UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 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) February 28,
2006
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New
Century Companies, Inc.
(Exact
name of registrant as specified in its chapter)
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Delaware
(State
or other jurisdiction
of
incorporation
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000-09459
(Commission
File
Number)
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06-10345787
(IRS
Employer
Identification
No.)
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9835
Santa Fe Springs Road
Santa
Fe Springs, CA
(Address
of principal executive offices)
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90670
(Zip
Code)
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Registrant's
telephone number, including area code (562) 906-8455
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N/A
(Former
name or former address, if changed since last
report)
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Section
1 - Registrant’s Business and Operations
Item
1.01 - Entry into a Material Definitive Agreement
On
February 28, 2006, New Century Companies, Inc. (the “Company”) entered into a
Securities Purchase Agreement (the “Agreement”) with CAMOFI Master LDC (the
“Purchaser”) whereby the Company agreed to sell, and the Purchaser agreed to
purchase, up to $5,000,000 aggregate principal amount of 12% Senior Secured
Convertible Notes due February 28, 2009 (up to $3,500,000 to be purchased at
the
Closing and up to an additional $1,500,000 to be purchased pursuant to an
Additional Investment Right), secured by a first priority lien on all assets
of
the Company and its current and future subsidiaries (including a pledge of
the
shares of the Company’s current and future Subsidiaries). In conjunction with
the Agreement, the Company, its subsidiary, and the Purchaser entered into
the
following attendant agreements, all dated February 28, 2006:
· |
12%
Senior Secured Convertible Note for $3,500,000 due February 28, 2009
(the
“Notes”);
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· |
Security
Agreement between the Company and its current and future subsidiaries
on
the one hand and the Purchaser on the other
hand;
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· |
Common
Stock Purchase Warrant granting the Purchaser warrants to purchase
3,476,190 shares of common stock of the Company at an exercise price
of
$0.63 for a term of seven years (the
“Warrants”);
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· |
Twelve
month lock-agreements with certain Company
shareholders;
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· |
Registration
Rights Agreement whereby, within 45 days, the Company shall prepare
and
file with the Securities and Exchange Commission a Registration Statement
covering the resale of 125% of the following securities (collectively,
the
“Registrable Securities”) of the Purchaser for an offering to be made on a
continuous basis pursuant to Rule 415: (i) all of the shares of common
Stock issuable upon conversion of the Note or as interest on the Notes
assuming all of the Notes are converted and all permissible interest
payments are made in shares of common stock and the Notes are held
until
maturity, (ii) all shares issuable as amortization payments on the
Notes
assuming all permissible amortization payments are made in shares of
common stock and the Notes are held until maturity, (iii) all shares
of
common stock underlying the Warrants, (iv) any securities issued or
issuable upon any stock split, dividend or other distribution
recapitalization or similar event with respect to the foregoing; and
(v)
any additional shares issuable in connection with any anti-dilution
provisions in the Notes or the Warrants, including a liquidated damages
clause whereby if certain deadlines for filing, responding and
effectiveness of the Registration Statement (each, an “Event Date”) are
not met, the Company shall pay to the Purchaser an amount in cash equal
to
1.5% of the outstanding principal of the Notes for any Registrable
Securities then held by the Purchaser for the first 30 days (or part
thereof) after the Event Date and an additional 1.5% for any subsequent
30-day period (or part thereof), thereafter;
and
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· |
Escrow
Agreement and side letter between the Purchaser and Katten Muchin Rosenman
LLP (the “Escrow Agent”).
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There
is
no material relationship between the Company or its affiliates and any of the
parties, other than with respect to this transaction.
Section
2 - Financial Information
Item
2.03 - Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On
February 28, 2006, the Company entered into a 12% Senior Secured Convertible
Note for $3,500,000 due February 28, 2009 with 12% interest (the “Note”). In the
event that (i) the Company shall sell all or a portion of its assets, (ii)
the
Company shall be subject to a change of control transaction or (iii) Quilite
International LLC’s audited financial statement are materially worse than its
unaudited financial statements, the Company shall be required to repay the
Notes
at 120% of the principal amount thereof plus accrued interest to the date of
repayment. If any event of default occurs, the full principal amount of the
Note, together with interest and other amounts owing in respect thereof, to
the
date of acceleration shall become, at the Purchaser’s election, immediately due
and payable in cash.
Section
3 - Securities and Trading Markets
Item
3.02 - Unregistered Sales of Equity Securities
Pursuant
to the Agreement, the Company issued to the Purchaser: (i) 12% Senior Secured
Convertible Note for $3,500,000 due February 28, 2009 (the “Note”) which is
convertible into that shares of common stock of the Company at a conversion
price of $0.63 per share; and (ii) Common Stock Purchase Warrant granting the
Purchaser warrants to purchase 3,476,190 shares of common stock of the Company
at an exercise price of $0.63 for a term of seven years. The Company relied
on
the exemption from registration relating to offerings that do not involve any
public offering pursuant to Section 4(2) under the Securities Act of 1933 (the
“Act”) and/or Rule 506 of Regulation D promulgated pursuant thereto. The Company
believes that the Purchaser is an “accredited investor” under Rule 501 under
Regulation D of the Act and had adequate access to information about the
Company.
SIGNATURES
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 thereunto
duly authorized.
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NEW
CENTURY
COMPANIES, INC |
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Dated: March
6, 2006 |
By: |
/s/ David
Duquette |
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David
Duquette |
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President
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