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): October 21, 2005
MCKENZIE BAY INTERNATIONAL, LTD.
(EXACT NAME OF REGISTRANT AS
SPECIFIED IN ITS CHARTER)
DELAWARE 000-49690
(STATE OR OTHER JURISDICTION OF INCORPORATION) (COMMISSION FILE NUMBER)
51-0386871
(IRS EMPLOYER IDENTIFICATION NO.)
37899 Twelve Mile Road, Ste.#300
Farmington Hills, Michigan 48331
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
49331
(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(248) 489-1961
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Section 1 - Registrant's Business and Operations
Item 1.01. Entry into a Material Definitive Agreement.
The response to Item 1.01 of our Current Report dated October 11, 2005 is hereby
incorporated by reference.
On November 14, 2005, Cornell Capital Partners, LP ("Cornell") purchased a
second secured convertible debenture from us. The second secured convertible
debenture is in the face amount of $2,000,000 and was purchased from us by
Cornell for a like amount. The principal sum together with accrued but unpaid
interest at an annual rate of approximately 10.14% is payable on or before
November 14, 2007. The other terms of the second secured convertible debenture
are substantially identical to those of the secured convertible debenture
purchased from us by Cornell on October 11, 2205.
As is the case with the first secured convertible debenture, there is no limit
to the number of shares we may be required to issue to satisfy our obligation
for conversion of shares under the second secured convertible debenture. Any
decline in the market price of our shares will increase the number of shares we
would otherwise be required to issue.
Pursuant to the Pledge and Escrow Agreement described in Item 1.01 of our
Current Report dated October 11, 2005, we have now delivered a certificates
representing an aggregate of 25,000,000 of our shares to the escrow agent.
In connection with the purchase by Cornell of the second secured convertible
debenture, we have paid Yorkville Advisors Management LLC a further fee of
$200,000. Yorkville Advisors Management LLC is the general partner of Cornell.
In connection with the purchase by Cornell of the second secured convertible
debenture, we issued a warrant to Cornell to purchase 2,000,000 shares of our
common stock for a period of five years at an exercise price of $1.00 per share,
subject to adjustment as set forth in the warrant. The terms of the warrant are
substantially identical to those of the warrant we issued to Cornell on October
11, 2005.
On November 14, 2005, we filed a registration statement with the SEC for the
resale by Cornell of up to 39,062,500 shares to be issued upon conversion of the
secured convertible debentures and 5,000,000 shares underlying the warrants. In
the event that the registration statement is not declared effective by the SEC
within 120 days of its filing or if after it has been declared effective by the
SEC, sales cannot be made pursuant to the registration statement, then we will
pay liquidated damages of 2% of the liquidated value of the secured convertible
debentures outstanding for each thirty day period after the filing deadline or
the 120 day period, as the case may be. We have agreed to indemnify Cornell
against certain losses, costs or damages which may arise in connection with the
registration statement, including those which may arise under the Securities Act
of 1933. The registration statement also includes shares to be offered by
persons other than Cornell.
In connection with the purchase of the second secured convertible debenture by
Cornell, we paid a fee of $120,000.00 to Spencer Clarke LLC.
Section 2 - Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets.
Reference is made to the response to Item 1.01 above.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
Reference is made to the response to Item 1.01 above.
Section 3 - Securities and Trading Markets
Item 3.02 Unregistered Sale of Equity Securities.
Reference is made to the response to Item 1.01 above.
On October 21, 2005, we issued 22,600 shares of our common stock to Gary L.
Westerholm in consideration of his forgiveness of a promissory note we had
issued to him having a then outstanding balance of principal and interest of
$22,600.
We claimed exemption from the registration provisions of the Securities Act of
1933 pursuant to the provisions of Section 4(2) thereof inasmuch as no public
offering was involved.
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 hereunto duly authorized.
McKENZIE BAY INTERNATIONAL, LTD.
Date: November 16, 2005
/s/Donald C. Harms
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Donald C. Harms, Secretary