Newgold, Inc. - Form 8K/A
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): September 26,
2006
NEWGOLD,
INC.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-20722
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16-1400479
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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400
Capitol Mall, Suite 900
Sacramento,
CA
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95814
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (916) 449-3913
Same
(Former
name or Former Address, if Changed Since Last Report.)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement
Private
Placement
On
September 26, 2006, Newgold entered into a Securities Purchase Agreement (the
“Purchase Agreement”) and a Registration Rights Agreement (the “Registration
Rights Agreement”) in connection with a private placement of convertible
debentures, in the aggregate principal amount of $2,200,000 and bearing interest
of 8% per annum (the “Debentures”). On November 1, 2006 the Purchase Agreement
was amended to increase the aggregate principal amount of the convertible
debentures to $3,000,000. The Debentures will be funded $1,000,000 at the
closing, $1,000,000 upon the filing of a resale registration statement with
the
Securities and Exchange Commission and $1,000,000 upon the registration
statement being declared effective. The Debentures will be due and payable
in
three years from the date of issue unless converted into shares of the Company’s
common stock or repaid prior to their expiration date. The maximum conversion
rate is $0.4735 per share subject to certain adjustments. Additionally, pursuant
to the amended Purchase Agreement, the investor was issued warrants (the
“Warrants”) to purchase an aggregate of 3,500,000 shares of Newgold common stock
with 2,000,000 warrants exercisable at $0.45 per share and 1,500,000 warrants
exercisable at $0.60 per share. The Warrants have a term of four years and
are
immediately exercisable.
Pursuant
to the Registration Rights Agreement, the Company is obligated to file a
registration statement with the Securities and Exchange Commission within 30
days of the closing of the transaction covering the possible resale from time
to
time in the future of the shares of common stock underlying the Debentures
and
the Warrants. The Registration Rights Agreement provides for certain penalties
to the Company if the registration statement is not filed or does not become
effective before dates specified in that agreement. Each of the Company and
the
investor has agreed to indemnify the other party and certain affiliates against
certain liabilities related to the registration statement.
Yorkville
Advisors LLC acted as advisor for the financing and received customary due
diligence and structuring fees based on the aggregate gross proceeds of the
transaction.
Item
2.03 Creation
of a Direct Financial Obligation
See
Item
1.01 above, which disclosures are incorporated herein by reference. When fully
funded, the secured Debentures will represent $3,000,000 of debt owed by the
Company. The Debentures bear interest at an annual rate of 8% which accrues
until the maturity date which is three years from the date of issue at which
time all principal and accrued interest not previously converted into Newgold
common stock or repaid, will be due and payable. Both principal and interest
are
convertible into shares of the Company’s common stock at a 5% discount from the
average bid price existing at the time of conversion or $0.4735 per share,
whichever, is lower. The $0.4735 price per share is subject to adjustment for
stock splits, dividends or if securities of the Company are sold at a price
below $0.4735 per share (with certain exceptions). Newgold
may
repay
the debt early by paying a Redemption Premium equal to 10% of the principal
amount being redeemed plus accrued interest thereon.
The
investor also has a right to participate in any future financings by Newgold
occurring after 18 months following the closing.
The
Debenture is secured by 146 unpatented mining claims existing on the Company’s
Relief Canyon mining property located in Pershing County, Nevada. In
addition, the Company has pledged an additional 10,000,000 shares
of its common stock which could be issued to the investor in the event of a
default depending on how much of the Debenture principal and interest remained
at the time of the default.
Item
3.02 Recent
Sales of Unregistered Securities
See
Item
1.01 above, which disclosures are incorporated herein by reference. The issuance
of the Debenture and Warrants was completed in accordance with the exemption
provided by Rule 506 of Regulation D of the Securities Act of 1933 and/or
Section 4(6) of the Securities Act of 1933, as amended. The investor represented
that it is an accredited investor, as defined in Rule 501 of Regulation D,
and
that it was acquiring the securities for its own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof
in
violation of the Securities Act.
Item
9.01 Financial
Statements and Exhibits
Exhibits.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date:
November 24, 2006
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NEWGOLD,
INC.
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By:
/s/ A. SCOTT DOCKTER
A.
Scott Dockter, President
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