LODE-STAR Announces Rescission of Sapir Pharmaceuticals Agreements, Debt Reinstatement and Debt Conversions

Rhea-AI Summary

Lode-Star Mining Inc. (LSMG) has rescinded its asset purchase and royalty agreements with Sapir Pharmaceuticals due to unforeseen circumstances, returning both parties to their pre-agreement states. This rescission means LSMG will no longer issue 1,000,000 shares of preferred stock to Sapir. Additionally, LSMG reinstated approximately $2.224 million in debt to its controlling shareholder, Lode Star Gold, Inc., and converted over $2.6 million in accrued debt into over 70 million shares at $0.037 each, affecting common stock circulation.

Positive

• LSMG rescinded agreements with Sapir, avoiding the issuance of 1,000,000 preferred shares.
• Debt reinstatement ensures LSMG maintains financial commitments with its controlling shareholder.

Negative

• The reinstatement of approximately $2.224 million in debt could strain LSMG's future cash flows.
• Conversion of debt into equity may dilute existing shareholders' stakes.

RENO, NV / ACCESSWIRE / June 13, 2022 / Lode-Star Mining Inc. ("LSMG" or the "Company") (OTCQB:LSMG) is pleased to announce that the Company and Sapir Pharmaceuticals, Inc. ("Sapir") have entered into an agreement in order to formally rescind the asset purchase agreement (the "APA") and royalty agreement between LSMG and Sapir dated December 23, 2021 (together, the "Sapir Agreements").

The rescission of the Sapir Agreements was prompted by circumstances beyond either party's control, and has the effect of putting each party in the place it occupied prior to the execution and delivery of the two agreements. In particular, and as described in the Company's press release dated December 30, 2021, the Company is no longer required to issue the 1,000,000 shares of newly-designated Series A Preferred Stock to Sapir as contemplated in the APA, and will retain no right, title or interest in and to the business of Sapir that was originally acquired by LSMG upon the closing of the APA.

The recission agreement includes standard indemnity provisions and a broad mutual release, and allows the Company to continue to seek opportunities for maximizing shareholder value.

Promptly following the rescission of the Sapir Agreements, the Company entered into a debt reinstatement agreement with Lode Star Gold, Inc., the controlling shareholder of the Company ("LSG"), pursuant to which the Company agreed to reinstate the approximately $2.224 million in accrued, unpaid penalty and other payments (collectively, the "Debt") previously owing by the Company to LSG under a mineral option agreement between the parties (the "Option Agreement"). The Debt was originally forgiven by LSG under a settlement and termination agreement between the parties that provided for, among other things, the immediate termination of the Option Agreement (with the exception of certain standard provisions that survived according to their terms) and the return to LSG of the Company's 20% undivided interest in and to the property that was the subject of the Option Agreement.

In connection with the reinstatement of the Debt, the Company entered into debt conversion agreements with three related parties, including LSG, pursuant to which the creditors converted an aggregate of $2,601,207.55 in accrued, unpaid debt into 70,302,906 shares of the Company's common stock (collectively, the "Conversion Shares") at a price of $0.037 per share. The identities of the creditors and the particulars of the debt conversions are described in the Company's current report on Form 8-K disclosing each of the transactions noted in this news release.

The Conversion Shares are "restricted securities" under the Securities Act of 1933, as amended, and bear all restrictive legends required under applicable securities laws.

Contacts for Lode-Star Mining INC.

Mark Walmesley
President
Lode-Star Mining, Inc.
phone : (775) 234-5443
e-mail : markw@lode-starmining.com

Forward Looking Statements

This news release may contain forward-looking statements that involve known and unknown risks, uncertainties and other factors which may cause LSMG's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements. Forward-looking statements reflect LSMG's current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, investors should not place undue reliance on these forward-looking statements. Except as required by law, LSMG assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

SOURCE: Lode-Star Mining Inc.

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https://www.accesswire.com/704942/LODE-STAR-Announces-Rescission-of-Sapir-Pharmaceuticals-Agreements-Debt-Reinstatement-and-Debt-Conversions

FAQ

What agreement did Lode-Star Mining Inc. rescind?

Lode-Star Mining Inc. rescinded its asset purchase and royalty agreements with Sapir Pharmaceuticals.

What is the total amount of debt reinstated by LSMG?

LSMG reinstated approximately $2.224 million in accrued unpaid debt.

How many shares were issued as a result of debt conversion by LSMG?

LSMG converted over $2.6 million in debt into approximately 70,302,906 shares of common stock.

What was the conversion price per share for LSMG's debt?

The conversion price per share for LSMG's debt was $0.037.