Newton Golf (NWTG) swaps $2.3M notes into 10% Series A preferred
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Newton Golf Company entered Exchange Agreements with certain noteholders to swap approximately $2.3 million of existing convertible notes, including accrued interest, into 24,092.61 shares of a new Series A Convertible Preferred Stock at an Original Issue Price of $1.00 per share.
The Series A Preferred Stock carries a 10.00% annual dividend on the Original Issue Price, which the company may pay in cash, by increasing the stated value, or allow to accrue. It ranks senior to common stock in dividends and liquidation and is initially convertible into common shares at a $1.00 conversion price, with forced conversion possible if the common stock trades at or above $3.00 for 10 consecutive trading days and a resale registration is effective.
The class has significant investor protections, including voting on an as-converted basis, preemptive rights in subsequent offerings, and consent rights over senior securities or a voluntary bankruptcy while at least 25% of the originally issued preferred shares remain outstanding. A beneficial ownership cap generally limits any holder to 4.99% of outstanding common stock, adjustable up to 19.99% subject to notice and stockholder approval thresholds.
Positive
- None.
Negative
- None.
8-K Event Classification
4 items: 1.01, 3.03, 5.03, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 3.03
Material Modification to Rights of Security Holders
Securities
A change was made that materially affects the rights of existing shareholders (e.g., dividend rights, voting rights).
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Governance
The company amended its charter documents, bylaws, or changed its fiscal year.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Notes exchanged: approximately $2.3 million
Series A preferred issued: 24,092.61 shares
Original Issue Price: $1.00 per share
+5 more
8 metrics
Notes exchanged
approximately $2.3 million
Aggregate Existing Notes, inclusive of accrued interest, exchanged on July 6, 2026
Series A preferred issued
24,092.61 shares
Shares of Series A Convertible Preferred Stock issued in exchange for Existing Notes
Original Issue Price
$1.00 per share
Original Issue Price used to calculate Series A preferred issued and conversion terms
Annual dividend rate
10.00% per annum
Dividend on Original Issue Price for Series A preferred, payable annually in arrears
Authorized Series A preferred
50,000 shares
Maximum number of Series A Convertible Preferred Stock shares authorized in Certificate of Designation
Initial conversion price
$1.00 per share
Initial Conversion Price for converting Series A preferred into common stock
Forced conversion trigger price
$3.00 per share
Common stock closing price for 10 consecutive trading days to allow forced conversion
Beneficial ownership cap
4.99% to 19.99%
Beneficial Ownership Limitation on common stock after preferred conversion, subject to notice and approval
Key Terms
Series A Convertible Preferred Stock, Registration Rights Agreement, Liquidation Preference, PIK Dividend, +2 more
6 terms
Series A Convertible Preferred Stock financial
"the Company agreed to issue an aggregate of 24,092.61 shares of the Company’s newly designated Series A Convertible Preferred Stock"
Series A convertible preferred stock is a class of shares sold in an early funding round that gives investors a mix of protection and upside: it pays a priority claim over common shares if the company is sold or closes, but can be converted into ordinary shares to share in future growth. Think of it like a hybrid between a safer stake and a ticket to ownership; it matters to investors because it affects who controls the company, how future gains are split, and how much their investment is protected from downside.
Registration Rights Agreement regulatory
"the Company and each Holder also entered into a Registration Rights Agreement, dated July 6, 2026"
A registration rights agreement is a contract that gives investors the option to have their ownership stakes officially registered with the government, making it easier to sell their shares later. This agreement matters because it provides investors with a clearer path to cash out their investments if they choose, offering more liquidity and confidence in their ability to sell their holdings when desired.
Liquidation Preference financial
"holders of Series A Preferred Stock are entitled to receive ... the Liquidation Preference"
A liquidation preference is a rule that determines who gets paid first and how much they receive when a company is sold, goes bankrupt, or distributes its assets. It gives certain investors a priority claim—often returning their original investment plus any agreed multiple—before other owners receive money, which shapes how much common shareholders and founders ultimately get; think of it as a front-of-the-line pass that affects payout order and investor returns.
PIK Dividend financial
"Annual Dividends may be paid in cash, by PIK Dividend (an increase to the Stated Value), or allowed to accrue"
Beneficial Ownership Limitation regulatory
"Subject to the Beneficial Ownership Limitation (as described below)"
A beneficial ownership limitation is a rule that caps the percentage of a company’s shares an investor can be treated as owning or controlling for voting, regulatory or tax purposes. It matters to investors because it can restrict how many shares a person or group can buy or vote, affect takeover chances, and influence share liquidity and value — like a speed limit that prevents any single driver from taking over the whole road.
Change of Control financial
"Upon a Change of Control, all shares of Series A Preferred Stock automatically convert into Common Stock"
A change of control occurs when the ownership or management of a company shifts significantly, such as through a sale, merger, or acquisition, resulting in new leadership or ownership structure. This change can impact the company's direction and decision-making, which is important for investors because it may affect the company's stability, strategy, and future prospects.
FAQ
What did Newton Golf Company (NWTG) announce in this 8-K filing?
Newton Golf Company agreed to exchange existing notes for new preferred stock. It entered Exchange Agreements to convert about $2.3 million of convertible promissory notes into 24,092.61 shares of new Series A Convertible Preferred Stock, restructuring part of its outstanding debt.
What dividend terms apply to Newton Golf’s Series A Convertible Preferred Stock?
Series A preferred holders receive a 10.00% annual dividend on the Original Issue Price. Dividends are payable annually in arrears and may be paid in cash, as PIK dividends increasing stated value, or accrue as unpaid cash dividends, subject to applicable exchange listing standards.
At what price can Newton Golf’s Series A preferred convert into common stock?
Each Series A preferred share initially converts at a $1.00 per-share conversion price. The number of common shares is determined by dividing the preferred’s Stated Value by the Conversion Price, divided by 100, with customary adjustments for stock splits and similar corporate actions.
When can Newton Golf force conversion of the Series A preferred into common stock?
The company may require conversion if its common stock closes at or above $3.00 for 10 consecutive trading days. A resale registration statement for the underlying common shares must also be effective at the time of any forced conversion to proceed.
What ownership limits apply to holders of Newton Golf’s Series A preferred stock?
Individual holders are generally capped at 4.99% beneficial ownership of common stock. This Beneficial Ownership Limitation can be increased up to 19.99% with 61 days’ prior notice, but no holder may exceed 19.99% without stockholder approval, restricting concentration of ownership.