UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C 20549
SCHEDULE
14A
(Rule
14a-101)
Proxy
Statement Pursuant To Section 14(A) of the Securities
Exchange
Act of 1934
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appropriate box:
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Preliminary
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Confidential,
For Use of the Commission Only (as permitted by Rule
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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NEVADA GOLD HOLDINGS, INC.
(Name of
Registrant As Specified In Its Charter)
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of Filing Fee (Check the appropriate box):
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Exchange Act Rules 14a-6(i)(1) and
0-11.
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unit price or other underlying value of transaction computed pursuant to
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NEVADA
GOLD HOLDINGS, INC.
1640
Terrace Way
Walnut
Creek, CA 94597
NOTICE OF
CONSENT SOLICITATION
To the
stockholders of Nevada Gold Holdings, Inc.:
Notice is
hereby given that we are seeking the written consent of stockholders holding a
majority of our outstanding common stock acting in lieu of a special meeting
(the “Consent”) to authorize and approve the following proposals:
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1.
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An
amendment of our Certificate of Incorporation to effect a one-for-fifteen
(1:15) reverse stock split (the “Reverse Split”) of our common stock,
$0.001 par value per share; and
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2.
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An
amendment to our 2008 Equity Incentive Plan (the “2008 Plan”) to increase
the total number of shares of our common stock that may be granted
pursuant to awards under such 2008 Plan from 266,666 (after adjustment for
the Reverse Split) to 3,000,000 and to add a provision for automatic
annual increases based on increases in our
capitalization.
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The
amendment of our Certificate of Incorporation and the amendment of the 2008 Plan
were approved on June 21, 2010 and July 27, 2010, respectively, by the unanimous
written consent of our board of directors.
The
amendment of our Certificate of Incorporation will not be effective until the
Certificate of Amendment is filed with the Secretary of State of the State of
Delaware. We intend to file this document as soon as practicable
after (i) receiving the required Consent, and (ii) receiving approval of the
Reverse Split from FINRA.
Our Board
of Directors has determined to seek approval of the two proposals described
herein by majority written consent of our stockholders. The Board of Directors
believes that certain large holders, members of the Board of Directors and our
executive officers may consent to the two proposals, although there has been no
formal request or agreement with respect to their authorization or
consent. Approximately 24,276,000 shares of our common stock are
believed to be controlled by our officers, directors and 10% or greater
stockholders as of August 6, 2010, the record date for such actions. We are not
holding a meeting of stockholders in connection with the two proposals described
herein. The Consent Solicitation Statement on the following pages
describes the matters presented to stockholders in this consent solicitation.
The Board of Directors requests that you sign, date and return the consent
included as
Annex
A
to the Consent Solicitation Statement in the enclosed envelope (or
submit your consent by telephone or via the internet) as soon as
possible. If you submit a properly executed written consent within 60
days of the earliest dated consent, then your stock will be voted in favor of
the proposed transaction.
The date
of this Consent Solicitation Statement is [________, 2010], and it is being
mailed on or about [_____, 2010], to all stockholders of record of our common
stock as of the close of business on August 6, 2010. Each of the two proposals
requires the consent of stockholders holding a majority of the outstanding
shares of our common stock for its approval. The actions to be taken pursuant to
the written consent shall be taken as soon as practicable after both (i) we
receive properly executed written consents from stockholders holding a majority
of the outstanding shares of our common stock as of the record date and (ii) we
receive approval of the Reverse Split from FINRA.
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By
Order of the Board of Directors,
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David
Rector
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Chief
Executive Officer and Director
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[________
__, 2010]
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NEVADA
GOLD HOLDINGS, INC.
1640
Terrace Way
Walnut
Creek, CA 94597
CONSENT
SOLICITATION STATEMENT
[______
__, 2010]
This
Consent Solicitation Statement is being furnished to stockholders of Nevada Gold
Holdings, Inc., a Delaware corporation (“we” or “us”), in connection with the
solicitation of stockholder consents by our Board of Directors. We
are soliciting stockholder consents in lieu of a special meeting of the
stockholders to approve: (i) the adoption of an amendment (the
“Charter Amendment”) to our Certificate of Incorporation to effect a
one-for-fifteen (1:15) reverse stock split of our common stock, $0.001 par value
per share; and (ii) the adoption of an amendment (the “Plan Amendment”) to our
2008 Equity Incentive Plan (the “2008 Plan”) to increase the total number of
shares of our common stock that may be granted pursuant to awards under such
2008 Plan from 266,666 (after adjustment for the reverse stock split) to
3,000,000 and to add a provision for automatic annual increases based on
increases in our capitalization (an “Evergreen Clause”). Approval of
each of the Charter Amendment and the Plan Amendment requires the affirmative
vote of a majority of the outstanding shares of common stock entitled to vote
thereon. There are no dissenters’ rights applicable to the Charter
Amendment or the Plan Amendment.
A copy of
the written consent to be executed by stockholders is annexed to this Consent
Solicitation Statement as
Annex
A
. The form of the Certificate of Amendment to our Certificate
of Incorporation to be filed in connection with the Charter Amendment is
included as
Exhibit
A
to this Consent Solicitation Statement, and the form of Amendment No. 1
to our 2008 Plan is included as
Exhibit B
to this
Consent Solicitation Statement.
Our Board
of Directors, by written consent on June 21, 2010 and July 27, 2010, has
approved the Charter Amendment and the Plan Amendment, respectively, and has
directed that such matters be submitted to our stockholders for approval by
written consent in lieu of a special meeting. Under Section 228 of
the Delaware General Corporation Law (“DGCL”), any action required or permitted
by the DGCL to be taken at an annual or special meeting of stockholders of a
Delaware corporation may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken, is
signed by the holders of outstanding stock having at least the voting power that
would be necessary to authorize or take such action at a meeting.
Only
stockholders of record as of the close of business on August 6, 2010 (the
“Record Date”) will be entitled to submit a written consent. As of
the Record Date, there were outstanding [76,430,476] shares of our common
stock. The holders of shares of our common stock on the Record Date
are entitled to one vote for each share then held on each proposal that is the
subject of this consent solicitation. Consents signed by the holders of a
majority of the shares entitled to vote are required in order to approve the
proposals set forth herein. To be counted towards the consents
required for approval of the transactions described herein, your consent must be
received within 60 days of the earliest dated consent. Under Delaware law and
our certificate of incorporation, the failure to timely deliver a consent will
have the same effect as a vote against the proposals set forth
herein.
In order
to register your consent to the matters set forth herein, you should return your
signed and dated written consent in the enclosed envelope. You may also
register your consent by telephone or the internet by following the instructions
on
Annex A
. Promptly
following receipt of the requisite stockholder consents and approval of the
Reverse Split from FINRA, we intend: (a) to file a Certificate of
Amendment to our Certificate of Incorporation to effect the Charter Amendment;
and (b) to give effect to the Plan Amendment. The proposed reverse
stock split will become effective at the time of the filing of the Charter
Amendment.
You may
revoke your written consent at any time prior to the time that we have received
a sufficient number of consents to approve the proposals set forth herein. A
revocation may be in any written form validly signed and dated by you, as long
as it clearly states that the consent previously given is no longer
effective. The revocation should be sent to us at Nevada Gold
Holdings, Inc. 1640 Terrace Way, Walnut Creek, CA 94597, Attn: Chief Executive
Officer.
Our Board
of Directors believes that certain large holders, members of the Board of
Directors, and our executive officers, may consent to the two proposals,
although there has been no formal request or agreement with respect to their
authorization or consent. Approximately 24,276,000 shares of our
common stock are believed to be controlled by our officers, directors and 10% or
greater stockholders as of the record date.
We will
pay the costs of soliciting these consents. In addition to soliciting consents
by mail, our officers, directors and other regular employees, without additional
compensation, may solicit consents personally, by facsimile, by e-mail or by
other appropriate means. Broadridge Financial Solutions, Inc. will
assist in the mailing of this Consent Solicitation Statement, the collection of
written consents and the tabulation of votes, but will not solicit any
stockholders. Banks, brokers, fiduciaries and other custodians and
nominees who forward written consent soliciting materials to their principals
will be reimbursed for their customary and reasonable out-of-pocket
expenses.
Our
executive offices are located at 1640 Terrace Way, Walnut Creek,
CA 94597.
FREQUENTLY
ASKED QUESTIONS
The
following questions and answers are intended to respond to frequently asked
questions concerning the actions approved by our board of directors and a
majority of the persons entitled to vote. These questions do not, and
are not intended to, address all the questions that may be important to
you. You should carefully read the entire Information Statement, as
well as its exhibits, annexes and the documents incorporated by reference in
this Information Statement.
Q: WHO
IS ENTITLED TO CONSENT TO THE PROPOSALS DESCRIBED IN THIS CONSENT SOLICITATION
STATEMENT?
A: All
stockholders of record of our common stock as of the close of business on August
6, 2010. As of August 6, 2010, there were [76,430,476] shares of our
common stock outstanding. If your shares are held in a stock
brokerage account or by a bank or other nominee, you are considered the
beneficial owner of shares held in “street name,” and these consent solicitation
materials are being forwarded to you by your broker, bank or nominee who is
considered the stockholder of record with respect to those shares. As
the beneficial owner, you have the right to direct your broker, bank or nominee
to consent or to withhold consent to the proposals set forth
herein. Your broker, bank or nominee has enclosed an instruction card
for you to use in directing the broker, bank or nominee regarding whether to
consent or to withhold consent to the proposals set forth herein.
Q: WILL
THERE BE A MEETING OF STOCKHOLDERS TO CONSIDER THE PROPOSALS SET FORTH IN THIS
CONSENT SOLICITATION STATEMENT?
A: No.
We will not hold a meeting of stockholders. We are incorporated in the State of
Delaware. Section 228 of the General Corporation Law of the State
Delaware permits our stockholders to take action without a meeting if the votes
represented by consents in writing, setting forth the actions so taken,
represent at least a majority of the outstanding voting power.
Q: WHAT
IS THE RECOMMENDATION OF OUR BOARD OF DIRECTORS AS TO THE TWO PROPOSALS
DESCRIBED IN THIS CONSENT SOLICITATION STATEMENT?
A: Our
Board of Directors recommends that stockholders CONSENT TO each of the two
proposals set forth in this Consent Solicitation Statement.
Q: WHAT
IS THE REQUIRED VOTE TO APPROVE EACH OF THE TWO PROPOSALS?
A. Because
we are seeking stockholder approval by soliciting written consents, each
proposal must receive a number of consents representing at least a majority of
the outstanding shares of our common stock entitled to submit consents to be
approved.
Q: WHAT
DO I NEED TO DO NOW TO REGISTER MY CONSENT?
A: After
carefully reading and considering the information contained in this Consent
Solicitation Statement, you may consent to the proposals set forth herein by
signing and dating the enclosed written consent and returning it in the enclosed
envelope as soon as possible. You may also register your consent by
telephone or the internet by following the instructions on
Annex A
.
Q: WHAT
IF I DO NOT RETURN THE WRITTEN CONSENT?
A: Because
each proposal requires the written consents of the holders of a majority of the
outstanding shares of our common stock, your failure to respond will have the
same effect as a withheld consent.
Q: CAN
I VOTE AGAINST THE PROPOSALS?
A: We
are not holding a meeting of our stockholders, so there will be no “yea” or
“nay” vote, as such. However, because each proposal requires the
affirmative consent of the holders of a majority of our outstanding common
stock, simply not delivering an executed written consent in favor of our
proposals will have the same practical effect as a vote against the proposals
would have if they were being considered at a meeting of
stockholders.
Q: CAN
I REVOKE MY CONSENT AFTER I HAVE DELIVERED IT?
A: You
may revoke your written consent at any time prior to the time that we receive a
sufficient number of written consents to approve the proposals set forth
herein. A revocation may be in any written form validly signed and
dated by you, as long as it clearly states that the consent previously given is
no longer effective. The revocation should be sent to us at Nevada
Gold Holdings, Inc. 1640 Terrace Way, Walnut Creek, CA 94597, Attn: Chief
Executive Officer.
Q: BY
WHEN MUST WE RECEIVE A SUFFICIENT NUMBER OF CONSENTS?
A: We
are requesting you to send us your written consents by [August __,
2010]. However, under Delaware law written consents will remain in
effect until the date that is 60 days from earliest dated consent, and our Board
of Directors may extend the deadline to receive written consents in its sole
discretion.
Q: WHAT
IS THE PURPOSE OF THE CHARTER AMENDMENT?
A: The
purpose of the Charter Amendment is to effect a 1-for-15 reverse stock split of
our common stock. We believe that having fewer outstanding shares may
encourage investor interest and improve the marketability and liquidity of our
common stock.
Q: HOW
WILL THE REVERSE STOCK SPLIT AFFECT THE 2008 PLAN?
A: Outstanding
option awards granted under the 2008 Plan will be adjusted as a result of the
Reverse Split to reduce the number of shares issuable upon exercise and to
increase the exercise price per share, in each case, by a factor of 15 (i.e.
proportionally to the reverse stock split). We currently have
outstanding options under the 2008 Plan to purchase an aggregate of 1,250,000
shares of our common stock at a weighted-average exercise price of approximately
$0.13. Immediately following the Reverse Split, we will have
outstanding options under the 2008 Plan to purchase an aggregate of 83,333
shares of our common stock at a weighted-average exercise price of approximately
$2.00. As a result of the reverse stock split, the number of shares
of our common stock that may be granted pursuant to awards under the 2008 Plan
will be reduced by a factor of 15. Since 4,000,000 shares are
currently eligible for grant pursuant to awards under the 2008 Plan, such number
will be reduced to 266,666 shares as a result of the reverse stock
split.
Q: WHAT
IS THE PURPOSE OF THE PLAN AMENDMENT?
A: We
maintain the 2008 Plan for several purposes, including: (i) to attract and
retain qualified directors, officers and employees; (ii)
to
compensate consultants for services rendered to us
which we could not otherwise afford to obtain; and (iii) to provide
incentives for the generation of stockholder value. We believe that,
without the Plan Amendment, there would be an insufficient number of shares
eligible for grant pursuant to the 2008 Plan as a result of the reverse stock
split in order to best satisfy the purposes of the 2008
Plan. Furthermore, we believe that the Evergreen Clause is helpful in
order to allow the number of shares eligible for grant pursuant to the 2008 Plan
to grow proportionally with our capitalization without the expense and delay of
seeking further stockholder action to approve such increases.
Q: WHEN
WILL THE REVERSE SPLIT AND PLAN AMENDMENT TAKE EFFECT?
A: We
intend to file the Charter Amendment and consummate the Reverse Split, as soon
as practicable after (i) receiving the required stockholder consents, and (ii)
receiving approval of the Reverse Split from FINRA. We plan to effect
the Plan Amendment immediately following the Reverse Split. While we
anticipate taking these actions on or about [August __, 2010], the timing will
depend on the speed with which we receive the required stockholder consents and
FINRA approval.
Q: CAN
I REQUIRE YOU TO PURCHASE MY STOCK?
A: No. Under
the DGCL, you are not entitled to appraisal and purchase of your stock as a
result of the Charter Amendment or the Plan Amendment.
Q: WHO
WILL PAY THE COSTS OF THE CHARTER AMENDMENT AND THE PLAN AMENDMENT?
A: We
will pay all of the costs of the Charter Amendment and the Plan Amendment,
including distributing this Information Statement. We may also pay
brokerage firms and other custodians for their reasonable expenses for
forwarding information materials to the beneficial owners of our common
stock. We are not soliciting any proxies and will not contract for
other services in connection with the shareholder action approving the Charter
Amendment and the Plan Amendment.
PROPOSAL
NO. 1:
AMENDMENT
OF CERTIFICATE OF INCORPORATION
Our board
of directors has approved an amendment to our Certificate of Incorporation to
effect a one-for-fifteen (1:15) reverse stock split of our common stock (the
“Reverse Split”), and has directed that such amendment be presented to our
stockholders for their approval by written consent in lieu of a special
meeting.
Pursuant
to the Reverse Split, each fifteen shares of our common stock registered in the
name of a stockholder at the effective time of the Reverse Split will be
converted into one share of our common stock. As permitted under
Delaware law, shares of common stock that would be converted into less than one
share in the Reverse Split will instead, at the Company’s election, either be
converted into the right to receive a cash payment or be rounded up to the next
whole number as described below.
Our Board
of Directors has the discretion to determine if and when to effect the Reverse
Split and may abandon the Reverse Split even if approved by our
stockholders. We expect to consummate the Reverse Split as soon as
practicable after (i) receiving the required stockholder consents, and (ii)
receiving approval of the Reverse Split from FINRA.
The
Reverse Split will only become effective upon filing a Certificate of Amendment
to our Certificate of Incorporation (the “Certificate of
Amendment”). The form of the proposed Certificate of Amendment to
effect the Reverse Split is included as
Exhibit A
to this
Consent Solicitation Statement. The following discussion is qualified
in its entirety by the full text of the Certificate of Amendment.
Purposes
of the Reverse Stock Split
Generally,
the effect of a reverse stock split is to increase the market price per share by
reducing the number of outstanding shares. A reverse stock split
typically does not increase the aggregate market value of all outstanding
shares. Our Board of Directors believes that an increased stock price
may encourage investor interest and improve the marketability and liquidity of
our common stock. Because of the trading volatility often associated
with low-priced stocks, many brokerage firms and institutional investors have
internal policies and practices that either prohibit them from investing in
low-priced stocks or tend to discourage individual brokers from recommending
low-priced stocks to their customers. Some of those policies and
practices may function to make the processing of trades in low-priced stocks
economically unattractive to brokers. Our Board of Directors believes
that the anticipated higher market price resulting from a Reverse Split may
reduce, to some extent, the negative effects on the liquidity and marketability
of our common stock inherent in some of the policies and practices of
institutional investors and brokerage firms described
above. Additionally, because brokers’ commissions on low-priced
stocks generally represent a higher percentage of the stock price than
commissions on higher-priced stocks, the current average price per share of our
common stock can result in individual stockholders paying transaction costs
representing a higher percentage of their total share value than would be the
case if the share price were substantially higher.
Our Board
of Directors also believes that the Reverse Split will afford the Company
additional flexibility in consummating potential future financing and/or
strategic transactions without the need for further shareholder
approval. One consequence of the Reverse Split will be an increase in
the ratio of the number of shares of our common stock that are authorized but
unissued to the number of shares that are issued and
outstanding. This will enable our Board of Directors to issue a
greater multiple of our currently outstanding common stock without seeking
stockholder approval to increase the total number of authorized
shares.
Potential
Risks of the Reverse Stock Split
Following
the Reverse Split, there can be no assurance that the bid price of our common
stock will continue at a level in proportion to the reduction in the number of
outstanding shares resulting from such Reverse Split. In other words,
there can be no assurance that the post-split market price of our Common Stock
would be fifteen times the pre-split market price. Accordingly, the
total market capitalization of our common stock after the proposed Reverse Split
may be lower than the total market capitalization before the proposed Reverse
Split.
Additionally,
the liquidity of our common stock could be affected adversely by the reduced
number of shares outstanding after the Reverse Split. Although our Board of
Directors believes that a higher stock price may help generate investor
interest, there can be no assurance that the Reverse Split will result in a
per-share price that will attract institutional investors or investment funds or
that such share price will satisfy the investing guidelines of institutional
investors or investment funds. As a result, the decreased liquidity
that may result from having fewer shares outstanding may not be offset by any
increased investor interest in our common stock resulting from a higher per
share price.
Principal
Effects of a Reverse Stock Split
Common
Stock
Our
common stock is currently registered under Section 12(g) of the Exchange Act,
and we are subject to the periodic reporting and other requirements of the
Exchange Act. We do not expect the Reverse Split to affect the
registration of our common stock under the Exchange Act. Our common
stock is currently quoted on the OTC Bulletin Board, and the Reverse Split will
not be implemented until we receive the requisite approval from
FINRA.
After the
effective date of the Reverse Split, each stockholder will own fewer shares of
our common stock. However, the Reverse Split will generally affect all of our
stockholders uniformly and will not affect any stockholder’s percentage
ownership interests in us, except to the extent that the Reverse Split results
in any of our stockholders receiving cash (or whole shares) in lieu of
fractional shares as described below. Proportionate voting rights and
other rights and preferences of the holders of our common stock will not be
affected by a Reverse Split other than as a result of the payment of cash (or
rounding up) in lieu of issuing fractional shares. Further, the
number of stockholders of record will not be affected by a Reverse Split, except
to the extent that any stockholder holds only a fractional share interest and
receives cash for such interest after the Reverse Split, as discussed
below.
The
Reverse Split may result in some stockholders owning “odd-lots” of fewer than
100 shares of our common stock. Brokerage commissions and other costs
of transactions in odd lots are generally somewhat higher than the costs of
transactions on “round-lots” of even multiples of 100 shares. The Reverse Split
would not change the number of authorized shares of our common stock as
designated by our Certificate of Incorporation. Therefore, because the number of
issued and outstanding shares of common stock would decrease, the number of
shares remaining available for issuance under our authorized pool of common
stock would increase.
These
additional shares of common stock would be available for issuance from time to
time for corporate purposes such as raising additional capital, acquisitions of
companies or assets and sales of stock or securities convertible into or
exercisable for common stock. We believe that the availability of the additional
shares will provide us with the flexibility to meet business needs as they arise
and to take advantage of favorable opportunities. If we issue additional shares
for any of these purposes, the ownership interest of our current stockholders
would be diluted. Although we continually examine potential acquisitions of
companies or assets or other favorable opportunities, there are no current plans
or arrangements to issue any additional shares of our common stock for such
purposes.
These
proposals have been prompted solely by the business considerations discussed in
the preceding paragraphs. Nevertheless, the additional shares of our common
stock that would become available for issuance following the Reverse Split could
also be used by our management to oppose a hostile takeover attempt or delay or
prevent changes in control or changes in or removal of management, including
transactions that are favored by a majority of our stockholders or in which our
stockholders might otherwise receive a premium for their shares over
then-current market prices or benefit in some other manner. For
example, without further stockholder approval, our Board of Directors could sell
shares of common stock in a private transaction to purchasers who would oppose a
takeover or favor the current Board of Directors. Our Board of Directors is not
aware of any pending takeover or other transactions that would result in a
change in control, and the proposal was not adopted to thwart any such
efforts.
The
following table depicts the prospective effects of the Reverse Split on the
number of shares of our common stock outstanding, the number of shares of our
common stock reserved for future issuance and the number of authorized but
unissued and unreserved shares of our common stock that would be available for
issuance after the Reverse Split. As discussed above, the number of shares of
our common stock authorized for issuance under our Certificate of Incorporation
would remain unaffected by the Reverse Split.
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Common
Stock
Outstanding (1)
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Shares Reserved for
Issuance (2)
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Shares
Available
for Issuance (3)
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Prior
to the Reverse Split
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72,910,476
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4,000,000
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223,089,524
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Pro-forma
the Reverse Split
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4,860,698
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266,667
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294,872,635
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(1)
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Does
not give effect to any changes resulting from the payment of cash or
rounding up to the nearest whole share in lieu of issuing fractional
shares pursuant to the Reverse
Split.
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(2)
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Represents
the total number of shares of common stock reserved for issuance pursuant
to stock option plans. The figure pro-forma the Reverse Split does
not adjust for the Plan Amendment, which will be effective upon
consummation of the Reverse Split if approved by
stockholders. Does not include securities issuable upon
conversion of a 10% Secured Convertible Promissory Note of the Company due
May 14, 2011 (the “New Note”), which is mandatorily convertible into the
securities or instruments issued by the Company in any securities
offering or other financing resulting in gross cash proceeds to the
Company in excess of $500,000. Other than the New Note, The
Company has no outstanding warrants or convertible
debt.
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(3)
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Represents
the total number of shares of authorized Common Stock that will be neither
outstanding nor reserved for issuance, but without giving effect to any
changes resulting from the payment of cash in lieu of fractional
shares. Also, adjusts for the increase in the number of shares
reserved for issuance in connection with awards granted pursuant to the
2008 Plan that will be effective upon consummation of the Reverse
Split.
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Options
and Warrants
We
currently have no outstanding warrants to purchase shares of our common
stock. We currently have outstanding options under the 2008 Plan to
purchase an aggregate of 1,250,000 shares of our common stock at a
weighted-average exercise price of approximately $0.13. Immediately
following the Reverse Split, such options will be exercisable to purchase an
aggregate of 83,333 shares of our common stock at a weighted-average exercise
price of approximately $2.00. The number of shares reserved for
issuance under our existing stock option and equity incentive plans would be
reduced proportionally based on the ratio of the Reverse
Split. However, if our stockholders also approve the Plan Amendment
described in Proposal 2, then the number of shares reserved for issuance
pursuant to the 2008 Plan will be increased to 3,000,000 after giving effect to
the Reverse Split (and, pursuant to the Evergreen Clause, such number may be
automatically increased annually based on increases in our
capitalization).
Fractional
Shares
No
fractional shares of our Common Stock will be issued as a result of the Reverse
Split. Instead, stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of shares not evenly divisible by
fifteen, upon surrender to the exchange agent of the certificates representing
such fractional shares, shall be entitled to receive cash in an amount equal to
the fair market value of any such fractional shares (or, at our discretion, be
rounded up to a whole share) as described below.
In lieu
of issuing fractional shares, we may either: (i) directly pay each stockholder
who would otherwise be entitled to receive a fractional share an amount in cash
equal to the closing stock price of our common stock, as quoted on the OTC
Bulletin Board the day after the Reverse Split becomes effective, multiplied by
the fractional share amount; (ii) make arrangements with our transfer agent or
exchange agent to aggregate all fractional shares otherwise issuable in the
Reverse Split and sell these whole shares as soon as possible after the
effective date at then prevailing market prices on the open market on behalf of
those holders, and then pay each such holder its ratable portion of the sale
proceeds; or (iii) elect to round fractions up to the nearest whole
share.
Implementation
and Exchange of Stock Certificates
Once we
receive the requisite stockholder approval and approval of FINRA, we intend to
file an amendment to our Certificate of Incorporation with the Delaware
Secretary of State, and the Reverse Split will become effective at the time
specified in such Certificate of Amendment, which we refer to as the effective
date.
As of the
effective date of the Reverse Split, each certificate representing shares of our
common stock before the Reverse Split would be deemed, for all corporate
purposes, to evidence ownership of the reduced number of shares of our common
stock resulting from the Reverse Split, except that holders of unexchanged
shares would not be entitled to receive any dividends or other distributions
payable by us after the effective date until they surrender their old stock
certificates for exchange. All shares underlying options and warrants
and other securities would also be automatically adjusted on the effective
date.
Our
transfer agent, Continental Stock Transfer & Trust Company, is expected to
act as the exchange agent for purposes of implementing the exchange of stock
certificates. As soon as practicable after the effective date,
stockholders and holders of securities exercisable for our common stock would be
notified of the effectiveness of the Reverse Split. Stockholders of
record would receive a letter of transmittal requesting them to surrender their
old stock certificates for new stock certificates reflecting the adjusted number
of shares as a result of the Reverse Split. Persons who hold their
shares in brokerage accounts or “street name” would not be required to take any
further actions to effect the exchange of their shares. No new
certificates would be issued to a stockholder until such stockholder has
surrendered any outstanding certificates together with the properly completed
and executed letter of transmittal to the exchange agent. Until
surrender, each certificate representing shares before the Reverse Split would
continue to be valid and would represent the adjusted number of shares resulting
from the Reverse Split. Stockholders should not destroy any stock
certificate and should not submit any certificates until they receive a letter
of transmittal.
No
Dissenters' Rights
In
connection with the approval of the Reverse Split, you and our other
stockholders will not have a right to dissent and obtain payment for their
shares under the DGCL or our Certificate of Incorporation or
By-laws.
Tax
Consequences
The
following discussion sets forth the material United States federal income tax
consequences that management believes will apply to us and our stockholders who
are United States holders at the effective time of the Reverse
Split. This discussion does not address the tax consequences of
transactions effectuated prior to or after the Reverse Split, including, without
limitation, the tax consequences of the exercise of options, warrants or similar
rights to purchase stock. Furthermore, no foreign, state or local tax
considerations are addressed herein. For this purpose, a United
States holder is a stockholder that is: (i) a citizen or resident of the United
States, (ii) a domestic corporation, (iii) an estate whose income is subject to
United States federal income tax regardless of its source, or (iv) a trust if a
United States court can exercise primary supervision over the trust’s
administration and one or more United States persons are authorized to control
all substantial decisions of the trust.
Other
than with respect to any cash payments received in lieu of fractional shares
discussed below, no gain or loss should be recognized by a stockholder upon his
or her exchange of pre- Reverse Split shares for post- Reverse Split shares. The
aggregate tax basis of the post- Reverse Split shares received in the Reverse
Split (including any fraction of a new share deemed to have been received) will
be the same as the stockholder’s aggregate tax basis in the pre- Reverse Split
shares exchanged therefor. The stockholder’s holding period for the
post- Reverse Split shares will include the period during which the stockholder
held the pre- Reverse Split shares surrendered in the Reverse
Split.
A
stockholder who receives cash in lieu of a fractional share that would otherwise
be issued in the Reverse Split will be deemed for federal income tax purposes to
have first received the fractional share, with a basis and holding period
determined in accordance with the foregoing paragraph. The stockholder will then
be deemed to have sold that fractional share back to us for the cash actually
received. The receipt of cash in the deemed sale of a fractional
share will result in a taxable gain or loss equal to the difference between the
amount of cash received and the holder’s adjusted federal income tax basis in
the fractional share. Gain or loss will generally be a capital gain
or loss. Capital gain of a noncorporate United States holder is
generally taxed at a lower rate than other income where the property has a
holding period of more than one year. Deduction of capital losses are
subject to limitation.
We should
not recognize any gain or loss as a result of the Reverse Split.
Financial
Information
Our
audited consolidated financial statements and accompanying notes filed with our
Annual Report (our “Annual Report”) on Form 10-K for the year ended December 31,
2009, as amended, are incorporated herein by reference.
Our
unaudited condensed consolidated interim financial statements and accompanying
notes filed with our Quarterly Report on Form 10-Q (our “Quarterly Report”) for
the period ended March 31, 2010, are incorporated herein by
reference.
Item 7 of
Part II of our Annual Report “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” is incorporated herein by
reference.
Item 2 of
Part II of our Quarterly Report “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” is incorporated herein by
reference.
We are
not calling a meeting of our stockholders, and we do not expect representatives
of GBH CPAs, our independent registered public accounting firm, to be available
to respond to questions in connection with our solicitation of written consents
of stockholders relating to the Charter Amendment and the Plan
Amendment.
Recommendation
of the Board of Directors
Our Board
of Directors recommends that you CONSENT TO Proposal 1, the amendment to our
Certificate of Incorporation to effect a one-for-fifteen (1:15) reverse stock
split.
PROPOSAL
NO. 2:
AMENDMENT
TO 2008 EQUITY INCENTIVE PLAN
Our Board
of Directors adopted our 2008 Equity Incentive Plan (the “2008 Plan”) on
December 30, 2008. The total number of shares of common stock
reserved for issuance pursuant to awards granted under the 2008 Plan is
currently 4,000,000, subject to adjustment in the event of a stock split, stock
dividend, recapitalization or similar capital change. If and when the
proposed Reverse Split is consummated, the number of shares of common stock
reserved under the 2008 Plan will be reduced to 266,667. To date, we
have granted non-qualified stock options to purchase an aggregate of 1,250,000
shares of our common stock under the 2008 Plan at a weighted-average exercise
price of $0.1334 per share. As a result of the Reverse Split, such
options would be adjusted so that they are exercisable, in the aggregate, for
83,333 shares of our common stock at a weighted-average exercise price of $2.001
per share. If an award granted under the 2008 Plan expires,
terminates, is unexercised or is forfeited, or if any shares are surrendered to
us in connection with an incentive award, the shares subject to such award and
the surrendered shares will become available for further awards under the 2008
Plan.
Description
of the 2008 Plan
The 2008
Plan authorizes the grant to participants of nonqualified stock options,
incentive stock options, restricted stock awards, restricted stock units,
performance grants intended to comply with Section 162(m) of the Internal
Revenue Code (as amended, the “Code”) and stock appreciation rights, as
described below:
|
|
·
|
Options
granted under the 2008 Plan entitle the grantee, upon exercise, to
purchase a specified number of shares from us at a specified exercise
price per share. The exercise price for shares of common stock covered by
an option cannot be less than the fair market value of the common stock on
the date of grant unless agreed to otherwise at the time of the
grant.
|
|
|
·
|
Restricted
stock awards and restricted stock units may be awarded on terms and
conditions established by the compensation committee, which may include
performance conditions for restricted stock awards and the lapse of
restrictions on the achievement of one or more performance goals for
restricted stock units.
|
|
|
·
|
The
administrator of the 2008 Plan may make performance grants, each of which
will contain performance goals for the award, including the performance
criteria, the target and maximum amounts payable, and other terms and
conditions.
|
|
|
·
|
The
2008 Plan authorizes the granting of stock awards. The administrator of
the 2008 Plan will establish the number of shares of common stock to be
awarded and the terms applicable to each award, including performance
restrictions.
|
|
|
·
|
Stock
appreciation rights (“SARs”) entitle the participant to receive a
distribution in an amount not to exceed the number of shares of common
stock subject to the portion of the SAR exercised multiplied by the
difference between the market price of a share of common stock on the date
of exercise of the SAR and the market price of a share of common stock on
the date of grant of the SAR.
|
The 2008
Plan is presently administered by our board of directors, which selects the
eligible persons to whom awards shall be granted, determines the terms and
provisions applicable to each award, interprets the provisions of the 2008 Plan
and, subject to certain limitations, may amend the 2008 Plan. Each
award granted under the 2008 Plan shall be evidenced by a written agreement
between us and the award recipient. Incentive Options may also be granted to our
employees. All other awards may be granted to employees, non-employee
directors and consultants.
The
exercise price for Incentive Stock Options granted under the 2008 Plan may not
be less than the fair market value of our common stock on the date the option is
granted, except for options granted to 10% stockholders which must have an
exercise price of not less than 110% of the fair market value of our common
stock on the date the option is granted. The exercise price for
Nonstatutory Stock Options is determined by the administrator of the 2008
Plan. Incentive Stock Options granted under the 2008 Plan have a
maximum term of ten years, unless issued to an employee who is also a 10%
stockholder, in which case the maximum term is five years. The term
of Nonstatutory Stock Options is determined by the administrator of the 2008
Plan at the time of grant and may not exceed ten years. Options
granted under the Plan are not transferable, except by will and the laws of
descent and distribution.
Description
of the Plan Amendment
Our board
of directors has approved an amendment (the “Plan Amendment”) to our 2008 Plan
to increase the total number of shares of our common stock that may be granted
pursuant to awards under such 2008 Plan from 266,666 (after adjustment for the
Reverse Split) to 3,000,000 and to add a provision for automatic annual
increases based on increases in our capitalization (an “Evergreen Clause”), and
has directed that such Plan Amendment be presented to our stockholders for their
approval by written consent in lieu of a special meeting. Unless
otherwise determined by the Board, at the beginning of each fiscal year
beginning with the 2011 fiscal year, the Evergreen Clause will operate to
automatically increase the number of shares subject to issuance pursuant to
awards granted under the 2008 Plan to an amount equal to 5% of the number of
outstanding shares of Common Stock, together with all shares of Common Stock
issuable upon conversion of convertible debt and equity securities (including
interest accrued thereon), and all shares of Common Stock issuable upon exercise
of options, warrants or other rights (excluding options issued under the 2008
Plan) having an exercise price equal to or less than the Fair Market Value (as
defined in the 2008 Plan) at the time of measurement on the last day of the
immediately preceding fiscal year.
Our board
of directors believes that providing directors, officers and employees with
equity incentives such as stock options will contribute substantially to our
future success by further aligning the interests of such key persons with those
of our stockholders. Additionally, our overall compensation
philosophy places significant emphasis on equity compensation to reward,
incentivize and retain management and key employees while conserving
cash. In addition, the 2008 Plan enables us to compensate consultants
for services rendered to us which we could not otherwise afford to
obtain.
We
believe that, without the Plan Amendment, after the Reverse Split there would be
an insufficient number of shares eligible for grant pursuant to the 2008 Plan in
order to best satisfy the purposes of the 2008 Plan. Furthermore, we
believe that the Evergreen Clause is helpful in order to allow the number of
shares eligible for grant pursuant to the 2008 Plan to grow proportionally with
our capitalization without the expense and delay of seeking further stockholder
action to approve such increases.
Executive
Compensation
The
following table sets forth information concerning the total compensation paid or
accrued by us during the last three fiscal years ended December 31, 2009, to (i)
all individuals that served as our principal executive officer or acted in a
similar capacity for us at any time during the fiscal year ended December 31,
2009; (ii) all individuals that served as our principal financial officer or
acted in a similar capacity for us at any time during the fiscal year ended
December 31, 2009; and (iii) all individuals that served as executive officers
of ours at any time during the fiscal year ended December 31, 2009, that
received annual compensation during the fiscal year ended December 31, 2009, in
excess of $100,000.
Summary
Compensation Table
|
Name and
Principal Position
|
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-
Equity
Incentive
Plan
Compen-
sation ($)
|
|
|
Change
in
Pension
Value
and Non-
qualified
Deferred
Compen-
sation
Earnings
($)
|
|
|
All Other
Compensation
($)
|
|
|
Total ($)
|
|
|
David
Rector
|
|
|
2009
|
|
|
$
|
12,000
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
16,231
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
28,231
|
|
|
CEO,
President, CFO,
|
|
|
2008
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Secretary, Treasurer,
and Director
(1)
|
|
|
2007
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Mathewson
(2)
|
|
|
2009
|
|
|
$
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,000
|
|
|
Geological
Advisor
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
Director
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Mr. Rector was our sole officer
and director until December 31, 2008, when he resigned all positions with
the Company; on November 5, 2009, he became our Chief Executive Officer,
President, Secretary and
director.
|
|
(2)
|
Mr. Mathewson became our sole
officer and director on December 31, 2008; he resigned his officer
positions on November 5,
2009.
|
On
November 5, 2009, our Board of Directors granted under our 2008 Plan to David
Rector, in connection with his appointment as our Chief Executive Officer,
President, Secretary and director, incentive stock options to purchase 1,000,000
shares of Common Stock at a purchase price of $0.135 per share (the closing bid
price quoted on the OTCBB on the date of grant), vesting 100% on December 31,
2010, and expiring November 4, 2014.
On
November 16, 2009, our Board of Directors granted under our 2008 Plan to John N.
Braca, in connection with his appointment as our director, non-qualified stock
options to purchase 250,000 shares of Common Stock at a purchase price of $0.127
per share (the closing bid price quoted on the OTCBB on the date of grant),
vesting 100% on December 31, 2010, and expiring November 15, 2014.
Except as
described above, we have not issued any stock options, nor have we maintained
any stock option or other incentive plans other than our 2008
Plan. We have no plans in place and have never maintained any plans
that provide for the payment of retirement benefits or benefits that will be
paid primarily following retirement including, but not limited to, tax qualified
deferred benefit plans, supplemental executive retirement plans, tax-qualified
deferred contribution plans and nonqualified deferred contribution
plans.
Employment
Agreements with Executive Officers
We
entered into an employment agreement effective as of January 1, 2009 (the
“Effective Date”) with David Mathewson, pursuant to which Mr. Mathewson served
as our Chief Executive Officer, President and Chief Geologist. The
term of the employment agreement commenced on the Effective Date and was to end
on the first anniversary of the Effective Date, unless sooner terminated as
provided in employment agreement (the “Term”); thereafter, the Term would have
automatically renewed for successive periods of one year, unless either party
gave to the other at least thirty (30) days’ prior written notice of their
intention not to renew the employment agreement prior to the end of the Term or
the then applicable renewal Term, as the case may be. Pursuant to the
employment agreement, Mr. Mathewson’s annual base salary was
$120,000; provided, however, that for the first year of the term, the
base salary was $105,000 per annum, with $5,000 payable for the months of
January, February and March of 2009, and $10,000 payable for each of the
remaining months of 2009. Mr. Mathewson received a total of $15,000
in salary in 2009. The employment agreement contained no provisions
relating to a bonus.
The Board
of Directors would have determined whether and to what extent Mr. Mathewson
would participate in any stock or option plan of the Company. During the Term,
Mr. Mathewson was entitled to participate in the Company’s insurance programs
and any ERISA benefit plans that may be adopted.
Mr.
Mathewson was entitled to receive reimbursement of all expenses reasonably
incurred by him in performing his services, including all travel and living
expenses while away from home on business or incurred at the specific request or
direction of the Company. The Company advanced to Mr. Mathewson, on a fully
accountable basis, an allowance for reimbursable expenses of $5,000 per month
(or, if reimbursable expenses for the prior month did not equal or exceed
$5,000, then an amount equal to $5,000 less the unused portion of the prior
month’s advance).
The
Company was to grant Mr. Mathewson a 1% net smelter return royalty (“NSR”) for
all prospects generated by him that were acquired by staking for the Company.
The Company was to grant Mr. Mathewson a ½% percent NSR for all prospects
generated by him that are subsequently leased by the Company, exclusive of the
“Tempo” property, provided that (i) such lease carries a total maximum NSR of 4%
percent (inclusive of the ½% percent NSR to Mr. Mathewson), and (ii) such lease
does not adjoin a claim from which Mr. Mathewson is otherwise entitled to
receive participation in an NSR. The Company was to have the right to purchase
all of such ½% percent NSRs respecting leased prospects in the aggregate at any
time for $500,000.
On
November 5, 2009, the Company and Mathewson agreed to terminate the employment
agreement, and Mr. Mathewson resigned as Chief Executive Officer, President,
Secretary, Treasurer and Chief Geologist of the Company. Mr.
Mathewson waived the right to receive any base salary accrued to the termination
date but not yet paid. The Company is not obligated to pay Mr. Mathewson any
severance. No NSRs have accrued under the agreement, and the Company
is not obligated to grant any NSRs to Mr. Mathewson. Mr. Mathewson
agreed that he will not, directly or indirectly, own, manage, operate, finance,
control or participate in the ownership, management, operation, financing, or
control of, be employed by, associated with, or in any manner connected with,
lend any credit to, or render services or advice to any business, firm,
corporation, partnership, association, joint venture or other entity that
engages in or conducts the business of gold exploration, anywhere within the
Tempo property located in Lander County, Nevada, or within two miles of the
current outside boundary of the Tempo property, for a period of three years or
for as long as the Company maintains ownership control or a participatory
involvement in the Tempo property (whichever is longer), or unless otherwise
agreed upon by the Company’s Board of Directors. Mr. Mathewson also
surrendered to the Company, without payment therefor, two million (2,000,000)
shares of the Company’s Common Stock, which were cancelled and returned to
authorized but unissued shares.
Director
Compensation
Directors
are elected by the vote of a majority in interest of the holders of voting stock
and hold office until the expiration of the term for which they are elected and
until successors are qualified and elected.
A
majority of the authorized number of directors constitutes a quorum of the Board
of Directors for the transaction of business. The directors must be
present at the meeting to constitute a quorum. However, any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting if all members of the Board of Directors individually or collectively
consent in writing to the action.
At this
time directors do not receive compensation for their services.
No
Dissenters' Rights
Under the
DGCL, our Certificate of Incorporation and our By-laws, holders of our voting
securities are not entitled to dissenters' rights in connection with the
approval of the Plan Amendment.
Recommendation
of the Board of Directors
Our Board
of Directors recommends that you CONSENT TO Proposal 2, the amendment to our
2008 Equity Incentive Plan to increase the total number of shares of our common
stock that may be granted pursuant to awards under such 2008 Plan from 266,666
(after adjustment for the Reverse Split) to 3,000,000 and to add an Evergreen
Clause.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The
following table sets forth information with respect to the beneficial ownership
of our common stock known by us as of July 27, 2010:
|
|
·
|
each
person or entity known by us to be the beneficial owner of more than 5% of
our common stock;
|
|
|
·
|
each
of our executive officers; and
|
|
|
·
|
all
of our directors and executive officers as a
group.
|
Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of our common stock owned by them, except to
the extent such power may be shared with a spouse.
Unless
otherwise indicated in the following table, the address for each person named in
the table is c/o Nevada Gold Holdings, Inc., 1640 Terrace Way, Walnut Creek,
CA 94597.
Title
of Class: Common Stock
|
Name
and Address
of
Beneficial Owner
|
|
Amount
and Nature
of
Beneficial Ownership
(1)
|
|
|
Percent
of Class
(2)
|
|
|
David
C. Mathewson
1265
Mesa Drive
Fernley,
NV 89408
|
|
|
24,276,000
|
|
|
|
31.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
David
Rector
|
|
|
0
|
(3)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
John
N. Braca
|
|
|
0
|
(4)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
All
directors and executive officers as a group (3 persons)
|
|
|
24,276,000
|
|
|
|
31.8
|
%
|
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes having or sharing voting or investment power with
respect to securities. Shares of common stock subject to
options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of July 27, 2010, are deemed outstanding for
computing the percentage of the person holding such option or warrant but
are not deemed outstanding for computing the percentage of any other
person. Shares beneficially owned have not been adjusted to
reflect the planned Reverse Split.
|
|
(2)
|
Percentages
based upon 76,430,476 shares of common stock outstanding as of July 27,
2010.
|
|
(3)
|
Does
not include 1,000,000 shares of common stock issuable upon the exercise of
options granted under the 2008 Plan, which will fully vest on December 31,
2010.
|
|
(4)
|
Does
not include 250,000 shares of common stock issuable upon the exercise of
option granted under the 2008 Plan, which will fully vest on December 31,
2010.
|
STOCKHOLDER
PROPOSALS
The
deadline for submitting stockholder proposals for inclusion in our proxy
statement and form of proxy for our next annual meeting is a reasonable time
before we begin to print and send our proxy materials. Such proposals
must comply with our By-Laws and the requirements of Regulation 14A of the
Exchange Act. To be properly submitted, the proposal must be received
at our principal executive offices, Nevada Gold Holdings, Inc., 1640 Terrace
Way, Walnut Creek, CA 94597, no later than the deadline. In order to
avoid controversy, stockholders should submit any proposals by means, including
electronic means, which permit them to prove the date of delivery.
In
addition, Rule 14a-4 of the Exchange Act governs the use of our discretionary
proxy voting authority with respect to a stockholder proposal that is not
addressed in a proxy statement. With respect to our next annual meeting of
stockholders, if we do receive notice of a stockholder proposal a reasonable
time before we send our proxy materials for such annual meeting, then we will be
allowed to use our discretionary voting authority when the proposal is raised at
the meeting, without any discussion of the matter in the proxy
statement.
We will,
in a timely manner, inform the stockholders of the planned date of our next
annual meeting and the effect of such date on the deadlines given above by
including a notice under Item 5 in our earliest possible quarterly report on
Form 10-Q, or if that is impracticable, then by any means reasonably calculated
to inform the stockholders.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We are
incorporating the following information into this Information Statement by
reference:
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·
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Our
audited consolidated financial statements and accompanying notes filed
with our Annual Report;
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·
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Our
unaudited condensed consolidated interim financial statements and
accompanying notes filed with our Quarterly
Report;
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·
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Item
7 of Part II of our Annual Report “Management’s Discussion and Analysis of
Financial Condition and Results of
Operations”;
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·
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Item
12 of Part III of our Annual Report “Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters”;
and
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·
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Item
2 of Part II of our Quarterly Report “Management’s Discussion and Analysis
of Financial Condition and Results of
Operations.”
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We shall
provide a copy of our Annual Report and Quarterly Report, without charge, to
each person to whom a Consent Solicitation Statement is delivered, upon written
or oral request of such person delivered to us at Nevada Gold Holdings, Inc.,
1640 Terrace Way, Walnut Creek, CA 94597, Attn: Chief Executive Officer,
telephone: (925) 930-0100.
HOUSEHOLDING
OF PROXY MATERIALS
Some
banks, brokers and other nominee record holders may employ the practice of
“householding” proxy statements and annual reports. This means that
only one copy of this Consent Solicitation Statement may have been sent to
multiple stockholders residing at the same household. If you would
like to obtain an additional copy of this Consent Solicitation Statement, please
contact us at Nevada Gold Holdings, Inc., 1640 Terrace Way, Walnut Creek, CA
94597, Attn: Chief Executive Officer. If you want to receive separate
copies of our proxy statements and annual reports in the future, or if you are
receiving multiple copies and would like to receive only one copy for your
household, you should contact your bank, broker or other nominee record
holder.
WHERE
YOU CAN FIND MORE INFORMATION
We are
required to comply with the reporting requirements of the Securities Exchange
Act. For further information about us, you may refer to our Annual
Report and our Quarterly Report, copies of which are enclosed
herewith.
You can
review these filings at the public reference facility maintained by the SEC at
100 F Street, N.E., Washington, DC 20549. These filings are also
available electronically on the World Wide Web at
http://www.sec.gov
.
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By
Order of the Board of Directors
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David
Rector
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Chief
Executive Officer
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EXHIBIT
A
CERTIFICATE
OF AMENDMENT
OF
THE
CERTIFICATE
OF INCORPORATION
OF
NEVADA
GOLD HOLDINGS, INC.
Under
Section 242 of the Delaware General Corporation Law
NEVADA
GOLD HOLDINGS, INC., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware (the
“Corporation”)
DOES
HEREBY CERTIFY:
FIRST: That
at a meeting of the Board of Directors of the Corporation, resolutions were duly
adopted setting forth a proposed amendment of the Certificate of Incorporation
of the Corporation, as amended to date (the “Amendment”), and declaring that
such Amendment is advisable and that such Amendment should be submitted to the
stockholders of the Corporation for approval. The resolution setting
forth the proposed Amendment is as follows:
RESOLVED,
that Article FOURTH of the Certificate of Incorporation of the Corporation be
amended to add the following paragraph to the end thereof:
Reverse Stock
Split
. Each fifteen (15) of the issued and outstanding shares
of Common Stock as of the time this amendment becomes effective (the ‘‘Split
Effective Time’’), shall be combined and converted (the “Reverse Split”)
automatically, without further action, into one (1) fully paid and
non-assessable share of Common Stock. In lieu of any fractional
shares to which a holder would otherwise be entitled, the Corporation shall
either: (a) pay cash equal to such fraction multiplied by the fair
market value of one share (equal to the average of the closing prices for a
share of Common Stock for the last ten (10) trading days immediately prior to
the Split Effective Time); or (b) round such fraction up to the next whole
integer. Each holder of record of a certificate which immediately
prior to the Split Effective Time represents outstanding shares of Common Stock
(an ‘‘Old Certificate’’) shall be entitled to receive upon surrender of such Old
Certificate to the Corporation’s transfer agent for cancellation, a certificate
(a ‘‘New Certificate’) representing the number of whole shares of Common Stock
into and for which the shares formerly represented by such Old Certificate so
surrendered are exchangeable. From and after the Split Effective
Time, Old Certificates shall represent only the right to receive New
Certificates and, to the extent the Corporation so elects, cash pursuant to the
provisions hereof. The amount of capital represented by the new
shares in the aggregate at the Split Effective Time shall be adjusted by the
transfer of One Tenth of One Cent ($0.001) from the capital account of the
Common Stock to the additional paid in capital account for each share of Common
Stock fewer outstanding immediately following the Reverse Split than immediately
prior to the Reverse Split, such transfer to be made at the Split Effective
Time.
SECOND: Thereafter,
pursuant to resolutions of the Corporation’s Board of Directors, the Amendment
was submitted to the stockholders of the Corporation for approval by written
consent of Stockholders in lieu of a meeting, and Stockholders holding the
necessary number of shares as required by statute consented in writing to the
Amendment in accordance with Section 228 of the General Corporation Law of the
State of Delaware.
THIRD: Said
Amendment was duly adopted in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, said Corporation has caused this Certificate to be signed by
__________, its ______________, as of this __ day of ___________,
2010.
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NEVADA
GOLD HOLDINGS, INC.
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By:
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Name:
David Rector
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Title: Chief
Executive
Officer
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EXHIBIT
B
AMENDMENT
NO. 1 TO
NEVADA
GOLD HOLDINGS, INC.
2008
EQUITY INCENTIVE PLAN
This
Amendment No. 1 (this “Amendment”) to the Nevada Gold Holdings, Inc. 2008 Equity
Incentive Plan (the “2008 Plan”) is made effective immediately following the
effective time of the Company’s contemplated one-for-fifteen reverse stock split
of the Common Stock (the “Reverse Split”). Unless otherwise defined
herein, capitalized terms used in this Amendment shall have the meaning given to
them in the 2008 Plan.
WHEREAS,
the Company’s Board of Directors has approved, and stockholders holding a
majority of the Company’s Common Stock have approved the Reverse Split;
and
WHEREAS,
the Company is planning to effect the Reverse Split as soon as practicable
following satisfaction of certain regulatory requirements; and
WHEREAS,
upon consummation of the Reverse Split, pursuant to Section 14 of the 2008 Plan,
the maximum aggregate number of shares of Common Stock with respect to which
awards may be granted under the 2008 Plan (the “Plan Maximum”) will be reduced
from 4,000,000 shares to 266,666 shares; and
WHEREAS,
the Board of Directors and the stockholders of the Company have determined to
increase the Plan Maximum by amending Section 3 of the 2008 Plan, effective
immediately following the effective time of the Reverse Split.
NOW,
THEREFORE, intending to be legally bound hereby, the Company hereby amends the
2008 Plan as follows:
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1.
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Section
3(a) of the 2008 Plan is amended to read as
follows:
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(a)
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Share Reserve and
Automatic Increases
.
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(i)
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Subject
to the provisions of Section 14 of the Plan, the maximum aggregate number
of Shares that may be awarded and sold under the Plan is 3,000,000
Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.
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(ii)
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The
number of Shares available for issuance under the Plan (the “Floating
Maximum”) will be increased on the first day of each Fiscal Year beginning
with the 2011 Fiscal Year, in an amount equal to the lesser of (i) the
difference between 5% of the number of Diluted Shares (as defined below)
on the last day of the immediately preceding Fiscal Year and the maximum
aggregate number of Shares subject to the Plan on the last day of the
immediately preceding Fiscal Year, or (ii) such other number of Shares as
is determined by the Board. As used herein, “Diluted Shares”
means the outstanding Shares, together with all Shares issuable upon
conversion of convertible debt and equity securities (including interest
accrued thereon), and all Shares issuable upon exercise of options
warrants or other rights (excluding options issued under the Plan) having
an exercise price equal to or less than the Fair Market Value at the time
of measurement. The maximum number of shares of common stock
that may be issued under the Plan pursuant to the exercise of Incentive
Stock Options is the lesser of (A) the Floating Maximum, and (B)
15,000,000 Shares.
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2.
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All
of the other terms of the 2008 Plan continue with full force and
effect.
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IN
WITNESS WHEREOF, this Amendment has been executed by the Company as of the date
first above written.
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NEVADA
GOLD HOLDINGS, INC.
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By:
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Name: David
Rector
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Title: Chief
Executive
Officer
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ANNEX
A
WRITTEN
CONSENT OF STOCKHOLDERS OF
NEVADA
GOLD HOLDINGS, INC.
THIS
CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The
undersigned, being a stockholder of record of Nevada Gold Holdings, Inc. (the
“
Company
”) as
of August 6, 2010 hereby takes the following action, pursuant to Section
228 of the Delaware General Corporation Law, with respect to all shares of
common stock, par value $0.001 per share, of the Company (“
Common Stock
”) held by the
undersigned, in connection with the solicitation by the Board of Directors of
the Company of written consents, pursuant to Section 228 of Title 8 of the
Delaware Code, to the two proposals set forth below, as the same are described
in the Company’s Consent Solicitation Statement on Schedule 14A,
dated [______ __, 2010], without a meeting.
(Place an
“X” in the appropriate boxes)
The Board
of Directors recommends that Stockholders CONSENT to the following
proposals:
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Proposal
1.
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an
amendment to the Company’s Certificate of Incorporation to effect a
one-for-fifteen (1:15) reverse stock split (the “Reverse Split”) of the
Common Stock; and
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Proposal
2.
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an
amendment to the Company’s 2008 Equity Incentive Plan (the “2008 Plan”) to
increase the total number of shares of Common Stock that may be granted
pursuant to awards under such 2008 Plan from 266,666 (after adjustment for
the Reverse Split) to 3,000,000 and to add a provision for annual
increases based on increases in our
capitalization.
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Proposal
1
RESOLVED,
that Article FOURTH of the Certificate of Incorporation of the Corporation be
amended to add the following paragraph to the end thereof (the
“Amendment”):
Reverse
Stock Split
. Each fifteen (15) of the
issued and outstanding
shares of Common Stock as of the time the
certificate containing this amendment becomes effective (the ‘‘Split Effective
Time’’), shall be combined and converted (the “Reverse Split”) automatically,
without further action, into one (1) fully paid and non-assessable share of
Common Stock. In lieu of any fractional shares to which a holder
would otherwise be entitled, the Corporation, at its discretion, shall
either: (a) pay cash equal to such fraction multiplied by the fair
market value of one share (equal to the average of the closing prices for a
share of Common Stock for the last ten (10) trading days immediately prior to
the Split Effective Time); or (b) round such fraction up to the next whole
integer. Each holder of record of a certificate which immediately
prior to the Split Effective Time represents outstanding shares of Common Stock
(an ‘‘Old Certificate’’) shall be entitled to receive upon surrender of such Old
Certificate to the Corporation’s transfer agent for cancellation, a certificate
(a ‘‘New Certificate’) representing the number of whole shares of Common Stock
into and for which the shares formerly represented by such Old Certificate so
surrendered are combined and converted. From and after the Split
Effective Time, Old Certificates shall represent only the right to receive New
Certificates as aforesaid and, to the extent the Corporation so elects, cash
pursuant to the provisions hereof. The amount of capital represented
by the shares of Common Stock outstanding in the aggregate immediately after the
Split Effective Time shall be adjusted by the transfer of One Tenth of One Cent
($0.001) from the capital account of the Common Stock to the additional paid in
capital account for each share of Common Stock fewer outstanding immediately
following the Reverse Split than immediately prior to the Reverse Split, such
transfer to be made at the Split Effective Time.
; and be
it further
RESOLVED,
that the Certificate of Amendment (the “Charter Amendment”) of the Certificate
of Incorporation of the Corporation attached as Exhibit A to the Corporation’s
Consent Solicitation Statement dated [_____ __, 2010] (the “Consent Solicitation
Statement”) be, and it hereby is, authorized, approved and adopted in all
respects.
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¨
CONSENT
(FOR)
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¨
CONSENT WITHHELD
(AGAINST)
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¨
ABSTAIN
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Proposal
2
RESOLVED,
that an increase in the maximum aggregate number of shares of Common Stock with
respect to which awards may be granted under the 2008 Plan, effective upon
consummation of the Reverse Split, to 3,000,000 after giving effect to the
Reverse Split be, and it hereby is, authorized and approved; and be it
further
RESOLVED,
that the addition of a provision automatically increasing the number of shares
of Common Stock with respect to which awards may be granted under the 2008 Plan
at the beginning of each fiscal year beginning with the 2011 fiscal year, in an
amount equal to the lesser of (i) the difference between (A) 5% of the number of
outstanding shares of Common Stock, together with all shares of Common Stock
issuable upon conversion of convertible debt and equity securities (including
interest accrued thereon), and all shares of Common Stock issuable upon exercise
of options, warrants or other rights (excluding options issued under the 2008
Plan) having an exercise price equal to or less than the Fair Market Value (as
defined in the 2008 Plan) at the time of measurement on the last day of the
immediately preceding fiscal year and (B) the maximum aggregate number of shares
of Common Stock subject to the 2008 Plan on the last day of the immediately
preceding fiscal year, or (ii) such other number of shares of Common Stock as is
determined by the Board; and be it further
RESOLVED,
that the Amendment to the 2008 Plan attached as Exhibit B to the Consent
Solicitation Statement be, and it hereby is, authorized, approved and adopted in
all respects.
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¨
CONSENT
(FOR)
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¨
CONSENT WITHHELD
(AGAINST)
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¨
ABSTAIN
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INSTRUCTIONS
: TO
CONSENT, WITHHOLD CONSENT OR ABSTAIN FROM CONSENTING TO THE APPROVAL OF EACH
PROPOSAL, CHECK THE APPROPRIATE BOX ABOVE. IF NO BOX IS MARKED ABOVE WITH
RESPECT TO EACH PROPOSAL, THE UNDERSIGNED WILL BE DEEMED TO HAVE CONSENTED
TO THE PROPOSAL.
MAIL:
PLEASE DATE, SIGN AND MAIL THIS CONSENT PROMPTLY, USING THE ENCLOSED
ENVELOPE.
[TELEPHONE:
Describe tele
phone
voting
option
.
]
[INTERNET:
Describe
internet voting
option.
]
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Dated:
______________, 2010
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[print
name of record stockholder as set forth on stock
certificate]
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[signature
of record stockholder or person authorized to sign on behalf of record
stockholder]
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[title
or authority of authorized person, if applicable]
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[signature,
if held
jointly]
|
If an
individual, please sign exactly as the name appears on the certificate
representing your shares of Common Stock. If a corporation, partnership, trust,
limited liability company or other entity, please identify the entity as the
name appears on the certificate representing your shares of Common Stock, cause
an authorized person to sign on behalf of the entity, and clearly identify the
title of such authorized person. This Written Consent of Stockholders shall vote
all shares to which the signatory is entitled. This Written Consent of
Stockholders, together with all written consents in substantially the same form,
shall be treated as a single consent of stockholders
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