v3.26.1
MERGER AGREEMENT
 9 Months Ended
May 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
MERGER AGREEMENT

NOTE 2 – MERGER AGREEMENT

 

As previously announced in an 8-K filing with the SEC on March 5, 2026, the Company entered into an Agreement and Plan of Merger dated March 4, 2026 (“Merger Agreement”) with USAR, Hamer Merger Sub, Inc., a wholly owned subsidiary of USAR (“Merger Sub 1”), and Hamer Merger Sub, LLC, a wholly owned subsidiary of USAR (“Merger Sub 2”). Pursuant to the Merger Agreement, the Company will enter into a series of mergers with Merger Sub 1 and Merger Sub 2 that will result in the business of the Company being held by a wholly owned subsidiary of USAR, and the common stock of the Company being converted into the right to receive the merger consideration described below (“Transaction”).

 

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions found in the Merger Agreement, the following steps will occur as part of a single integrated transaction on the closing date of the Merger (“Closing”).

 

  (a) Merger Sub 1 will merge with and into the Company (the “First Merger”), the separate existence of Merger Sub 1 will cease, and the Company will be the surviving corporation of the First Merger and a wholly owned subsidiary of USAR;
     
  (b) the surviving corporation of the First Merger will merge with and into Merger Sub 2 (the “Second Merger”), the separate existence of that surviving corporation will cease, and Merger Sub 2 will be the surviving company of the Second Merger and a wholly owned subsidiary of USAR that holds all of the assets of the Company;
     
  (c) all of the issued and outstanding shares of Company common stock prior to the effective time of the First Merger will be converted into the right to receive a fraction of a share of common stock of USAR determined as described below; and
     
  (d) USAR will issue to the holders of Company common stock an aggregate of 3,823,328 shares of USAR common stock pro rata according to the number of shares of Company common stock owned.

 

Under the Merger Agreement, each share of Company common stock that is issued and outstanding immediately prior to the effective time of the First Merger (excluding any shares of Company common stock as to which dissenters’ rights have been properly exercised and shares of Company common stock owned by USAR, the Company or any of their respective direct or indirect wholly owned subsidiaries) shall automatically be converted into the right to receive that portion of a validly issued, fully paid and nonassessable share of USAR common stock equal to the quotient obtained by dividing (a) 3,823,328 by (b) the aggregate number of shares of Company common stock outstanding on a fully diluted basis at the effective time of the First Merger.

 

Our board of directors has approved and declared advisable the Merger Agreement and the Transaction and resolved to recommend that our stockholders approve the Merger Agreement, the Transaction and related matters.

 

In connection with the execution of the Merger Agreement, the Company and USAR entered into a voting and support agreement (each, a “Voting and Support Agreement”) with each member of the Company’s board of directors and each of the Company’s executive officers. Pursuant to the Voting and Support Agreements, among other things, all of the Company’s directors and executive officers agreed to vote all of their shares of Company common stock in favor of the various proposals related to the Transaction and the Merger Agreement and any other matters necessary or reasonably requested by USAR for consummation of the Transaction and against any action reasonably expected to impede, delay or materially and adversely affect the Transaction.

 

The Merger Agreement contains customary representations, warranties and covenants as well as conditions to Closing. One of the Closing conditions is that the Carlisle mine and related real estate is transferred to Mr. Gorski at or prior to Closing in consideration for the cancellation and discharge of the $75,000 promissory note owed by the Company to Mr. Gorski. Additionally, the Merger Agreement provides for termination rights and sets forth a termination fee equal to $3,250,000 owed by the Company to USAR under certain circumstances.