Page 6 of 7 – SEC Filing
Item 1. Security and Issuer.
This Schedule
13D (this “Schedule 13D”) relates to shares of Class A common stock, no par value per share (the
“Common Stock”), of Gold Reserve Inc., a foreign private issuer (the “Issuer”). The principal
executive office of the Issuer is 926 West Sprague Avenue, Suite 200, Spokane, Washington 99201.
Item 2. Identity and Background.
This Schedule
13D is filed on behalf of Steelhead Partners, LLC (“Steelhead”), Steelhead Navigator Master, L.P.
(“Steelhead Navigator”), James Michael Johnston and Brian Katz Klein. Steelhead, Steelhead Navigator, Mr.
Johnston and Mr. Klein are referred to collectively herein as the “Reporting Persons.”
The principal
business address of Steelhead, Mr. Johnston and Mr. Klein is 333 108th Avenue NE, Suite 2010, Bellevue, WA 98004. The
principal business address of Steelhead Navigator is c/o Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands.
Steelhead
Navigator is an exempted limited partnership, whose investment manager is Steelhead and whose general partner is Steelhead
Navigator Cayman GP, Ltd., a Cayman Islands exempted company, the sole shareholder of which is Steelhead. Steelhead is an investment
adviser registered as such with the Securities and Exchange Commission (“SEC”). Mr. Johnston and Mr. Klein are
Steelhead’s member-managers.
None of Steelhead,
Steelhead Navigator, Mr. Johnston or Mr. Klein has during the past five years, been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors).
None of Steelhead,
Steelhead Navigator, Mr. Johnston or Mr. Klein has, during the past five years, been a party to a civil proceeding of a judicial
or administrativebody of competent jurisdiction, as a result of which any of them became or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Steelhead is a Delaware
limited liability company, Steelhead Navigator is a Cayman Islands exempted limited partnership, and Mr. Johnston and Mr. Klein
are United States citizens.
Item 3. Source and Amount
of Funds or Other Consideration.
The source
of funds used to purchase 3,611,893 shares of Common Stock reported on this Schedule 13D was the working capital of
Steelhead Navigator or margin borrowings described below. The amount of funds used to purchase such shares of Common Stock
was approximately $5,082,454. No funds or other consideration were used to acquire the remaining shares of Common Stock or
other securities described herein. 5,332,680 shares were acquired by Steelhead Navigator through conversion of certain
convertible notes held by Steelhead Navigator. 1,555,351 shares were acquired by another client account managed by Steelhead
through an in-kind distribution from Steelhead Navigator at a cost of $5,315,853. Shares of Common Stock may be held by
Steelhead Navigator in a commingled margin account, which may extend margin credit to Steelhead Navigator from time to time,
subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions
held in each margin account are pledged as collateral security for the repayment of debit balances in such account. The
margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because
other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to
purchase the Common Stock reported herein.
Item 4. Purpose
of Transaction.
Steelhead
reached an agreement with the Issuer on August 23, 2017 regarding how Steelhead will vote the shares of Common
Stock beneficially owned by Steelhead Navigator and another client account that holds Common Stock at the upcoming annual
meeting of shareholders to be held on August 29, 2017. Attached as Exhibit 1 is a letter to shareholders of the
Issuer that provides details of this agreement.
The reporting
persons may engage in communications with one or more officers of the Issuer and/or one or more members of the Board of
Directors of the Issuer, including, by not limited to, for purposes of discussing the Issuer’s operations.
Although the reporting
persons have no specific plan or proposal to acquire or dispose of the securities of the Issuer, consistent with their investment
purposes, the reporting persons at any time and from time to time, may acquire additional securities or dispose of any or all of
their securities depending upon an ongoing evaluation of the investment in the securities, prevailing market conditions and other
investment opportunities.
Except
as indicated above, none of the reporting persons has any plans or proposals which relate to, or could result in, any of the
matters referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D. The reporting persons may, at any time and from
time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with
respect thereto.
Item 5. Interest in Securities
of the Issuer.
(a) Steelhead
Navigator beneficially owns 8,944,573 shares of Common Stock, and the percentage of Common Stock beneficially owned by
Steelhead Navigator is 9.2%.
Steelhead, as
(i) the investment manager of Steelhead Navigator and another client account that holds Issuer Common Stock, and (ii) the
sole member of Steelhead Navigator’s general partner, and Mr. Johnston and Mr. Klein, as the member-managers of
Steelhead, may be deemed to beneficially own the shares owned by Steelhead Navigator and such other client account in that
they may be deemed to have the power to direct the voting or disposition of the shares owned by Steelhead Navigator and held
in such other client account. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to
constitute an admission that any of Steelhead, Mr. Johnston or Mr. Klein is, for any other purpose, the beneficial owner of
any such securities, and Steelhead, Mr. Johnston and Mr. Klein disclaim beneficial ownership as to such securities except
to the extent of their respective pecuniary interests therein. For the purposes of this Schedule 13D, Steelhead, Mr.
Johnston and Mr. Klein beneficially own 10,499,924 shares of Common Stock (which is comprised of the shares of Common Stock
owned by Steelhead Navigator and the other client account managed by Steelhead), and the percentage of Common Stock
beneficially owned by such reporting persons is 10.8%.
The
calculation of percentage of beneficial ownership in this paragraph (a) and Item 13 of pages 2 – 5 of this Schedule 13D
was derived from the Issuer’s Form 6-K filed with the SEC on August 11, 2017, in which the Issuer stated that a total
of approximately 97.5 million shares of Common Stock were issued and outstanding following the conversion of certain
convertible notes into shares of Common Stock.
(b) Reference
is made hereby to Items 7 to 10 of pages 2 – 5 of this Schedule, which Items are incorporated herein by reference.
(c) On
August 8, 2017, Steelhead Navigator provided notice to the Issuer of its intention to convert $5,083,966 in principal of the
11% senior secured convertible notes due 2018 (the “Notes”) held by Steelhead Navigator. The Issuer had the option of
delivering shares of Common Stock or cash upon conversion. On August 10, 2017, the Issuer informed Steelhead that it would be
delivering 1,694,655 shares of Common Stock for this conversion.
(d)
Certain special purpose liquidating vehicles (“SPVs”) that are managed by Steelhead have interests
(through participation rights) in the securities of the Issuer held by Steelhead Navigator (i.e., the right to receive
dividends from, or the proceeds from the sale of, such securities). No such interests relate to 5% or more of a class of the
securities. Interests in the SPVs are held by investors that have withdrawn from Steelhead Navigator. Except as set forth above, no
other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from
the sale of, securities covered by this Schedule 13D.
(e) Not applicable.
Item 6. Contracts, Arrangements,
Understandings or Relationships with Respect to Securities of the Issuer.
On August 23,
2017, Steelhead
reached an agreement with the Issuer regarding how Steelhead will vote the shares of Common
Stock beneficially owned by Steelhead Navigator and another client account that holds Common Stock at the upcoming annual
meeting of shareholders to be held on August 29, 2017. Attached as Exhibit 1 is a letter to shareholders of the
Issuer that provides details of this agreement.
On December 2,
2015, the Issuer filed a 6-K with the SEC indicating that the Issuer and certain parties, including Steelhead Navigator as a
holder of the Issuer’s previously modified Notes (the “Notes”), had closed a financing and third
restructuring transaction (the “Third Restructuring Transaction”) pursuant to the Note Restructuring and Note
Purchase Agreement (the “Third Restructuring Agreement”). Based on the revised conversion rate set forth in the
Fourth Supplemental Indenture, attached as Exhibit E to the Third Restructuring Agreement, 6,493,372 shares of Common Stock
would have been issued to Steelhead Navigator upon the conversion of the Notes held by Steelhead Navigator. Pursuant to the
Third Restructuring Transaction, Steelhead Navigator also received (and continues to hold) a 3.506% contingent value right
entitling it to this percentage of certain net proceeds from a mining data sale or arbitration award.
On December
21, 2016, Steelhead Navigator converted $6,493,372 in principal of the Notes and received 2,164,457 shares of Common Stock. On July 12, 2017, Steelhead Navigator converted $4,420,705 in principal of the Notes and received 1,473,568 shares
of Common Stock. On August 8, 2017, Steelhead Navigator converted $5,083,966 in principal of Notes and received 1,694,655
shares of Common Stock. In addition, on July 14, 2017, Steelhead Navigator returned for redemption $1,619,542 in principal
amount of Notes for a cash redemption premium and on August 10, 2017, Steelhead Navigator returned for redemption $1,862,531
in principal amount of Notes for a cash redemption premium. Steelhead Navigator no longer holds any Notes as of the date of
this filing.
Previously,
as described in the Schedule 13D filed by the Reporting Persons on June 20, 2014, on June 20, 2014, the Issuer filed a 6-K
with the SEC indicating that the issuer and certain parties, including Steelhead Navigator as a holder of the Notes, had
closed a financing and second restructuring transaction (the “Second Restructuring Transaction”) pursuant to the
Subordinated Note Restructuring and Note Purchase Agreement (the “Second Restructuring Agreement”), whereby the
Notes held by Steelhead Navigator were restructured for a second time.
Previously, as
described in the Schedule 13D filed by the Reporting Persons on December 14, 2012, on September 18, 2012 the Issuer filed a
Schedule TO with the SEC relating to the offer to certain holders of the Notes to
participate in an initial restructuring of such Notes. According to the Issuer’s Schedule TO, as amended
and supplemented, holders of approximately 98.7% of the outstanding Notes (the “Large Noteholders”),
including Steelhead Navigator, agreed to the terms of a restructuring transaction (the “First Restructuring
Transaction” and together with the Third Restructuring Transaction and the Second Restructuring Transaction, the
“Restructuring Transactions”) pursuant to the Second Amended and Restated Subordinated Note Restructuring Agreement dated September
13, 2012, among the Issuer and the Large Noteholders (the “First Restructuring Agreement”), whereby the Notes
held by the Large Noteholders were first restructured.
Item 7. Material to Be
Filed as Exhibits.
| No. | Exhibit |
| 1. | Letter to Shareholders dated August 23, 2017 |
| 2. | Agreement Regarding Joint Filing of Statement on Schedule 13D |
| 3. | Second Amended and Restated Subordinated Note Restructuring Agreement, dated September 13, 2012* |
| 4. | Subordinated Note Restructuring and Note Purchase Agreement, dated June 18, 2014** |
| 5. | Second Supplemental Indenture*** |
| 6. | Note Restructuring and Note Purchase Agreement, dated as of November 30, 2015**** |
| 7. | Fourth Supplemental Indenture***** |
______________
*Filed as Exhibit 99.1 to the Issuer’s
Form 6-K filed with the SEC on September 18, 2012 and incorporated by reference herein.
** Filed as Exhibit 99.1 to the Issuer’s
Form 6-K filed with the SEC on June 20, 2014 and incorporated by reference herein.
***Filed as Exhibit 99.2 to the Issuer’s
Form 6-K filed with the SEC on June 20, 2014 and incorporated by reference herein.
****Filed as Exhibit 99.1 to the
Issuer’s Form 6-K filed with the SEC on December 2, 2015 and incorporated by reference herein.
*****Filed as Exhibit 99.2 to the Issuer’s
Form 6-K filed with the SEC on December 2, 2015 and incorporated by reference herein.
Signature
After reasonable
inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete
and correct.
| Dated: August 23, 2017 | STEELHEAD PARTNERS, LLC By: _/s/ Brent Brent Binge, General Counsel |
| STEELHEAD NAVIGATOR MASTER, L.P. By: /s/ Brent E. Binge__________ Brent Binge, General Counsel | |
| JAMES MICHAEL JOHNSTON /s/ Brent E. Binge_____________________ Brent Binge, Attorney-In-Fact for James Michael Johnston* | |
| BRIAN KATZ KLEIN /s/ Brent E. Binge______________________ Brent Binge, Attorney-In-Fact for Brian Katz Klein** |
* Power of Attorney was previously filed with the SEC as Exhibit 2 to Amendment No. 6 to the Schedule 13D filed by Steelhead
Partners, LLC with respect to Sonde Resources Corp. on October 26, 2011.
** Power of Attorney was previously filed with the
SEC as Exhibit 3 to Amendment No. 6 to the Schedule 13D filed by Steelhead Partners, LLC with respect to Sonde Resources Corp.
on October 26, 2011.
