Firstgold Corp. - Form 8-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): March 16,
2007
FIRSTGOLD
CORP.
(Exact
Name of Registrant as Specified in Charter)
(formerly
Newgold, Inc.)
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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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3108
Gabbert Drive, Suite 201
Cameron
Park, CA
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95682
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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: (530) 677-5974
Newgold,
Inc.
400
Capital Mall, Suite 900, Sacramento, CA 95814
(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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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, Firstgold Corp. (formerly Newgold, Inc.) entered into a
Securities Purchase Agreement (the “Purchase Agreement”) and a Registration
Rights Agreement (the “Registration Rights Agreement”) with Cornell Capital
Partners, L.P. (“Cornell Capital”) 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 Firstgold 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 November 1, 2006 amended Purchase Agreement, Firstgold issued a Secured
Convertible Debenture on September 26, 2006 for gross proceeds of $1,000,000.
On
December 1, 2006, Firstgold issued a second Secured Convertible Debenture for
gross proceeds of $1,000,000.
On
March
16, 2007, the parties to the Purchase Agreement agreed to change the date for
issuance of the third and final Secured Convertible Debenture from the date
the
Company’s currently pending SB-2 Registration Statement was declared effective
by the SEC to the new issue date of March 16, 2007. Consequently, on March
16,
2007, Firstgold issued the third and final Secured Convertible Debenture for
gross proceeds of $1,000,000. Net proceeds of $910,000 were disbursed to
Firstgold on March 19, 2007.
As
part
of the March 16, 2007 amendment, Firstgold amended the warrants to acquire
1,500,000 shares of the Company’s common stock held by Cornell Capital to reduce
the exercise price from $0.60/share to $0.45/share.
Item
2.03 Creation
of a Direct Financial Obligation
See
Item
1.01 above, which disclosures are incorporated herein by reference. The Secured
Debentures 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 Firstgold 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 lowest
average bid price occurring during the 30 days prior to 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).
Firstgold may repay the debt early by paying a Redemption Premium equal to
10%
of the principal amount being redeemed plus accrued interest
thereon.
Cornell
Capital also
has
a right to participate in any future financings by Firstgold occurring between
September 26, 2006 and March 25, 2008.
The
Debentures are secured by the general assets of the Company and 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 March 16, 2007 Debenture and Amended Warrants were 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:
March 21, 2007
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FIRSTGOLD
CORP.
By:
/s/ James
Kluber
James
Kluber, Chief Financial Officer
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