof may be effected without
an effective registration statement or an opinion of counsel for the holder,
satisfactory to the company, that such registration is not required under the
act and any applicable state securities laws."
Dated: June 20, 2005
Global Gold Corporation
By: ________________________________
Drury J. Gallagher, Chairman
11
[FORM OF]
ELECTION TO PURCHASE SHARES
To: Global Gold Corporation
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase ____ shares of Common Stock, par value $.01 per share ("Common Stock"),
of Global Gold Corporation and hereby makes payment of $________ therefor . The
undersigned hereby requests that certificates for such shares be issued and
delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER
TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced)
hereby is less than the number of shares of Common Stock covered by the Warrant,
the undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO:
(NAME OF HOLDER)
(ADDRESS, INCLUDING ZIP CODE)
12
DELIVER
TO:
(NAME OF HOLDER)
(ADDRESS, INCLUDING ZIP CODE)
Dated: _________________________
[NAME OF HOLDER]
By
Name:
Title:
(Signature) (Signature must
conform to name of holder
as specified on the face of
the Warrant)
(Print Name)
(Street Address)
(City, State and Zip Code)
(Person's Social Security Number
or Tax Identification Number)
13
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________________________________ the right represented by the
within Warrant to purchase shares of Common Stock of Global Gold Corporation to
which the within Warrant relates, and appoints ____________________________as
its attorney to transfer such right on the books of Global Gold Corporation with
full power of substitution in the premises.
Dated: ________________
(Signature)
(Signature must conform to name of holder as
specified on the face of the Warrant)
(Print Name)
(Street Address)
(City, State and Zip Code)
(Person's Social Security Number
or Tax Identification Number)
Signed in the presence of:
________________________
14
EX-10
7
ex1012.txt
PRIVATE PLACEMENT - APRIL 4, 2006
Exhibit 10.12
Copy #_________
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
GLOBAL GOLD CORPORATION
Global Gold Corporation, a Delaware corporation (the "Company", "we"
or "us"), is offering (the "Offering") to sell a minimum of 4,000,000 shares and
up to a maximum of 10,400,000 shares of its common stock, $.001 par value, with
a minimum purchase of 100,000 shares of common stock with the purchase price of
$1.25 per share for such shares, or $125,000 payable in cash upon subscription,
and with each three shares purchased also entitling the purchaser to a warrant
for the purchase of an additional one share at the price per share of $2.00
exercisable on or before the sooner of (a) April 1, 2008 or (b) sixty (60) days
following a determination by the Company that the weighted average trading price
of the common shares over a thirty (30) consecutive trading day period
commencing after August 1, 2006 is $3.00 USD or greater (the "Units" or the
"Securities"). The price of the shares of common stock has been determined by
the Board of Directors of the Company.
If all the Securities are sold, the Company will have issued an
additional 10,400,000 shares of its common stock for a total purchase price of
$13,000,000. Offering proceeds shall be placed in a special non-interest bearing
account, and if the minimum offering of 4,000,000 shares is not sold,
subscribers shall have the right to cancel their subscriptions and receive
repayment of funds paid without interest or deduction.
The Offering will terminate upon the earlier of the completion of the
sale of all of the Securities offered or March 31, 2006 unless the Offering is
extended up to an additional 30 days until April 30, 2006 by the Company in its
sole discretion (the "Offering Period"). The Offering may be closed from time to
time in tranches of any number of Securities (collectively the "Closings").
The common stock of the Company is publicly traded only on the OTCBB,
over-the-counter market under the symbol GBGD.
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved these securities or passed upon the accuracy or
adequacy of this Memorandum. Any representation to the contrary is a criminal
offense.
The date of this Memorandum is March 1, 2006.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" set
forth in this Memorandum, and any additional applicable risk factors reflected
in any annual, quarterly and other reports filed by the Company with the
Securities and Exchange Commission (the "SEC") (which filed documents shall be
referred to collectively as the "SEC Documents"), which are incorporated herein
by reference.
THE SECURITIES BEING OFFERED PURSUANT TO THIS MEMORANDUM HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE
BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED OR RESOLD UNLESS
THE SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE.
THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY THE SECURITIES NOR WILL THERE BE ANY SALE OF THE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL. ANY DISTRIBUTION OF THIS MEMORANDUM BY THE OFFEREE IN WHOLE OR IN
PART IS UNAUTHORIZED.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
MEMORANDUM AS LEGAL ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL AS TO
LEGAL AND RELATED MATTERS CONCERNING HIS INVESTMENT.
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM WILL BE EMPLOYED
IN THE OFFERING OF THE SECURITIES. EXCEPT FOR THIS MEMORANDUM OR STATEMENTS OR
DOCUMENTS CONTAINED HEREIN, NO PERSON HAS BEEN AUTHORIZED TO MAKE
REPRESENTATIONS, OR GIVE ANY INFORMATION, WITH RESPECT TO THE SECURITIES OFFERED
HEREBY EXCEPT THE INFORMATION CONTAINED HEREIN.
CONNECTICUT RESIDENTS:
THE SECURITIES REFERRED TO IN THIS MEMORANDUM WILL BE SOLD PURSUANT TO
THE EXEMPTION SET OUT IN SECTION 36-490(B)(9) OF THE CONNECTICUT UNIFORM
SECURITIES ACT. THE UNITS HAVE NOT BEEN REGISTERED UNDER SAID ACT IN THE STATE
OF CONNECTICUT. THE UNITS CANNOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION
WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT, NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
2
CALIFORNIA RESIDENTS
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS OFFERING HAS
NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPTED FROM QUALIFICATION BY SECTION 25100,
25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS OFFERING ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATIONS BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
NEW YORK RESIDENTS:
THE OFFERING LITERATURE USED IN CONNECTION WITH THE OFFERING HAS NOT
BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW YORK
PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
* * * * *
Each prospective investor will be afforded, and should seek, the
opportunity to obtain any additional information which such prospective investor
may reasonably request, to ask questions of, and to receive answers from, the
Company or any other person authorized by the Company to act, concerning the
terms and conditions of the Offering, the information set forth herein and any
additional information which such prospective investor believes is necessary to
evaluate the merits of the Offering, as well as to obtain additional information
necessary to verify the accuracy of information set forth herein or provided in
response to such prospective investor's inquiries. Any prospective investor
having any questions or desiring additional information should contact:
Drury J. Gallagher, Chairman and Chief Executive Officer
45 East Putnam Avenue
Greenwich, Connecticut 06830
(203) 422-2300
3
TABLE OF CONTENTS
CAPTION PAGE
Terms of the Offering .........................................................5
Form 10-K filed by the Company for the year ended December 31, 2004 and
Form 10-Q filed by the Company for the quarter ended September 30, 2005 included
with separate transmittal letter to prospective investor.
Subscription Agreement ...............................................Appendix A
Accredited Investor Suitability Questionnaire.........................Appendix B
Registration Rights Agreement ........................................Appendix C
Form of Warrant.......................................................Appendix D
4
TERMS OF
THE OFFERING
Business The Company is presently engaged in developing and acquiring
interests in gold and other mineral-bearing properties in Armenia and
Chile. The Company is currently in the development stage and has not
received any revenues from mining activity. The Company previously
engaged in developing a gold mining project in Armenia under a joint
venture with the Armenian state gold enterprise and sold its interest
in the joint venture to a third party.
Securities
Offered (a) The Company is offering to sell a minimum of 4,000,000 and a max
of 10,400,000 shares, of its common stock at a purchase price of
$1.25 per share, with a minimum purchase of 100,000 shares, for
the purchase price of $125,000 payable in cash upon subscription.
Each three shares purchased shall also entitle the purchaser to a
warrant for the purchase of an additional one share at the price
per share of $2.00 exercisable on or before the sooner of (a)
April 1, 2008 or (b) sixty (60) days following a determination by
the Company that the weighted average trading price of the common
shares over a thirty (30) consecutive trading day period
commencing after August 1, 2006 is $3.00 USD or greater.
(b) The Company reserves the right to sell less than a
minimum of 100,000 shares to any investor.
Common Stock
Outstanding
Prior to
Offering
After Offering 18,270,301 shares as of February 28, 2006(1)
Up to 28,670,301 shares as of the close of the Offering and up to
32,136,968 if all of the warrants and options are exercised (1)
Use of
Proceeds For mining property acquisition and development purposes in
Chile and Armenia, drilling and further exploration, plant and
equipment to improve production at mining operations in
Armenia, due diligence on prospective acquisitions, compensation
to the private placement agent, as well as general
corporate and working capital purposes.
-------------------
1 Excluding all shares of common stock issuable pursuant to options or warrants
to purchase common stock which totaled 5,150,000 shares as of February 28, 2006.
5
Terms of the
Offering Offering proceeds will be deposited and held in a non-interest
bearing segregated account at J.P. Morgan Chase Bank and may be
withdrawn by the Company upon the closing of the Offering or
any tranches thereof.
Who May Invest The shares of common stock of the Company are being offered
pursuant to this Memorandum solely to persons who are "accredited
investors" as defined in Regulation D or who are non US residents
as defined in Regulation 901 et. seq. (Regulation S) promulgated
under the Securities Act of 1933, as amended. See the Accredited
Investor Suitability Questionnaire attached hereto as Appendix B.
Risk Factors The shares of common stock of the Company offered
hereby involve a high degree of risk, including, without
limitation, the following:
(i) the Company is a development stage company and has not
generated any mining revenues to date but has developed and sold
an interest in an Armenian gold mining joint venture;
(ii) the Company has in Chile a royalty interest and right to
repurchase a mineral-bearing property known as Santa Candelaria
and in Armenia licenses for and operations at the Hankavan and
Toukhmanuk properties and surrounding exploration areas as well
as joint venture interests with Iberian Resources in the Lichkvaz
and Marjan properties and a 20% participation right in any new
exploration undertaken by Sterlite Gold Limited or its successors
in Armenia, and while it is in negotiations for additional
acquisitions it has not closed them On January 24, 2006, the
Company has acquired an 80% interest in the Getik gold and
uranium property in exchange for 100,000 shares of the Company's
common stock;
6
(iii) the Company may not be able to obtain adequate insurance
protection for its potential investments in the mining projects;
(iv) the prices of gold and other minerals historically fluctuate
and are affected by numerous factors beyond the Company's control
and no assurance can be given that any reserves proved or
estimated will actually be produced;
(v) the Company's proposed mining operations will be subject to a
variety of potential engineering, seismic and other risks, some
of which cannot be predicted and which may not be covered by
insurance;
(vi) the Company will be subject to intense competition in its
proposed mining activity and many mining companies have
substantially greater resources than those possessed by the
Company;
(vii) the shares of common stock are subject to restrictions on
transfer;
(viii) the SEC in any future review of the Company's filings of
any kind with it may question the classification of the Company
for federal securities law purposes (although it has not done to
date), which could adversely affect the future operations of the
Company or the public trading of its shares of common stock;
(ix) an investor may lose his entire investment in the shares of
common stock;
(x) the Company's Chairman, President, and one of its directors
own approximately 30 % of the shares of the Company's common
stock and, if they act jointly with the shareholders associated
with Firebird Management, LLC which own approximately 32% of the
shares of the Company's common stock, will be able to effectively
determine the vote on any matter being voted on by the Company's
stockholders; and
(xi) the value of the Company's assets may be adversely affected
by political, economic and other factors in Armenia or Chile.
7
Restrictions
on Resale;
Registration
Rights The investors who purchase any shares of common stock pursuant to
the Offering will be restricted from selling, transferring,
pledging or otherwise disposing of any shares due to restrictions
under applicable Federal and state securities law. The Company
has agreed to give each investor on demand (commencing 90 days
after the closing of this Offering), piggyback, and certain other
registration rights with respect to the shares of common stock
issuable pursuant to the Offering. See the Registration Rights
Agreement and the Subscription Agreement attached hereto.
Listing The Company's shares of common stock are currently not listed for
trading on any stock exchange. The Company's shares are publicly
trading on the OTCBB, over-the-counter market in the United
States (the application for such trading was approved by the
National Association of Securities Dealers, Inc. and the
Company's common stock became eligible for trading on the OTCBB
on March 31, 2004).
How to Invest Each investor must:
(a) execute and deliver the Subscription Agreement attached
hereto as Appendix A, and pay the subscription price for the
shares of common stock as provided therein;
(b) execute and deliver the Accredited Investor Suitability
Questionnaire attached hereto as Appendix B;
(c) execute and deliver the Registration Rights Agreement
attached hereto as Appendix C; and
(d) send or deliver all of the signed documents to the Company.
All references contained in this description of "The Terms of
Offering" are qualified in their entirety by reference to the specific
agreements containing the applicable terms.
9
APPENDIX A
SUBSCRIPTION AGREEMENT
Global Gold Corporation
45 East Putnam Avenue
Greenwich, Connecticut 06830
Gentlemen:
This Subscription Agreement (the "Agreement") has been executed by the
undersigned in connection with the offer by Global Gold Corporation, a Delaware
corporation (the "Company") to sell (the "Offering) a minimum of 4,000,000
shares and up to a maximum of 10,400,000 shares, of its common stock, $.001 par
value per share, with a minimum purchase of 100,000 shares of common stock
(unless otherwise permitted by the Company), with the purchase price for such
shares payable in cash upon subscription. Each three shares purchased shall also
entitle the purchaser to a warrant for the purchase of an additional one share
at the price per share of $2.00 exercisable on or before the sooner of (a) April
1, 2008 or (b) sixty (60) days following a determination by the Company that the
weighted average trading price of the common shares over a thirty (30)
consecutive trading day period commencing after August 1, 2006 is $3.00 USD or
greater. The shares of common stock of the Company together with the warrants
(the "Units" or the "Securities") are being offered pursuant to the Company's
Confidential Private Placement Memorandum dated March 1, 2006, as may be amended
from time to time (the "Memorandum"). The Offering is intended to come within
the provision of Regulation D under the Securities Act of 1933, as amended (the
"Act").
The undersigned and the Company hereby agree as follows:
1. Subscription.
(a) Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for the number of Units at the
aggregate purchase price set forth at the end hereof at the rate of $1.25 per
share (the "Purchase Price"). In connection therewith, the undersigned hereby
tenders:
(i) the Purchase Price in cash or by check (subject
to collection), bank draft or
postal or express money order payable in United States dollars, or by wire
transfer, to "Global Gold Corporation - Special Account"
(ii) an executed copy of this Agreement;
(iii) an executed copy of the Accredited Investor Suitability Questionnaire; and
(iv) an executed copy of the Registration Rights Agreement.
1
(b) The Purchase Price will be deposited by the Company in a
non-interest-bearing segregated bank account at J.P. Morgan Chase Bank or
another bank selected by the Company in its sole discretion. The Purchase Price
will be available for the Company's sole use immediately upon its acceptance of
the Agreement and the closing of the Offering or any tranche thereof. If the
minimum offering of 4,000,000 shares is not sold, the undersigned shall have the
right to cancel the subscription and receive repayment of funds paid without
interest or deduction.
2. The Company represents and warrants to the undersigned that since
September 30, 2005, there has been no material adverse change in the financial
condition, results of operations or general affairs of the Company, other than
as disclosed in the Memorandum, the periodic reports filed by the Company with
the Securities and Exchange Commission, and press releases, issued by the
Company.
3. The undersigned represents and warrants to the Company that:
(a) The undersigned has received a copy of the Memorandum, and
has
carefully read and fully understands the Memorandum, including the Risk Factors
set forth therein and any additional risk factors reflected in any annual,
quarterly and other reports filed by the Company with the Securities and
Exchange Commission or press releases;
(b) THE UNDERSIGNED UNDERSTANDS THAT THIS INVESTMENT IN
COMPANY IS ILLIQUID AND INVOLVES A HIGH DEGREE OF RISK AND IS ONLY SUITABLE FOR
AN INVESTOR WHO CAN AFFORD TO LOSE HIS ENTIRE INVESTMENT IN THE SECURITIES;
(c) The undersigned understands that the Securities offered
herein have not been registered under the Act or the securities laws of any
state of the United States and will be subject to substantial restrictions on
transferability unless and until the Securities are registered or an exemption
from registration becomes available;
(d) The undersigned understands that an appropriate stop
transfer order will be placed on the books of the Company's transfer agent
respecting the certificates evidencing the Securities and such certificates
shall bear such legend until such time as the respective securities in question
shall have been registered under the act or shall have been transferred in
accordance with an opinion of counsel acceptable to counsel for the Company that
such registration is not required;
(e) The undersigned's decision to purchase the Securities is
based solely on the information contained in the Memorandum;
(f) The residence of the undersigned set forth below is the
true and correct residence of the undersigned;
2
(g) The undersigned has read and understands the Memorandum;
(h) The undersigned meets the suitability standards set forth
in the Memorandum under "Who May Invest" and specifically satisfies the
definition of an "accredited investor" or as otherwise set forth therein;
(i) The Accredited Investor Suitability Questionnaire executed
and delivered by the undersigned is true and complete in all respects;
(j) The undersigned (A) has been given the opportunity to ask
questions of, and receive answers from, the Company concerning the terms and
conditions of the Offering and other matters pertaining to this investment, and
all such questions have been answered to the satisfaction of the undersigned;
(B) has been given the opportunity to obtain such additional information
necessary to verify the accuracy of the information contained in the Memorandum
or that which has been otherwise provided in order for him to evaluate the
merits and risks of investment in the Securities; and (C) has been given the
opportunity to obtain additional information from the Company, in each case
except to the extent the Company has informed the undersigned that it does not
possess such information and cannot acquire it without unreasonable effort to
expense, or that the requested information is proprietary and confidential, and
the undersigned has not been furnished with any other offering literature or
prospectus except as referred to herein in the Memorandum;
(k) The undersigned has not been furnished with any oral
representation, warranty or information in connection with the Offering by the
Company or any officer, director, employee, agent, affiliate or subsidiary or
counsel or other advisor of any of them; and
(l) The undersigned is purchasing the Securities for his own
account for investment purposes only and not with a view to the sale or other
distribution thereof, and that the undersigned presently has no intention of
offering, selling, transferring, pledging, hypothecating, or otherwise disposing
of all or any part of the Securities at any particular time, for any particular
price, or upon the happening of any particular event or circumstances.
4. The undersigned understands and agrees that this subscription is
subject to the following terms and conditions:
(a) This subscription is irrevocable and the execution and
delivery of this Agreement will not constitute an agreement between the
undersigned and the Company until this Agreement has been accepted by the
Company;
(b) The Company can, in its sole discretion, reject a
subscription as soon as practicable after receipt of the undersigned's
subscription. The undersigned will be promptly notified by the Company as to
whether his subscription has been accepted. If the undersigned's subscription is
not accepted, his check will be returned promptly and all of his obligations
hereunder shall terminate; and
3
(c) This subscription is not transferable or assignable,
either before or after acceptance hereof by the Company, and the Securities
issuable on account of this subscription will only be issued in the name of, and
delivered to, the undersigned.
5. If the undersigned is a corporation, partnership, limited liability
company, estate or trust, the undersigned represents and warrants that:
(a) The undersigned has been duly formed and is validly
existing in good standing under the laws of the jurisdiction of its formation
with full power and authority to enter into the transactions contemplated by
this Agreement;
(b) This Agreement has been duly and validly authorized,
executed and delivered, and, when executed and delivered by the entity, will
constitute the valid, binding and enforceable agreement of the undersigned;
(c) The person signing this Agreement and any other instrument
delivered on behalf of such entity has been duly authorized by such entity and
has full power and authority to do so; and
(d) Such entity has not been formed for the specific purposes
of acquiring the Securities.
6. The representations, warranties and agreements made by the
undersigned and the Company herein have been made with the intent that they be
relied upon by the other party for purposes of the Offering. Both parties
further undertake to notify the other party immediately of any change in any
information supplied by either party. If more than one person is signing this
Agreement, each representation, warranty and agreement shall be a joint and
several representation, warranty and agreement of each such subscriber.
7. The undersigned unconditionally agrees to indemnify and hold the
Company, its officers, directors and shareholders or any other person who may be
deemed to control the Company, and any of their counsel, advisors and
accountants, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the undersigned's, or his attorney's or
agent's representations, warranties or statements or the breach of any of the
agreements contained herein.
8. This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of law principles. All parties hereto (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in the City of
New York in the State of New York (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the exclusive jurisdiction of any
federal or state court in the City of New York in the State of New York in any
such suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this
Agreement. All parties hereto agree that the mailing of any process in any suit,
action or proceeding in accordance with the addresses reflected in this
Agreement shall constitute personal service thereof.
4
Dated: _______________, 2006
Number of Shares Subscribed at $1.25 per share: ________ Share [s]
Total Purchase Price: $_____________
Payment Enclosed: $_____________
ENTITY SUBSCRIBERS SIGN HERE: INDIVIDUAL SUBSCRIBERS SIGN HERE:
________________________________ __________________________________
Print Name of Subscriber Print Name of Subscriber
By:_____________________________ __________________________________
Signature
________________________________ __________________________________
Print Name and Title of Person Signing Signature of Joint Subscriber, if any
Mailing Address: Mailing Address:
_______________________________ __________________________________
Street Address Street Address
_______________________________ __________________________________
City, State and Zip Code City, State and Zip Code
_______________________________ __________________________________
Taxpayer Identification Number Social Security Number of Subscriber
_________________________________ ___________________________________
Country of incorporation Social Security Number of Joint Subscriber
____________________________________
Passport number
(Check One)
__________ Individual
__________ Tenants-in-common
__________ Joint tenants with right of survivorship (each must sign)
__________ Community property.(0)
__________ Partnership
__________ Corporation
__________ Limited Liability Company
__________ As custodian, trustee or agent for ___________________________
This Subscription Agreement is
accepted by Global Gold Corporation
this ____ day of ___________, 2006
By: _____________________________
Drury J. Gallagher, Chairman
and Chief Executive Officer
5
---------------------------
(0) * If the investor is a resident of a community property state, the
subscription should indicate whether the Securities will be owned as separate or
community property and will be registered jointly in the name of more than one
person, and the nature of the joint ownership should be indicated (i.e., tenants
in common, joint tenants with right of survivorship, tenants by the entirety, or
other designation as may be permitted by the law of the state of the investor's
domicile).
APPENDIX A
SUBSCRIPTION AGREEMENT
Global Gold Corporation
45 East Putnam Avenue
Greenwich, Connecticut 06830
Gentlemen:
This Subscription Agreement (the "Agreement") has been executed by the
undersigned in connection with the offer by Global Gold Corporation, a Delaware
corporation (the "Company") to sell (the "Offering) a minimum of 4,000,000
shares and up to a maximum of 10,400,000 shares, of its common stock, $.001 par
value per share, with a minimum purchase of 100,000 shares of common stock
(unless otherwise permitted by the Company), with the purchase price for such
shares payable in cash upon subscription. Each three shares purchased shall also
entitle the purchaser to a warrant for the purchase of an additional one share
at the price per share of $2.00 exercisable on or before the sooner of (a) April
1, 2008 or (b) sixty (60) days following a determination by the Company that the
weighted average trading price of the common shares over a thirty (30)
consecutive trading day period commencing after August 1, 2006 is $3.00 USD or
greater. The shares of common stock of the Company together with the warrants
(the "Units" or the "Securities") are being offered pursuant to the Company's
Confidential Private Placement Memorandum dated March 1, 2006, as may be amended
from time to time (the "Memorandum"). The Offering is intended to come within
the provision of Regulation D under the Securities Act of 1933, as amended (the
"Act").
The undersigned and the Company hereby agree as follows:
1. Subscription.
(a) Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for the number of Units at the
aggregate purchase price set forth at the end hereof at the rate of $1.25 per
share (the "Purchase Price"). In connection therewith, the undersigned hereby
tenders:
(i) the Purchase Price in cash or by check (subject
to collection), bank draft or
postal or express money order payable in United States dollars, or by wire
transfer, to "Global Gold Corporation - Special Account"
(ii) an executed copy of this Agreement;
(iii) an executed copy of the Accredited Investor Suitability Questionnaire; and
(iv) an executed copy of the Registration Rights Agreement.
1
(b) The Purchase Price will be deposited by the Company in a
non-interest-bearing segregated bank account at J.P. Morgan Chase Bank or
another bank selected by the Company in its sole discretion. The Purchase Price
will be available for the Company's sole use immediately upon its acceptance of
the Agreement and the closing of the Offering or any tranche thereof. If the
minimum offering of 4,000,000 shares is not sold, the undersigned shall have the
right to cancel the subscription and receive repayment of funds paid without
interest or deduction.
2. The Company represents and warrants to the undersigned that since
September 30, 2005, there has been no material adverse change in the financial
condition, results of operations or general affairs of the Company, other than
as disclosed in the Memorandum, the periodic reports filed by the Company with
the Securities and Exchange Commission, and press releases, issued by the
Company.
3. The undersigned represents and warrants to the Company that:
(a) The undersigned has received a copy of the Memorandum, and
has
carefully read and fully understands the Memorandum, including the Risk Factors
set forth therein and any additional risk factors reflected in any annual,
quarterly and other reports filed by the Company with the Securities and
Exchange Commission or press releases;
(b) THE UNDERSIGNED UNDERSTANDS THAT THIS
INVESTMENT IN COMPANY IS ILLIQUID AND INVOLVES A HIGH DEGREE OF RISK AND IS
ONLY SUITABLE FOR AN INVESTOR WHO CAN AFFORD TO LOSE HIS ENTIRE INVESTMENT IN
THE SECURITIES;
(c) The undersigned (i) is not a US Person (as defined
herein); (ii) will not transfer or deliver any interest in the Shares except in
accordance with the restrictions set forth in Section 2(f) of the Subscription
Agreement and in the Memorandum; (iii) will notify the Company immediately if
the undersigned becomes a US Person at any time prior to the sale of the Shares;
and (iv) is not subscribing on behalf of or funding his investment with funds
obtained from US Persons.
(d) Except for offers and sales to discretionary or similar
accounts held for the benefit or account of a non-US Person by a US dealer or
other professional fiduciary, all offers to sell and offers to buy the Shares
were made to or by the undersigned while the undersigned was outside the United
States and at the time that the undersigned's order to buy the Shares was
originated the undersigned was outside the United States.
2
(e) The undersigned understands that the Shares have not been
registered under the Securities Act, the securities laws of any state thereof or
the securities laws of any other jurisdiction, nor is such registration
contemplated. The undersigned agrees to resell, pledge or otherwise transfer the
Shares only in accordance with the provisions of Regulation S (Rule 901 through
905 and the Preliminary Notes), pursuant to a registration statement under the
Securities Act or pursuant to an available exemption from registration under the
Securities Act, and agrees not to enter into any hedging transactions involving
those securities, unless in compliance with the Securities Act. The undersigned
understands and agrees further that the undersigned may not sell or transfer the
Shares in the absence of either an effective registration statement under the
Securities Act or an opinion of counsel satisfactory to the Company that such
sale or transfer does not require registration under the Securities Act and will
not be in violation of the Securities Act or applicable state securities or
(f) The undersigned understands that an appropriate stop
transfer order will be placed on the books of the Company's transfer agent
respecting the certificates evidencing the Securities and such certificates
shall bear such legend until such time as the respective securities in question
shall have been registered under the act or shall have been transferred in
accordance with an opinion of counsel acceptable to counsel for the Company that
such registration is not required;
(g) The undersigned's decision to purchase the Securities is
based solely on the information contained in the Memorandum;
(h) The residence of the undersigned set forth below is the
true and correct residence of the undersigned;
(i) The undersigned has read and understands the Memorandum;
(j) The undersigned meets the suitability standards set forth
in the Memorandum under "Who May Invest" and specifically satisfies the
definition of an "accredited investor" or as otherwise set forth therein;
(k) The Accredited Investor Suitability Questionnaire executed
and delivered by the undersigned is true and complete in all respects;
(l) The undersigned (A) has been given the opportunity to ask
questions of, and receive answers from, the Company concerning the terms and
conditions of the Offering and other matters pertaining to this investment, and
all such questions have been answered to the satisfaction of the undersigned;
(B) has been given the opportunity to obtain such additional information
necessary to verify the accuracy of the information contained in the Memorandum
or that which has been otherwise provided in order for him to evaluate the
merits and risks of investment in the Securities; and (C) has been given the
opportunity to obtain additional information from the Company, in each case
except to the extent the Company has informed the undersigned that it does not
possess such information and cannot acquire it without unreasonable effort to
expense, or that the requested information is proprietary and confidential, and
the undersigned has not been furnished with any other offering literature or
prospectus except as referred to herein in the Memorandum;
3
(m) The undersigned has not been furnished with any oral
representation, warranty or information in connection with the Offering by the
Company or any officer, director, employee, agent, affiliate or subsidiary or
counsel or other advisor of any of them; and
(n) The undersigned is purchasing the Securities for his own
account for investment purposes only and not with a view to the sale or other
distribution thereof, and that the undersigned presently has no intention of
offering, selling, transferring, pledging, hypothecating, or otherwise disposing
of all or any part of the Securities at any particular time, for any particular
price, or upon the happening of any particular event or circumstances.
4. All certificates for Shares shall bear the following notice:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES, AND MAY ONLY BE SOLD, RESOLD,
PLEDGED, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF IN COMPLIANCE
WITH THE SECURITIES ACT AND APPLICABLE LAWS OF THE STATES, TERRITORIES
AND POSSESSIONS OF THE UNITED STATES GOVERNING THE OFFER AND SALE OF
SECURITIES AND ONLY (1) OUTSIDE THE UNITED STATES TO A PERSON OTHER
THAN A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH RULES 901 THROUGH 905 AND THE
PRELIMINARY NOTES OF REGULATION S UNDER THE SECURITIES ACT, (2) TO A
PERSON WHOM THE HOLDER OF THE SECURITIES REPRESENTED HEREBY REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (3) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (4) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. THE HOLDER,
BY ITS ACCEPTANCE OF THIS CERTIFICATE OR THE SECURITIES REPRESENTED
HEREBY, AS THE CASE MAY BE, REPRESENTS THAT IT UNDERSTANDS AND AGREES
TO THE FOREGOING RESTRICTIONS. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES REPRESENTED HEREIN MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.
4
5. The undersigned understands and agrees that this subscription is
subject to the following terms and conditions:
(a) This subscription is irrevocable and the execution and
delivery of this Agreement will not constitute an agreement between the
undersigned and the Company until this Agreement has been accepted by the
Company;
(b) The Company can, in its sole discretion, reject a
subscription as soon as practicable after receipt of the undersigned's
subscription. The undersigned will be promptly notified by the Company as to
whether his subscription has been accepted. If the undersigned's subscription is
not accepted, his check will be returned promptly and all of his obligations
hereunder shall terminate; and
(c) This subscription is not transferable or assignable,
either before or after acceptance hereof by the Company, and the Securities
issuable on account of this subscription will only be issued in the name of, and
delivered to, the undersigned.
6. If the undersigned is a corporation, partnership, limited liability
company, estate or trust, the undersigned represents and warrants that:
(a) The undersigned has been duly formed and is validly
existing in good standing under the laws of the jurisdiction of its formation
with full power and authority to enter into the transactions contemplated by
this Agreement;
(b) This Agreement has been duly and validly authorized,
executed and delivered, and, when executed and delivered by the entity, will
constitute the valid, binding and enforceable agreement of the undersigned;
(c) The person signing this Agreement and any other instrument
delivered on behalf of such entity has been duly authorized by such entity and
has full power and authority to do so; and
(d) Such entity has not been formed for the specific purposes
of acquiring the Securities.
7. The representations, warranties and agreements made by the
undersigned and the Company herein have been made with the intent that they be
relied upon by the other party for purposes of the Offering. Both parties
further undertake to notify the other party immediately of any change in any
information supplied by either party. If more than one person is signing this
Agreement, each representation, warranty and agreement shall be a joint and
several representation, warranty and agreement of each such subscriber.
8. The undersigned unconditionally agrees to indemnify and hold the
Company, its officers, directors and shareholders or any other person who may be
deemed to control the Company, and any of their counsel, advisors and
accountants, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the undersigned's, or his attorney's or
agent's representations, warranties or statements or the breach of any of the
agreements contained herein.
5
9. This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of law principles. All parties hereto (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in the City of
New York in the State of New York (ii) waive any objection which they may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding, and (iii) irrevocably submit to the exclusive jurisdiction of any
federal or state court in the City of New York in the State of New York in any
such suit, action or proceeding, but such consent shall not constitute a general
appearance or be available to any other person who is not a party to this
Agreement. All parties hereto agree that the mailing of any process in any suit,
action or proceeding in accordance with the addresses reflected in this
Agreement shall constitute personal service thereof.
Dated: _______________, 2006
Number of Shares Subscribed at $1.25 per share: ________ Share [s]
Total Purchase Price: $_____________
Payment Enclosed: $_____________
ENTITY SUBSCRIBERS SIGN HERE: INDIVIDUAL SUBSCRIBERS SIGN HERE:
________________________________ __________________________________
Print Name of Subscriber Print Name of Subscriber
By:_____________________________ __________________________________
Signature
________________________________ __________________________________
Print Name and Title of Person Signing Signature of Joint Subscriber, if any
Mailing Address: Mailing Address:
_______________________________ __________________________________
Street Address Street Address
_______________________________ __________________________________
City, State and Zip Code City, State and Zip Code
_______________________________ __________________________________
Taxpayer Identification Number Social Security Number of Subscriber
_________________________________ ___________________________________
Country of incorporation Social Security Number of Joint Subscriber
____________________________________
Passport number
6
(Check One)
__________ Individual
__________ Tenants-in-common
__________ Joint tenants with right of survivorship (each must sign)
__________ Community property.(0)
__________ Partnership
__________ Corporation
__________ Limited Liability Company
__________ As custodian, trustee or agent for ___________________________
This Subscription Agreement is
accepted by Global Gold Corporation
this ____ day of ___________, 2006
By: _____________________________
Drury J. Gallagher, Chairman
and Chief Executive Officer
---------------------------------
(0) * If the investor is a resident of a community property state, the
subscription should indicate whether the Securities will be owned as separate or
community property and will be registered jointly in the name of more than one
person, and the nature of the joint ownership should be indicated (i.e., tenants
in common, joint tenants with right of survivorship, tenants by the entirety, or
other designation as may be permitted by the law of the state of the investor's
domicile).
7
APPENDIX C
REGISTRATION RIGHTS AGREEMENT
OF
GLOBAL GOLD CORPORATION
Agreement made as of the 4th day of April, 2006 by and among
Global Gold Corporation, a Delaware corporation currently having its office and
principal place of business at 45 East Putnam Avenue, Greenwich, Connecticut
06830 (the "Corporation"), and each party purchasing shares of the common stock
of the Corporation pursuant to the Memorandum (as defined below) (each of the
last named persons shall hereinafter be referred to individually as a
"Shareholder" and collectively as the "Shareholders").
WHEREAS, upon the closing of the offering of up to a maximum
of 10,400,000 shares of common stock of the Corporation pursuant to the
Confidential Private Placement Memorandum dated March 1, 2006, as may be amended
from time to time (the "Offering") (each individual closing of which shall be
referred to as the "Effective Date"), as defined in the Offering, the
Shareholders will collectively own up to a maximum of 10,400,000 shares of
common stock, $.001 par value per share, of the Corporation (shares of such
common stock acquired pursuant to the Offering being referred to as the "Shares"
and collectively as the "Stock");
WHEREAS, upon the Effective Date, the Corporation and the
Shareholder desire to provide for certain registration rights for the Stock of
the Corporation or any interest therein now or hereafter acquired by the
Shareholders pursuant to the Offering;
NOW, THEREFORE, effective upon the Effective Date, in
consideration of the mutual covenants and conditions herein contained, each of
the parties hereby agrees as follows:
1
1.1 Request for Registration.
(a) If the Corporation shall receive, at any time following
ninety (90) days after the date hereof, a written request from a Holder or
Holders (as defined below) of not less than 51% of the Shares sold in the
Offering that the Corporation file a registration statement under the Securities
Act of 1933, as amended (the "Act"), covering the registration of Registrable
Securities (as defined below) the anticipated aggregate offering price for which
would exceed $3,000,000, then the Corporation shall: (i) within ten (10) days of
the receipt thereof, give written notice of such request to all Holders; and
(ii) file as soon as practicable and use commercially reasonable efforts to
cause to be declared effective, the registration under the Act of all shares of
Registrable Securities which the Holders request to be registered, subject to
the limitations of subsection 1.1(b). For purposes of this Section 1, a "Holder"
or "Holders" shall mean any person owning or having the right to acquire
Registrable Securities or any assignee thereof in accordance with the provisions
of this Agreement. The term "Registrable Securities" shall mean (i) the shares
of Common Stock issued by the Corporation to a Shareholder, including any shares
issued pursuant to the Stock Subscription and Stockholder Agreement and any
shares issued or issuable upon the exercise of the Warrants, and (ii) any shares
of Common Stock issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the shares
referenced in (i) above, excluding in all cases, however, (1) shares of Common
Stock with respect to which a registration statement shall have been declared
effective under the Act and where such shares of Common Stock shall have been
disposed of in accordance with such registration statement, (2) shares of Common
Stock that have been distributed to the public in accordance with Securities and
Exchange Commission ("SEC") Rule 144 (or any successor provision; hereinafter,
"Rule 144") or (3) shares of Common Stock that are otherwise sold by a person in
a transaction in which the rights under this Section 1 are not assigned.
(b) If the Holders initiating the registration request
hereunder (the "Initiating Holders") intend to distribute the shares of
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Corporation as a part of their request made pursuant to
subsection 1.1(a) and the Corporation shall include such information in the
written notice referred to in subsection 1.1(a). The underwriter will be
selected by a majority in interest of the Initiating Holders and shall be
reasonably acceptable to the Corporation. In such event, the right of any Holder
to include its shares of Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's shares of Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the Initiating
Holders) to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Corporation
as provided in subsection 1.4(e)) enter into an underwriting agreement in
customary form and reasonably acceptable to the Corporation with the underwriter
or underwriters selected for such underwriting. Notwithstanding any other
provision of this Section 1.1, if the underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Initiating Holders shall so advise all Holders of
shares of Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
shares of Registrable Securities of the Corporation requested and entitled to be
included in such registration by each Holder; provided, however, that the number
of shares of Registrable Securities to be included in such underwriting shall
not be reduced unless all other securities are first entirely excluded from the
underwriting.
2
(c) Notwithstanding the foregoing, if the Corporation shall
furnish to Holders requesting a registration statement pursuant to this Section
1.1, a certificate signed by the Chief Executive Officer of the Corporation
stating that in the good faith judgment of the Board of Directors of the
Corporation, it would be seriously detrimental to the Corporation and its
stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Corporation
shall have the right to defer taking action with respect to such filing for a
period of not more than ninety (90) days after receipt of the request of the
Initiating Holders; provided, however, that the Corporation may not utilize this
right more than twice or for periods aggregating more than ninety (90) days in
any twelve (12) month period.
(d) In addition, the Corporation shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.1: (i) pursuant to a request by the Holders after the Corporation has
effected pursuant to this Section 1.1 two (2) registrations at the request of
such Holders and such registration has been declared or ordered effective; (ii)
during the period starting with the date thirty (30) days prior to the
Corporation's good faith estimate of the date of filing of, and ending on a date
ninety (90) days after the effective date of, a registration subject to Section
1.2 hereof; provided that the Corporation is actively employing in good faith
all reasonable efforts to cause such registration statement to become effective;
or (iii) if the Initiating Holders propose to dispose of shares of Registrable
Securities all of which may be disposed of without registration pursuant to Rule
144 under the Act during a three-month period or all of which may be disposed of
pursuant to a registration statement filed pursuant to Section 1.3 below.
With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of such
Holders' shares to the public without registration, the Corporation agrees to
use its reasonable efforts to: (i) make and keep public information available at
all times, as those terms are understood and defined in Rule 144 or any similar
or analogous rule promulgated under the Act; (ii) file with the SEC, in a timely
manner, all reports and other documents required of the Corporation under the
Exchange Act of 1934, as amended (the "1934 Act"); and (iii) so long as the
Holders own Registrable Securities, furnish to the Holders forthwith upon
request a written statement by the Corporation as to its compliance with the
reporting requirements of Rule 144(c) of the Act, a copy of the most recent
annual or quarterly report of the Corporation, and such other reports and
documents as the Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities without
registration.
3
2. Piggyback Registration Rights.
2.1 (a) If the Corporation shall propose to file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), at any time during the 24-month period after the Effective
Date, either on its own behalf or that of any of its shareholders for an
offering of shares of the capital stock of the Corporation for cash or
securities, the Corporation shall give written notice as promptly as possible of
such proposed registration to each Shareholder and shall use reasonable efforts
to include all of the shares of the Stock owned by the Shareholders ( the
"Seller" or "Registering Shareholder" and collectively the "Sellers" and
"Registering Shareholders") in such registration statements as such Seller shall
request within 10 days after receipt of such notice from the Corporation,
provided, that (A) if shares of the Stock are being offered by the Corporation
in an underwritten offering, any shares of the Stock proposed to be included in
the registration statement on behalf of the Seller shall be included in the
underwriting offering on the same terms and conditions as the stock being
offered by the Corporation, and (B) the Seller shall be entitled to include such
number of shares of the Stock owned by the Seller in such registration
statement, one time only during the applicable period set forth herein, so that
the proportion of shares of the Stock of each Seller to be included in such
registration statement to the total number of shares of the Stock owned by him
is equal to the proportion that the number of shares of the Stock of all Sellers
to be included in such registration statement bears to the total number of
shares of the Stock owned by all Sellers (except that each Seller shall have the
right to not exercise such piggyback registration right set forth herein once,
in which case such Seller shall have the right set forth in this Section 2.1
with respect to the next succeeding registration statement described in this
Section 2.1 proposed to be filed by the Corporation during such 36-month
period); and provided further, that (i) the Corporation shall not be required to
include such number or amount of shares owned by the Sellers in any such
registration statement if it relates solely to securities of the Corporation to
be issued pursuant to a stock option or other employee benefit plan, (ii) the
Corporation may, as to an offering of securities of the Corporation by the
Corporation, withdraw such registration statement at its sole discretion and
without the consent of the Sellers and abandon such proposed offering and (iii)
the Corporation shall not be required to include such number of shares of the
Stock owned by the Sellers in such registration statement if the Corporation is
advised in writing by its underwriter or investment banking firm that it
reasonably believes that the inclusion of the Sellers' shares would have an
adverse effect on the offering.
(b) A registration filed pursuant to Section
2.1(a) shall not be deemed to have been effected unless the registration
statement related thereto (i) has become effective under the Securities Act and
(ii) has remained effective for a period of at least nine months (or such
shorter period of time in which all of the Stock registered thereunder has
actually been sold thereunder); provided, however, that if, after any
registration statement filed pursuant to Section 2.1(a) becomes effective and
prior to the time the registration statement has been effective for a period of
at least nine months, such registration statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court solely due to actions or omissions to act of the
Corporation , such registration statement shall not be considered one of the
registrations applicable pursuant to Section 2.1(a).
2.2 Delay or Suspension of Registration.
Notwithstanding any other provision of this Section 2 to the contrary, if the
Corporation shall furnish to the Shareholders:
4
(a) a certificate signed by the Chief Executive Officer of the
Corporation stating that, in the good faith judgment of a majority of the
members of the entire Board of Directors of the Corporation, it would adversely
and materially affect the Corporation's ability to enter into an agreement with
respect to, or to consummate, a bona fide material transaction to which it is or
would be a party, or it would potentially adversely and materially affect the
Corporation's classification for federal securities law purposes, or the
Corporation has a plan to register stock to be sold for its own account within a
90-day period after the filing of the registration statement under Section
2.1(a), for the Corporation to use its reasonable best efforts to effect the
registration of the stock; or
(b) both (A) a certificate signed by the Chief
Executive Officer of the Corporation stating that, in the good faith judgment of
a majority of the members of the entire Board of Directors of the Corporation, a
material fact exists which the Corporation has a bona fide business purpose for
preserving as confidential and (B) an opinion of counsel to the Corporation to
the effect that the registration by the Corporation or the offer or sale by the
Shareholders of the Stock pursuant to an effective registration statement would
require disclosure of the material fact which is referenced in the Chief
Executive Officer's certificate required under Section 2.2(b)(ii)(A) and which,
in such counsel's opinion, is not otherwise required to be disclosed, then the
Corporation's obligations pursuant to Section 2.1(a) with respect to any such
filing of a registration statement shall be deferred or offers and sales of the
Stock by the Shareholders shall be suspended, as the case may be, until the
earliest of: (1) the date on which, as applicable (a) the Corporation's use of
reasonable best efforts to effect the registration of the Stock would no longer
have such a material adverse effect or (b) the material fact is disclosed to the
public or ceases to be material; (2) 135 days from the date of receipt by the
Shareholders of the materials referred to in Section 2.2(b) (i) and (ii) above;
and (3) such time as the Corporation notifies the Shareholders that it has
resumed use of its reasonable best efforts to effect registration of the Stock
or that offers and sales of the Stock pursuant to an effective registration
statement may be resumed, as the case may be. If the Shareholders receive the
materials referred to in Section 2.2(b)(ii) above while a registration statement
for the offer and sale of the Stock is in effect, each Shareholder agree to
terminate immediately any offer or sale of the Stock. A particular material
transaction to which the Corporation is or would be a party or a particular
material fact shall not give rise to more than one deferral or suspension notice
by the Corporation pursuant to the provisions of this Section 2.2.
2.3 In connection with any registration or
qualification pursuant to the provisions of this Section 2, the Corporation
shall, except as prohibited under the blue sky or securities laws of any
jurisdiction under which a registration or qualification is being effected, pay
all filing, registration and qualification fees of the Securities and Exchange
Commission, printing expenses, fees and disbursements of legal counsel and all
accounting expenses, except that each Seller shall bear the fees and expenses of
its own legal counsel, and the underwriting or brokerage discounts and
commissions, expenses of its brokers or underwriters and fees of the National
Association of Securities Dealers, Inc. attributable to its Stock; provided,
however, that the Corporation shall not be required in the case of any
registration hereunder to make blue sky filings in more than 5 states.
5
2.4 (a In each case of registration of shares of
Stock under the Securities Act pursuant to these registration provisions, the
Corporation shall unconditionally indemnify and hold harmless each Seller, each
underwriter (as defined in the Securities Act), and each person who controls any
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Securities Exchange Act of 1934 (the Sellers and each such
underwriter, and each such person who controls any such underwriter being
referred to for purposes of this Section 2.4, as an "Indemnified Person") from
and against any and all losses, claims, damages, liabilities and expenses
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement under which such shares
of the Stock were registered under the Securities Act, any prospectus or
preliminary prospectus contained therein or any amendment or supplement thereto
(including, in each case, any documents incorporated by reference therein), or
arising out of any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Seller or any
underwriter and furnished to the Corporation or the Shareholders, as the case
may be, in writing by any Seller or such underwriter expressly for use therein;
provided that the foregoing indemnification with respect to a preliminary
prospectus shall not inure to the benefit of any underwriter (or to the benefit
of any person controlling such underwriter) from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased shares of the
Stock to the extent such losses, claims, damages or liabilities result from the
fact that a copy of the final prospectus had not been sent or given to such
person at or prior to written confirmation of the sale of such shares to such
person.
(b) In each case of a registration of shares of the Stock
under the Securities Act pursuant to these registration provisions, each Seller
participating in the registration shall unconditionally indemnify and hold
harmless the Corporation (and its directors and officers), each underwriter and
each person, if any, who controls the Corporation or such underwriter within the
meaning of Section 15 of the Securities Act of Section 20(a) of the Securities
Exchange Act of 1934, to the same extent as the foregoing indemnity from the
Corporation to the Seller but only with reference to information relating to
such Seller and furnished to the Corporation by such Seller for use in the
registration statement, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto. Each Seller will use all
reasonable efforts to cause any underwriters of shares of Stock to be sold by
the Seller to indemnify the Corporation on the same terms as any Seller agrees
to indemnify the Corporation, but only with reference to information furnished
in writing by such underwriter for use in the registration statement.
(c) In case any action or proceeding shall be brought
against or instituted which involves any Indemnified Person, such Indemnified
Person shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing and the Indemnifying Person shall
retain counsel reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others the Indemnifying Person may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such action or proceeding, any Indemnified Person
shall have the right to obtain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person has agreed to the retention of such counsel at its expense
or (ii) the named parties to any such action or proceeding include both the
Indemnifying Person and the Indemnified Person, and the Indemnified Person has
been advised by counsel that there may be one or more defenses available to such
Indemnified Person which are different from or additional to those available to
the Indemnifying Person (in which case, if the Indemnified Person notifies the
Indemnifying Person that it wishes to employ separate counsel at the expense of
the Indemnifying Person, the Indemnifying Person shall not have the right to
assume the defense of such action or proceeding on behalf of such Indemnified
Person). It is understood that the Indemnifying Person shall not be liable for
the fees and expenses of more than one separate firm of attorneys at any time
for all such similarly situated Indemnified Persons. The Indemnifying Person
shall not be liable for any settlement of any action or proceeding effected
without its written consent.
6
(d) Notwithstanding anything in this Agreement to the
contrary, the Corporation shall not be liable to any Seller for any losses,
claims, damages or liabilities arising out of or caused by (A) any reasonable
delay (1) in filing or processing any registration statement or any preliminary
or final prospectus, amendment or supplement thereto after the inclusion of the
Sellers' Stock in such registration statement, or (2) in requesting such
registration statement be declared effective by the Commission and (B) the
failure of the Commission for any reason to declare effective any registration
statement.
3. MISCELLANEOUS.
3.1. Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by facsimile
or (b) three days after mailing if mailed from within the continental United
States by registered or certified mail, return receipt requested to the party
entitled to receive the same, if to the Corporation, Global Gold Corporation, 45
East Putnam Avenue, Greenwich, Connecticut 06830, with a copy to Patterson,
Belknap, Webb and Tyler, 1133 Avenue of the Americas 10036 Attn: John E.
Schmeltzer, Esq.; and if to any Shareholder, at his or its address as set forth
in the books and records of the Corporation. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement.
3.2 Governing Law. This Agreement and the rights of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of New York, without regard to its conflicts of law
principles. All parties hereto (i) agree that any legal suit, action or
proceeding arising out of or relating to this Agreement shall be instituted only
in a federal or state court in the City of New York in the State of New York
(ii) waive any objection which they may now or hereafter have to the laying of
the venue of any such suit, action or proceeding, and (iii) irrevocably submit
to the jurisdiction of any federal or state court in the City of New York in the
State of New York in any such suit, action or proceeding, but such consent shall
not constitute a general appearance or be available to any other person who is
not a party to this Agreement. All parties hereto agree that the mailing of any
process in any suit, action or proceeding in accordance with the notice
provisions of this Agreement shall constitute personal service thereof.
3.3 Entire Agreement; Waiver of Breach. This Agreement
constitutes the entire agreement among the parties and supersedes any prior
agreement or understanding among them with respect to the subject matter hereof,
and it may not be modified or amended in any manner other than as provided
herein; and no waiver of any breach or condition of this Agreement shall be
deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of any subsequent breach or condition of a like or different nature.
3.4 Binding Effect; Assignability. This Agreement
and all the terms and provisions hereof shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, successors and permitted
assigns. This Agreement and the rights of the parties hereunder shall not be
assigned except with the written consent of all parties hereto.
7
3.5 Captions. Captions contained in this Agreement
are inserted only as a matter of convenience and in no way define, limit or
extend the scope or intent of this Agreement or any provision hereof.
3.6 Number and Gender. Wherever from the context it
appears appropriate, each term stated in either the singular or the
plural shall include the singular and the plural, and pronouns stated in either
the masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
3.7 Severability. If any provision of this Agreement shall
be held invalid or unenforceable, such invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Agreement, and
this Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
3.8 Amendments. This Agreement may not be
amended except in a writing signed by all of the parties hereto.
3.9 Compliance with Securities Laws. Commencing with the
Effective Date, the Corporation will use its best efforts to comply thereafter
with the applicable provisions of the Securities Act and the Securities Exchange
Act of 1934.
3.10 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. In addition, this Agreement may
contain more than one counterpart of the signature page and this Agreement may
be executed by the affixing of such signature pages executed by the parties to
one copy of the Agreement; all of such counterpart signature pages shall be read
as though one, and they shall have the same force and effect as though all of
the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed Agreement on
the date first above written.
GLOBAL GOLD CORPORATION
By: __________________________________
Drury J. Gallagher, Chairman
and Chief Executive Officer
No. of Shares
Purchased SHAREHOLDER
___________________________________
___________________________________
By:___________________________________
APPENDIX D
THIS WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK ISSUABLE UPON
ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE OR TRANSFER
THEREOF MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
No. U-4 Right to
Purchase Shares of
Common Stock of
Global Gold
Corporation
Global Gold Corporation
Common Stock Purchase Warrant
Global Gold Corporation a Delaware corporation (the "Company"), hereby
certifies that, for value received, ______________________, a
_____________________ corporation with offices at
_________________________________(" "), or registered permitted assigns, is
entitled, subject to the terms set forth below, to purchase from the Company at
any time or from time to before 5:30 P.M., Eastern Standard Time on the sooner
of (a) April 1, 2008 or (b) sixty (60) days following a determination by the
Company that the weighted average trading price of the common shares over a
thirty (30) consecutive trading day period commencing after August 1, 2006 is
$3.00 USD or greater, _______________________( ) fully paid and nonassessable
shares of Common Stock, $.001 par value, of the Company, at a purchase price per
share of Two Dollars ($2.00) (such purchase price per share as adjusted from
time to time as herein provided is referred to herein as the "Purchase Price").
The number and character of such shares of Common Stock and the Purchase Price
are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Global Gold Corporation and
any corporation which shall succeed or assume the obligations
of the Company hereunder.
(b) The term "Common Stock" includes the Company's Common Stock,
$.001 par value per share, as authorized on the date of the
Agreement and any other securities into which or for which any
of such Common Stock may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
1
1. Exercise of Warrant.
1.1. Manner of Exercise: Payment of the Purchase Price.
(a) This Warrant may be exercised by the holder hereof, in
whole or in part, at any time or from time to time prior to the expiration date,
by surrendering to the Company at its principal office this Warrant, with the
form of Election to Purchase Shares attached hereto (or a reasonable facsimile
thereof) duly executed by the holder and accompanied by payment of the purchase
price for the number of shares of Common Stock specified in such form.
(b) Payment of the purchase price may be made as follows (or
by any combination of the following): in United States currency by cash or
delivery of a certified check or bank draft payable to the order of the Company
or by wire transfer to the Company.
1.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to, and the
purchase price shall have been received by, the Company as provided in Section
1.1, and at such time the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such exercise and shall be deemed to have become the holder or holders of record
thereof for all purposes.
1.3. Trustee for Warrantholders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall accept,
in its own name for the account of the Company or such successor person as may
be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
2. Delivery of Stock Certificates. etc. on Exercise. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
30 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which such holder shall be entitled on such exercise,
plus, in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then current market
value of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
2
3. Adjustment for Dividends in Other Stock, Property, etc.; Reclassification,
etc. In case at any time or from time to time, the holders of Common Stock shall
have received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or
similar corporate rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this Warrant,
on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrants after the effective date
of such dissolution pursuant to this Section 4 to a bank or trust company having
its principal office in New York, New York, as trustee for the holder or holders
of the Warrants.
3
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Adjustment for Issue or Sale of Common Stock
at Less than the Purchase Price in Effect.
5.1 General. If the Company shall, at any time or from time to time,
issue any additional shares of Common Stock (other than shares of Common Stock
excepted from the provisions of this Section 5 by Section 5.4) without
consideration or for a Net Consideration Per Share less than the Purchase Price
in effect immediately prior to such issuance, then, and in each such case:
(a) the Purchase Price shall be lowered to an amount
determined by multiplying such Purchase Price then in effect by a fraction:
(1) the numerator of which shall be (a) the number of
shares of Common Stock
outstanding (excluding treasury shares, but including for this purpose shares of
Common Stock issuable upon the exercise of any warrants) immediately prior to
the issuance of such additional shares of Common Stock, plus (b) the number of
shares of Common Stock which the net aggregate consideration, if any, received
by the Company for the total number of such additional shares of Common Stock so
issued would purchase at the Purchase Price in effect immediately prior to such
issuance, and
(2) the denominator of which shall be (a) the number
of shares of Common Stock
outstanding (excluding treasury shares, but including for this purpose shares of
Common Stock issuable upon the exercise of the any warrants) immediately prior
to the issuance of such additional shares of Common Stock, plus (b) the number
of such additional shares of Common Stock so issued; and
(b) the holder of this Warrant shall thereafter, on the
exercise hereof as provided in Section 1, be entitled to receive the number of
shares of Common Stock determined by multiplying the number of shares of Common
Stock which would otherwise (but for the provisions of this Section 5. 1) be
issuable on such exercise by the fraction of which (i) the numerator is the
Purchase Price which would otherwise (but for the provisions of this Section 5.
1) be in effect, and (ii) the denominator is the Purchase Price in effect on the
date of such exercise.
4
5.2 Definitions, etc. For purposes of this Section 5 and Section 7:
The issuance of any warrants, options or other subscription or purchase
rights with respect to shares of Common Stock and the issuance of any securities
convertible into or exchangeable for shares of Common Stock (or the issuance of
any warrants, options or any rights with respect to such convertible or
exchangeable securities) shall be deemed an issuance at such time of such Common
Stock if the Net Consideration Per Share which may be received by the Company
for such Common Stock (as hereinafter determined) shall be less than the
Purchase Price at the time of such issuance and, except as hereinafter provided,
an adjustment in the Purchase Price and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be made upon each such issuance in
the manner provided in Section 5. 1. Any obligation, agreement or undertaking to
issue warrants, options, or other subscription or purchase rights at any time in
the future shall be deemed to be an issuance at the time such obligation,
agreement or undertaking is made or arises. No adjustment of the Purchase Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be made under Section 5.1 upon the issuance of any shares of Common Stock
which are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible securities if any adjustment shall previously
have been made upon the issuance of any such warrants, options or other rights
or upon the issuance of any convertible securities (or upon the issuance of any
warrants, options or any rights therefor) as above provided. Any adjustment of
the Purchase Price and the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to this Section 5.2 which relates to
warrants, options or other subscription or purchase rights with respect to
shares of Common Stock shall be disregarded if, as, and to the extent that such
warrants, options or other subscription or purchase rights expire or are
canceled without being exercised, so that the Purchase Price effective
immediately upon such cancellation or expiration shall be equal to the Purchase
Price that otherwise would have been in effect at the time of the issuance of
the expired or canceled warrants, options or other subscriptions or purchase
rights, with such additional adjustments as would have been made to that
Purchase Price had the expired or cancelled warrants, options or other
subscriptions or purchase rights not been issued.
For purposes of this Section 5.2, the "Net Consideration Per Share"
which may be received by the Company shall be determined as follows:
(A) The "Net Consideration Per Share" shall mean the amount
equal to the total amount of consideration, if any, received by the Company for
the issuance of such warrants, options, subscriptions, or other purchase rights
or convertible or exchangeable securities, plus the minimum amount of
consideration, if any, payable to the Company upon exercise or conversion
thereof, divided by the aggregate number of shares of Common Stock that would be
issued if all such warrants, options, subscriptions, or other purchase rights or
convertible or exchangeable securities were exercised, exchanged or converted.
5
(B) The "Net Consideration Per Share" which may be received by
the Company shall be determined in each instance as of the date of issuance of
warrants, options, subscriptions or other purchase rights, or convertible or
exchangeable securities without giving effect to any possible future price
adjustments or rate adjustments which may be applicable with respect to such
warrants, options, subscriptions or other purchase rights or convertible
securities.
For purposes of this Section 5, if a part or all of the consideration
received by the Company in connection with the issuance of shares of the Common
Stock or the issuance of any of the securities described in this Section 5
consists of property other than cash, such consideration shall be deemed to have
the same value as shall be determined in good faith by the Board of Directors of
the Company.
This Section 5.2 shall not apply under any of the circumstances
described in Section 5.4.
5.3. Extraordinary Events. In the event that the Company shall (i)
issue additional shares of the Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 5.3. The
holder of this Warrant shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5.3) be issuable on such
exercise by a fraction of which (i) the numerator is the Purchase Price which
would otherwise (but for the provisions of this Section 5.3) be in effect, and
(ii) the denominator is the Purchase Price in effect on the date of such
exercise.
5.4. Excluded Shares. Section 5. 1 shall not apply to the (i) issuance
of shares of Common Stock, or options therefor, to directors, officers,
employees, advisors and consultants of the Company pursuant to any stock option,
stock purchase, stock ownership or compensation plan approved by the
compensation committee of the Company's Board of Directors, (ii) the issuance of
shares pursuant to the exercise of the warrants issued by the Company dated
October 31, 2000, and (iii) the issuance of any shares pursuant to the exercise
of the warrants issued by the Company dated November 4, 2004.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
6
7. Accountants' Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Treasurer or Chief
Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants selected by the Company to compute such adjustment
or readjustment in accordance with the terms of the Warrants and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such issue or sale and as adjusted and readjusted as provided in this Warrant.
The Company will forthwith mail a copy of each such certificate to each holder
of a Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of
any class or securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
7
(d) any proposed issue or grant by the Company of any shares
of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issue of Common Stock on the exercise of
any warrants), then and in each such event the Company will mail or cause to be
mailed to each registered holder of a Warrant a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed at
least 20 days prior to the date specified in such notice on which any such
action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrants, all shares of Common Stock from time to time
issuable on the exercise of the Warrants represented by this certificate.
10. Exchange of Warrants. On surrender for exchange of any Warrant, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant or warrants of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes and, if requested by the Company, demonstration by
such holder of compliance with applicable securities laws) may direct, calling
in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant or Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction of any Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of such warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company hereby appoints American Registrar and Transfer
Company, with offices in Salt Lake City, Utah, as its agent for the purpose of
issuing Common Stock on the exercise of the Warrants pursuant to Section 1,
exchanging Warrants pursuant to Section 10, and replacing Warrants pursuant to
Section 11, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
The Company may change such agent and designate a new agent in the United States
for the above-described purposes by written notice to each holder of a Warrant.
8
13. Remedies. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that a holder of this Warrant may suffer
irreparable harm and that such terms may be specifically enforced by a decree by
a court of competent jurisdiction for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability. This Warrant is issued upon the following terms, to all of
which each holder or owner hereof by the taking hereof consents and agrees:
(a) subject to compliance with all applicable securities laws, title to
this Warrant may be transferred by endorsement (by the holder hereof executing
the form of assignment at the end hereof) and delivery in the same manner as in
the case of a negotiable instrument transferable by endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
15. Notices. All notices or other communications required or permitted to be
given pursuant to this Warrant shall be in writing and shall be considered as
duly given on (a) the date of delivery, if delivered in person, by nationally
recognized overnight delivery service or by facsimile or (b) three days after
mailing if mailed from within the continental United States by registered or
certified mail, return receipt requested to the party entitled to receive the
same, if to the Company, Global Gold Corporation, 45 East Putnam Avenue,
Greenwich, CT 06830, and if to the holder of a Warrant, at the address of such
holder shown on the books of the Company. Any party may change his or its
address by giving notice to the other party stating his or its new address.
Commencing on the 10th day after the giving of such notice, such newly
designated address shall be such party's address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Warrant.
16. Governing Law. This Warrant and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of law principles. All parties hereto (i) agree
that any legal suit, action or proceeding arising out of or relating to this
Agreement shall be instituted only in a federal or state court in the City of
New York in the State of New York in the United States of America (ii) waive any
objection which they may now or hereafter have to the laying of the venue of any
such suit, action or proceeding, and (iii) irrevocably submit to the
jurisdiction of such federal or state court in the City of New York in the State
of New York in any such suit, action or proceeding, but such consent shall not
constitute a general appearance or be available to any other person who is not a
party to this Warrant. All parties hereto agree that the mailing of any process
in any suit, action or proceeding in accordance with the notice provisions of
this Warrant shall constitute personal service thereof.
9
17. Entire Agreement; Waiver of Breach. This Warrant constitutes the entire
agreement among the parties and supersedes any prior agreement or understanding
among them with respect to the subject matter hereof, and it may not be modified
or amended in any manner other than as provided herein; and no waiver of any
breach or condition of this Warrant shall be deemed to have occurred unless such
waiver is in writing, signed by the party against whom enforcement is sought,
and no waiver shall be claimed to be a waiver of any subsequent breach or
condition of a like or different nature.
18. Severability. If any provision of this Warrant shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render invalid or unenforceable
any other severable provision of this Warrant, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not contained
herein.
19. Amendment. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
20. Expiration. The right to exercise this Warrant shall expire at 5:30 P.M.
Eastern Standard Time on the sooner of (a) April 1, 2008 or (b) sixty (60) days
following a determination by the Company that the weighted average trading price
of the common shares over a thirty (30) consecutive trading day period
commencing after August 1, 2006 is $3.00 USD or greater as determined by the
Company's Board of Directors.
21. Restrictions on Transferability; Restrictive Legend. The holder acknowledges
that the shares of Common Stock issuable upon exercise of this Warrant are
subject to restrictions under applicable Federal and state securities laws. Each
certificate representing shares of Common Stock issued shall, upon the exercise
of this Warrant, bear the following legend in addition to such other restrictive
legends as may be required by law:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws, and no sale or transfer thereof may be effected without
an effective registration statement or an opinion of counsel for the holder,
satisfactory to the company, that such registration is not required under the
act and any applicable state securities laws."
Dated: , 2006
Global Gold Corporation
By: ________________________________
Drury J. Gallagher, Chairman
10
[FORM OF]
ELECTION TO PURCHASE SHARES
To: Global Gold Corporation
The undersigned hereby irrevocably elects to exercise the Warrant to
purchase ____ shares of Common Stock, par value $.001 per share ("Common
Stock"), of Global Gold Corporation and hereby makes payment of $________
therefor . The undersigned hereby requests that certificates for such shares be
issued and delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
If the number of shares of Common Stock purchased (and/or reduced)
hereby is less than the number of shares of Common Stock covered by the Warrant,
the undersigned requests that a new Warrant representing the number of shares of
Common Stock not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO:
(NAME OF HOLDER)
(ADDRESS, INCLUDING ZIP CODE)
11
DELIVER TO:
(NAME OF HOLDER)
(ADDRESS, INCLUDING ZIP CODE)
Dated: _________________________
[NAME OF HOLDER]
By
Name:
Title:
(Signature) (Signature must
conform to name of holder
as specified on the face of
the Warrant)
(Print Name)
(Street Address)
(City, State and Zip Code)
(Person's Social Security Number
or Tax Identification Number)
12
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto _________________________________ the right represented by the
within Warrant to purchase shares of Common Stock of Global Gold Corporation to
which the within Warrant relates, and appoints ____________________________as
its attorney to transfer such right on the books of Global Gold Corporation with
full power of substitution in the premises.
Dated: ________________
(Signature)
(Signature must conform to name of holder as
specified on the face of the Warrant)
(Print Name)
(Street Address)
(City, State and Zip Code)
(Person's Social Security
Number or Tax Identification Number)
Signed in the presence of:
________________________
13
EX-21
8
ex21.txt
LIST OF SUBSIDIARIES
Exhibit 21
Subsidiaries and Jurisdictions
State or Other Date of
Jurisdiction of Incorporation, Ownership
Incorporation Organization (Direct or
Subsidiary or Organization or Acquisition Indirect)
--------------------------- --------------- -------------- ---------
1.Global Oro LLC Delaware 2003 100%
2.Global Plata LLC Delaware 2003 100%
3.Global Gold Mining LLC Delaware 2003 100%
4.Global Gold Hankavan LLC Armenia 2003 100%
5.Mego-Gold LLC Armenia 2005 100%
6.Getik Mining Company LLC Armenia 2006 80%
7.Global Gold Uranium LLC Delaware 2007 100%
8.Global Gold Armenia, LLC Delaware 2003 100%
9.Global Gold Chile Limited Chile 2004 100%
EX-31
9
ex311.txt
CEO CERT.
Exhibit 31.1
Section 906 of the Sarbanes-Oxley Act of 2002
CERTIFICATIONS
I, Van Z Krikorian, certify that:
1) I have reviewed this Annual Report on Form 10-KSB of Global Gold Corporation
for the year ended December 31, 2006;
2) Based on my knowledge, this Annual 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 Annual
Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the years presented in this Annual Report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 Annual Report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this Annual Report based on such evaluations; and
c) Disclosed in this Annual Report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal year that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5) The registrant's other certifying officers and I have disclosed, based on our
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.
6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 30, 2007 /s/ Van Z. Krikorian
Van Z. Krikorian
Chairman and Chief Executive Officer
EX-31
10
ex312.txt
CFO CERT.
Exhibit 31.2
Section 906 of the Sarbanes-Oxley Act of 2002
CERTIFICATIONS
I, Lester S. Caesar, certify that:
1) I have reviewed this Annual Report on Form 10-KSB of Global Gold Corporation
for the year ended December 31, 2006;
2) Based on my knowledge, this Annual 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 Annual
Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the years presented in this Annual Report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 Annual Report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this Annual Report based on such evaluations; and
c) Disclosed in this Annual Report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal year that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5) The registrant's other certifying officers and I have disclosed, based on our
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.
6) The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 30, 2007 /s/ Lester S. Caesar
Lester S. Caesar, CPA
Chief Financial Officer
EX-32
11
ex321.txt
SEC. 1350 CEO CERT.
Exhibit 32.1
CERTIFICATION 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 of Global Gold Corporation (the "Company")
on Form 10-KSB for the year December 31, 2006 as filed with the Securities and
Exchange Commission (the "Report"), I, Van Z. Krikorian, the Chairman and Chief
Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(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.
Date: March 30, 2007 /s/ Van Z. Krikorian
Van Z. Krikorian
Chairman and Chief Executive Officer
EX-32
12
ex322.txt
SEC. 1350 CFO CERT.
Exhibit 32.2
CERTIFICATION 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 of Global Gold Corporation (the "Company")
on Form 10-KSB for the year December 31, 2006 as filed with the Securities and
Exchange Commission (the "Report"), I, Lester S. Caesar, CPA, the Chief
Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(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.
Date: March 30, 2007 /s/ Lester S. Caesar
Lester S. Caesar, CPA
Chief Financial Officer
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