By Sheri Kasprzak
New York, Sept. 29 - Newgold, Inc. settled a $2.2 million private placement of convertible debentures with Cornell Capital Partners, LP.
The 8% debentures are due Sept. 26, 2009 and are convertible into common shares at the lesser of $0.4735 or 95% of the lowest volume weighted average price for the 30 trading days before conversion.
The investor will also receive warrants for 2,527,777 shares. Of those warrants, 1,444,444 will be exercisable at $0.45 each and 1,083,333 will be exercisable at $0.60 each for four years.
So far, $1 million in principal of the debentures has been funded. Another $600,000 will be funded once a registration statement is filed with the Securities and Exchange Commission, and the final $600,000 will be funded once the statement is declared effective.
Based in Sacramento, Calif., Newgold is a gold exploration company.
| Issuer: | Newgold, Inc.
|
| Issue: | Convertible debentures
|
| Amount: | $2.2 million
|
| Maturity: | Sept. 26, 2009
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Conversion price: | The lesser of $0.4735 or 95% of the lowest VWAP for the 30 trading days before conversion
|
| Warrants: | For 2,527,777 shares
|
| Warrant expiration: | Four years
|
| Warrant strike price: | $0.45 for 1,444,444 shares; $0.60 for 1,083,333 shares
|
| Investor: | Cornell Capital Partners, LP
|
| Settlement date: | Sept. 26
|
| Stock symbol: | OTCBB: NGLD
|
| Stock price: | $0.37 at close Sept. 26
|
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