eightk
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): February 6, 2007
Goldrange
Resources, Inc.
(Name
of
small business in its charter)
|
Nevada
|
000-26139
|
91-1937382
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification Number)
|
| |
|
|
|
5416
Birchman Avenue, Ft. Worth, TX
|
76107
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Issuer's
telephone number: (817) 991-6263
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 (see General Instruction A.2. below):
[
] 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
240.14a12)
|
[
]
|
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))
|
SECTION
1- REGISTRANT’S BUSINESS AND OPERATIONS
Item
1.01 Entry
into a Material Definitive Agreement.
A. Contribution
Agreement
On
November 30, 2006, Goldrange Resources Corp., a Nevada corporation (“Goldrange
Resources”), entered into a Contribution Agreement with JMT RESOURCES, LTD., a
Texas limited partnership (“JMT”), REO ENERGY, LTD., a Texas limited partnership
(“REO”), and BENCO OPERATING, INC., a Texas corporation (“BENCO”) (JMT, REO and
BENCO shall sometimes be referred to herein individually as a “CONTRIBUTOR” and
collectively as the “CONTRIBUTORS”).
The
transaction described in the Contribution Agreement is referred to in this
Current Report as the Contribution Transaction. A summary of the Contribution
Transaction, as well as the material terms and conditions of the Contribution
Agreement, are set forth below, but such summary is qualified in its entirety
by
the terms and condition of the Contribution Agreement, which are incorporated
herein by this reference.
1. The
Parties to the Contribution Agreement
Goldrange
Resources originally incorporated under the name Goldrange Resources, Inc.
in
the State of Nevada on November 29, 2004. Goldrange Resources executive offices
are located at 5416 Birchman Avenue, Ft. Worth, TX and telephone number (817)
732-8739.
REO
Energy Ltd. was incorporated in the state of Texas on August 25, 2003. JMT
Resources Ltd. was incorporated in the state of Texas on November 26, 2003.
Benco Operating was incorporated in the state of Texas on July 3,
1985.
2. The
Contribution Transaction
Pursuant
to the Contribution Agreement, Goldrange Resources acquired specific assets
from
the Contributors (See Contribution Agreement attached as Exhibit
10.1)
3. The
Contribution Consideration
Under
the
Contribution Agreement, the Company issued, in consideration for the assets
and
property contributed by the Contributors a total of 54,750,000 shares of the
Company’s Common Stock as follows:
|
Name
|
Number
of Shares
|
| |
|
|
JMT
|
15,822,750
shares of Common Stock
|
|
REO
|
22,855,500
shares of Common Stock
|
|
BENCO
|
16,041,750
shares of Common Stock
|
|
Total
|
54,750,000
shares of Common Stock
|
4. The
Contribution Agreement
There
was
no delay between the signing of the Contribution Agreement and the closing
of
the Contribution Agreement as both occurred on February 1, 2007. The
Contribution Agreement contains customary terms and conditions for a transaction
of this type, including representations, warranties and covenants, as well
as
provisions describing the Contribution consideration, the process of exchanging
the consideration and the effect of the Contribution. The Contribution Agreement
contains reciprocal indemnification provisions that provide for indemnification
in the event of a breach of a representation or warranty.
5. Material
Relationships
There
were no material relationships between the Registrant or its affiliates and any
of the parties to the Contribution Agreement, other than in respect of the
Contribution Agreement.
SECTION
2- FINANCIAL INFORMATION
Item
2.01 Completion
of Acquisition or Disposition of Assets.
On
February 1, 2007, the Registrant entered into the Contribution Agreement,
pursuant to which the Registrant completed the Contribution Transaction and
acquired specific assets from JMT RESOURCES, LTD., a Texas limited partnership
(“JMT”), REO ENERGY, LTD., a Texas limited partnership (“REO”), and BENCO
OPERATING, INC., a Texas corporation (“BENCO”) (collectively the
“Contributors”). The Contribution was completed and closing occurred on February
1, 2007.
In
exchange for transferring the assets to the Registrant, the Contributors
received stock consideration consisting of 54,750,000 newly issued shares of
the
Registrants common stock, which were divided proportionally among the
Contributors in accordance with their respective ownership interests immediately
before the completion Contribution Transaction.
There
were no material relationships between the Registrant or its affiliates and
any
of the parties to the Contribution Agreement, other than in respect of the
Contribution Agreement.
A. Description
of Business
Goldrange
Resources Corp.(previously REO Energy, Ltd., JMT Resources, Ltd. and Benco
Operating, Inc. and hereinafter referred to as either the “Company” or
“ReoStar”) is an upstream oil and gas producer with a blended mix of assets
focused on developing reserves in North Texas, Oklahoma and Arkansas. The
Companies were have focused their efforts in two areas of exploration;
development of unconventional gas resource plays, located mainly in the Barnett
Shale and the re-development of partially depleted reservoirs in older, mature
fields, and presently located in Corsicana, Texas. In addition to their
exploration focus, the Company has interests in the following: a pipeline system
that services its production in the Barnett Shale and a drilling rig that it
presently uses to drill its wells, also in the Barnett Shale.
BARNETT
SHALE
The
ReoStar Barnett Shale project is approximately 15 miles north of Decatur, Texas
and 50 miles northwest of Dallas, Texas. They own approximately 8,800 acres
of
mineral leasehold in the Barnett area and have drilled 44 wells to date, all
of
which average 9,000 feet in depth. Barnett Shale wells commonly produce about
1
BCF and 80,000 barrels of oil. The Company retains an average working interest
of 22% in all of the wells it has drilled. Four wells should be considered
for
immediate re-work and re-completion. Of the 8,800 acres in the Barnett Shale
trend, approximately 7,000 acres remain to be tested by drilling. Drilling
has
been very successful in the terms of dry hole percentages. Completion techniques
are the keys needed for successful economic viability. The Company’s management
and operations team are continually trying new technical completion approaches
which will improve initial production and provide a higher production levels
over a greater period of time. The Company has drilled and completed one
horizontal in the area and the production results, while in a normal range,
do
not warrant the extra $1 million needed to drill a horizontal well from the
$1.5M cost to drill vertical wells. The Company continues to seek out new
mineral leasehold acquisition opportunities for the expansion of its Barnett
Shale drilling program.
The
strategy for developing the Barnett Shale Project is to continue drilling on
the
initial Barnett Shale acreage west of the fault structure in a northwestern
direction. ReoStar expects to drill 30 to 40 wells this year in this particular
area. We plan on acquiring additional acreage between both Montague and Cooke
county locations in order to establish a contiguous block and exploration
control over its designated Barnett Shale Project area. Additionally, pipeline
infrastructure will be extended to these areas to insure the timely sale of
gas
while avoiding costly shut-ins. Currently, it takes 30 days after the final
completion for the Company to begin recognizing gas revenue from the wells
it
drills.
CORSICANA
FIELD REDEVELOPMENT
The
Corsicana Field (“Corsicana” or “Field”) is the oldest in Texas and was
originally drilled for water by a local water company who, as a result,
subsequently became one of the largest oil firms in the world. The field has
produced approximately 35 million barrels of oil since drilling began in
1890.
Currently,
the Company is the operator of the Field and owns a ninety-five percent working
interest in all of the leases that comprise the field. The field has been owned
by the principals of the Company since 1997, and they have invested
approximately $7.5 million on its acquisition and production efforts, which
include several enhanced oil recovery (EOR) pilots.
The
Company’s principals have considerable experience in the redevelopment of
mature, shallow oil fields and possess a sophisticated background in
technologies and reservoir characteristics. The Corsicana leasehold possesses
one of the best redevelopment opportunities in Texas due to the extraordinary
amount of in-place reserves. This project is a shallow depth, unconsolidated
sand, producing field that includes a number of deeper productive areas each
with distinctive production characteristics and histories. This presentation
refers to the Mildred (Elm Ridge) Pool, which is the geological formation
describing the Corsicana Field whose depth ranges from 800 to 1,000
feet.
There
are
several aspects of this field that make it an attractive target for the pilot
program. Third party reservoir engineering studies have shown that 84.5 MMBO
(million barrels of oil) remain in place the Corsicana Field from an original
120MMBO total reserve. Various reviews have estimated the recoverable reserves
to be 16 to 40 MMBO (See attached Reserve Report) depending on the extraction
technology employed. The high amount of reserves remaining is primarily due
to
the fact that much of the shallow production in this field was discovered and
developed between 1895 and 1930 during the infancy of the oil industry. The
lack
of geological knowledge and in particular, fluid flow mechanics greatly
decreased the efficiency of production resulting in a high percentage of
reserves remaining in place.
The
unique Corsicana field characteristics warrant redevelopment for the following
reasons.
| § |
Technological
advances
-
directional and horizontal drilling, under-balanced drilling, multilateral
completions, down hole imaging tools, and polymer flooding provide
new and
different ways to extract oil from older, mature
fields.
|
| § |
Underutilized
infrastructure
-
this mature field has enormous infrastructure in place shortening
the time
to cash flow after the implementation of recovery
technologies.
|
| § |
High
quality heavy oil -
The oil produced from the Nacatoch zone is 26°
gravity and is neither paraffin based nor asphaltine, but rather
a naphtha
based oil that does not require extensive refining. As a result,
producers
receive a bonus to the posted price, typically from $1.50 to $2.00
per
barrel.
|
| § |
High
yields and low lifting costs
-
4,000 acres of contiguous mineral leasehold with very large in-place
reserves and lifting costs as low as $8 per barrel including recovery
technology applications.
|
FAYETTEVILLE
SHALE
The
Company owns approximately 6,450 acres of mineral leasehold in various Arkansas
counties in what is know as the Fayetteville Shale, an unconventional gas play
located in the western part of the State of Arkansas. The acreage is located
in
areas northwest and northeast of Little Rock, Arkansas. The fairway of the
Fayetteville Shale transverses an area approximately 50 miles northwest to
70
miles east of Little Rock. ReoStar has not set up operations in the area at
this
time. Currently the value is solely in the leased acreage. Acreage lease values
range up to $900 per acre for contiguous acre blocks. The Company is currently
contemplating whether it will establish operations in the Fayetteville Shale
play or whether it will sell the acreage for a profit and retain an overriding
royalty. The overriding royalty on acreage, if developed could turn into a
sizable revenue stream if the wells are successfully drilled and
completed.
TRI-COUNTY
GAS GATHERING SYSTEM JOINT VENTURE
In
May of
2005, the Company entered into a Joint Venture Agreement with Central Crude
Texas Gathering, L.P. and Cimmarron Gathering, L.P. to contribute and build
pipeline infrastructure for the Barnett Shale play located in Cooke, Wise and
Montague Counties, Texas, known as the Tri-County Gas Gathering System (TCGGS).
The
Company previously had built its own line to service its own production wells
in
the same area. Central Crude and Cimmarron both have existing infrastructure
in
the area along with local producers that utilized their infrastructure. All
of
the partners in TCGGS had viable gathering operations prior to the combination.
The total cost value of contributed assets to the TCGGS was $4.2 million, which
at current pricing for steel, would equate to over $6 million today in cost
value of the assets contributed.
The
Company has a financial partner who has contributed capital to the pipeline
partnership on its behalf in exchange for the right to earn a fifty percent
interest of the Company’s ownership in the pipeline partnership. The financial
partner has contributed $3 million to date.
This
joint venture has already created benefits for the joint venture partners not
only in establishing an increasing revenue stream, but also providing low cost
transportation for their affiliate producers operating in the area. To date
the
partnership has built over 30 miles in the main system and 20 miles of a 4”
system. It has also acquired two 1,000 hp compressors plus assorted gathering
equipment and a gas processing plant.
Currently,
the system has 104 wells hooked-up to the system of which 41 have been drilled
the Company. ReoStar anticipates being able to hook-up an additional 50 wells
during the 2007 calendar year. The future capital expenditure for the hook-up
of
wells is estimated to be $7 million. The system will be able to service 300
square miles of service territory.
INVESTMENT
IN DRILLING COMPANY
The
Company made a senior, secured loan to its drilling contractor in the amount
of
$2.75 M and obtained a secured a senior debt position against the drilling
contractor and its assets. The Company had an option to purchase the drilling
contractor for cash and equity in the combined companies, however, the option
expired on August 31, 2006. The drilling contractor has continued to service
the
debt and is exploring all opportunities for its purchase as the Company
continues its efforts to secure adequate financing to consummate the purchase
thereof.
Risk
Factors
Need
for ongoing financing.
Goldrange
Resources will need additional capital to continue operations and will endeavor
to raise funds through the sale of equity shares and revenues from operations.
There can be no assurance that Goldrange Resources will generate revenues from
operations or obtain sufficient capital on acceptable terms, if at all. Failure
to obtain such capital or generate such operating revenues would have an adverse
impact on financial position and results of operations and ability to continue
as a going concern. Operating and capital requirements during the next fiscal
year and thereafter will vary based on a number of factors, including the level
of sales and marketing activities for our services and products. There can
be no
assurance that additional private or public financing, including debt or equity
financing, will be available as needed, or, if available, on terms favorable
to
Goldrange Resources. Any additional equity financing may be dilutive to
stockholders and such additional equity securities may have rights, preferences
or privileges that are senior to those of Goldrange Resources existing common
stock.
Furthermore,
debt financing, if available, will require payment of interest and may involve
restrictive covenants that could impose limitations on operating flexibility.
Goldrange Resources’ failure to successfully obtain additional future funding
may jeopardize the ability to continue our business and operations. If Goldrange
Resources can raise additional funds by issuing equity securities, existing
stockholders may experience a dilution in their ownership. In addition, as
a
condition to giving additional funds, future investors may demand, and may
be
granted, rights superior to those of existing stockholders.
Cautionary
factors that may affect future results.
Goldrange
Resources provides the following cautionary discussion of risks, uncertainties
and possible inaccurate assumptions relevant to its business and products.
These
are factors that could cause actual results to differ materially from expected
results. Other factors besides those listed here could adversely affect
Goldrange Resources.
Potential
fluctuations in quarterly operating results.
Goldrange
Resources’ quarterly operating results may fluctuate significantly in the future
as a result of a variety of factors, most of which are outside its control,
including the demand for services, seasonal trends in purchasing, the amount
and
timing of capital expenditures; price competition or pricing changes in the
industry; technical difficulties or system downtime; general economic
conditions, and economic conditions specific to the industry. The quarterly
results may also be significantly impacted by the impact of the accounting
treatment of acquisitions, financing transactions or other matters. Due to
the
foregoing factors, among others, it is likely that the operating results will
fall below expectations or those of investors in some future
quarter.
Lack
of independent directors.
Goldrange
Resources cannot guarantee that its board of directors will have a majority
of
independent directors in the future. In the absence of a majority of independent
directors, the executive officers, could establish policies and enter into
transactions without independent review and approval thereof. This could present
the potential for a conflict of interest between Goldrange Resources and its
stockholders generally and the controlling officers, stockholders or
directors.
Management
of potential growth.
Goldrange
Resources may experience rapid growth which will place a significant strain
on
its managerial, operational, and financial systems resources. To accommodate
its
current size and manage growth, Goldrange Resources must continue to implement
and improve its financial strength and operational systems, and expand, train
and manage its sales and distribution base. There is no guarantee that Goldrange
Resources will be able to effectively manage the expansion of its operations,
or
that its facilities, systems, procedures or controls will be adequate to support
its expanded operations. Goldrange Resources’ inability to effectively manage
its future growth would have a material adverse effect.
Goldrange
Resources depends heavily on key personnel and loss of the services of one
or
more of its key executives or a significant portion of any prospective local
management personnel could weaken the management team adversely affecting the
operations.
Goldrange
Resources’ success largely depends on the skills, experience and efforts of its
senior management, particularly the Chief Executive Officer, Mark S. Zouvas.
Operations will also be dependent on the efforts, ability and experience of
key
members of the prospective local management staff. The loss of services of
one
or more members of the senior management or of a significant portion of any
of
local management staff could weaken significantly management expertise and
the
ability to deliver health care services efficiently. Goldrange Resources does
not maintain key man life insurance policies on any of its officers, although
it
intends to obtain such insurance policies in the future.
B. Plan
of Operation
Forward
Looking Statements
Much
of
the discussion in this Item is "forward looking" as that term is used in Section
27A of the Securities Act and Section 21E of the Securities Exchange Act of
1934. Actual operations and results may materially differ from present plans
and
projections due to changes in economic conditions, new business opportunities,
changed business conditions, and other developments. Other factors that could
cause results to differ materially are described in our filings with the
Securities and Exchange Commission. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of
1995.
There
are
several factors that could cause actual results or events to differ materially
from those anticipated, and include, but are not limited to general economic,
financial and business conditions, changes in and compliance with governmental
laws and regulations, including various state and federal environmental
regulations, our ability to obtain additional financing from outside investors
and/or bank and mezzanine lenders and the ability to generate sufficient
revenues to cover operating losses and position Goldrange Resources to achieve
positive cash flow.
Readers
are cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. We believe the
information contained in the current Form 10-QSB to be accurate as of the date
hereof. Changes may occur after that date. We will not update that information
except as required by law in the normal course of its public disclosure
practices.
Additionally,
the following discussion regarding our financial condition and results of
operations should be read in conjunction with the financial statements and
related notes contained in Item 1 of Part I of this Form 10-QSB, as well as
the
financial statements in Item 7 of Part II of our Form 10-KSB for the fiscal
year
ended March 31, 2006.
Goldrange
Resources will need additional capital to continue operations and will endeavor
to raise funds through the sale of equity shares and revenues from operations.
There can be no assurance that Goldrange Resources will generate revenues from
operations or obtain sufficient capital on acceptable terms, if at all. Failure
to obtain such capital or generate such operating revenues would have an adverse
impact on Goldrange Resources’ financial position and results of operations and
ability to continue as a going concern. Operating and capital requirements
during the next fiscal year and thereafter will vary based on a number of
factors, including the level of sales and marketing activities for services
and
products. There can be no assurance that additional private or public financing,
including debt or equity financing, will be available as needed, or, if
available, on terms favorable to Goldrange Resources. Any additional equity
financing may be dilutive to stockholders and such additional equity securities
may have rights, preferences or privileges that are senior to those of Goldrange
Resources existing common stock.
C. Description
of Property
The
Registrant does not own any real estate properties, instead it leases.
Goldrange
Resources executive offices are located at 5416 Birchman Avenue, Ft. Worth,
TX
and telephone number (817) 732-8739.
D. Security
Ownership of Certain Beneficial Owners and Management
Immediately
prior to the Contribution, there were 13,379,310 issued
and outstanding shares of Goldrange Resources’ common stock. At the closing of
the Contribution, Goldrange Resources issued 54,750,000 shares of its common
stock to the Contributors. After giving effect to the Contribution Agreement,
there were issued and outstanding 68,129,310 shares of Goldrange Resources
common stock.
The
following tables set forth certain information, as of February 1, 2007,
concerning shares of common stock of the Registrant, the only class of its
securities that are issued and outstanding, held by (1) each shareholder known
by the Registrant to own beneficially more than five percent of the common
stock, (2) each shareholder known by the Registrant to own beneficially more
than five percent of the preferred stock (3) each director of the Registrant,
(4) each executive officer of the Registrant, and (5) all directors and
executive officers of the Registrant as a group:
Common
Stock Beneficially Owned
|
Name
and Address of Beneficial Owner
|
Amount
and
Nature
of
Beneficial
Ownership
|
Percentage
of
Common
Stock
|
|
JMT
Resources Ltd. (Shareholder)
|
15,822,750
|
23.2%
|
|
Benco
Operating, Inc. (Shareholder)
|
16,041,750
|
23.5%
|
|
REO
Energy Ltd. (Shareholder)
|
22,855,500
|
33.5%
|
|
Mark
Zouvas (CEO & Director)
|
01
|
0%
|
|
M.O.
Rife III (Director)
|
02
|
0%
|
|
Brett
Bennett (V.P. & Director)
|
0
|
0%
|
|
Jean-Baptiste
Heinzer (Director)
|
0
|
0%
|
|
Alan
Rae (Director)
|
0
|
0%
|
|
All
directors and executive officers as a group
(5
persons )
|
0
|
0%
|
|
All
Shareholders as a group
|
54,750,000
|
80.2%
|
1
Mark S. Zouvas is a Managing Partner of JMT
Resources Ltd. and has an ownership interest.
2
M.O. Rife III is a Managing Partner of REO Energy
Ltd. and has an ownership interest.
There
are
no arrangements, known to us, including any pledge by any person of our
securities, the operation of which may at a subsequent date result in a change
in control of Goldrange Resources.
There
are
no arrangements or understandings among members of both the former and the
new
control groups and their associates with respect to election of directors or
other matters.
E. Directors
and Executive Officers, Promoters and Control Persons
On
February 1, 2007, Mark S. Zouvas was appointed as Goldrange Resources’ Chief
Executive Officer and Member of the Board of Directors nominee, Brett Bennett
was appointed as Vice President of Administration and as a Member of the Board
of Directors nominee, M.O. Rife III was appointed as Chairman of the Board
of
Directors nominee, Jean-Baptiste Heinzer was appointed as a Member of the Board
of Directors nominee and Alan Rae was appointed as a Member of the Board of
Directors nominee.
There
are
no family relationships between the directors, executive officers, or persons
nominated or chosen by the Registrant to become directors or executive officers.
During the last two years, there have been no transactions, or proposed
transactions, to which the Registrant was or is to be a party, had or is to
have
a direct or indirect material interest.
Biographies
M.
O. Rife III - Chairman of the Board. Mr.
Rife,
a founding partner in Matrix Energy Services Corporation, has been in the oil
and gas industry for 45 years and involved in the drilling, completion and
operating of over 3,500 wells throughout the mid-continent Region. The scion
of
one of Fort Worth’s first independent oil and gas producers, Mr. Rife learned
the business literally from the ground up and successfully launched and
completed drilling programs in Louisiana, Oklahoma, and New Mexico. Mr. Rife
attended Texas Christian University and began working in the oil field when
he
was eighteen. He worked with his father for 15 years, and then started his
own
company, Rife Oil Properties. He has been involved in the drilling, completion
and operating of over 1,500 wells throughout the mid-continent Region. Currently
Rife Oil Properties operates over 800 wells in Texas.
Mark
S. Zouvas - Chief Executive Officer. Mr.
Zouvas has a BA from the University of California at Berkeley. As a staff
auditor with Price Waterhouse, he performed services for clients in the banking
and real estate industries. He was a broker and an accountant in the state
of
California and served as an associate producer for CBS Television early in
his
career. Mr. Zouvas was involved in commodities trading and served as the CFO
for
a professional services division in a major commodities house. He was formerly
the Chief Financial Officer of a publicly traded oil and gas exploration firm
and was a member of their Board of Directors. Mr. Zouvas’ primary
responsibilities included fund raising, investor relations and corporate
compliance. He has had over fifteen years of experience in preparing investment
summaries and has raised over $75 million through debt and equity offerings
to
investors both domestically and abroad. He currently oversees the redevelopment
of JMT Resources’ Corsicana Field as their Managing Partner and is involved in
the acquisition of other strategic oil and gas assets.
J.
Brett Bennett - Vice President.
Mr.
Bennett joined Rife Energy Operating, Inc. in June of 2004 as Communications
Officer serving various capacities including investor relations and regulatory
reporting. He is the 4th
generation of the Bennett family involved in the oil and gas industry. Prior
to
joining Rife Energy, Mr. Bennett built a successful employee benefits/corporate
retirement solutions business in the Dallas/Ft. Worth market.
Jean-Baptiste
Heinzer- Director. Jean-Baptiste
started his career with Caterpillar in 1994. He was then called to turn
around his family's business and led it to a successful sale. He
then returned to industry as business development consultant. He was a Founder
of Equitys in 2002, a project management & corporate finance company.
Jean-Baptiste
is a graduated from the University of Lausanne business school & post
graduate in Corporate Finance from the University of Geneva.
Alan Rae
- Director.
Mr.
Rae
has over twenty-five years of diverse commercial experience, in the automotive,
financial and service industries as a consultant, business owner and manager.
As
a founder and CEO of O2Diesel Corp. ( AMEX -OTD), Mr. Rae has been responsible
for establishing O2Diesel’s position as the global leader in the development and
commercialization of ethanol/diesel fuel technologies. Mr. Rae studied
Mechanical Engineering in Glasgow, Scotland.
F. Executive
& Director Compensation
Executive
Compensation
Shown
on
the table below is information on the annual and long-term compensation for
services rendered to the Registrant in all capacities, for the 2006, 2005,
and
2004 fiscal years, paid by the Registrant to all individuals serving as the
Registrant’s chief executive officer or acting in a similar capacity during the
last three completed fiscal years, regardless of compensation level.
|
Name
and Principal Position
|
Yr.
|
Annual
Compensation
|
Long
Term Compensation
|
All
Other Compensation ($)
|
|
Salary
($)
|
Bonus
($)
|
Other
Annual Compensation ($)
|
Awards
|
Payouts
|
|
Restricted
Stock Award(s) ($)
|
Securities
Underlying Options/SARs (#)
|
LTIP
Payouts ($)
|
|
Steve
Bajic
(former
President & Director)
John
Hiner
(former
Director)
Mark
S. Zouvas
(Current
CEO & Director)
Brett
Bennett
(Current
V.P. & Director)
M.O.
Rife III
(Current
Director)
Jean-Baptiste
Heinzer
(Current
Director)
Alan
Rae
(Current
Director)
|
2004
2005
2006
2004
2005
2006
2006
2006
2006
2006
2006
|
0
2,000
36,000
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
0
0
0
0
0
0
N/A
N/A
N/A
N/A
N/A
|
Director
Compensation
The
directors of the Registrant have not received compensation for their services
as
directors nor have they been reimbursed for expenses incurred in attending
board
meetings.
G. Certain
Relationships and Related Transactions
Except
as
otherwise disclosed herein or incorporated herein by reference, there have
not
been any transactions, or proposed transactions, during the last two years,
to
which the Registrant was or is to be a party, in which any director or executive
officer of the Registrant, any nominee for election as a director, any security
holder owning beneficially more than five percent of the common stock of the
Registrant, or any member of the immediate family of the aforementioned persons
had or is to have a direct or indirect material interest.
H. Description
of Securities
Common
Each
share of common stock is entitled to one vote on all matters upon which such
shares can vote. All shares of common stock are equal to each other with respect
to the election of directors and cumulative voting is not permitted. There
are
no preemptive rights. In the event of liquidation or dissolution, holders of
common stock are entitled to receive, pro rata, the assets remaining, after
creditors, and holders of any class of stock having liquidation rights senior
to
holders of shares of common stock, have been paid in full. All shares of common
stock are entitled to such dividends as the Board of Directors may declare
from
time to time. There are no provisions in the articles of incorporation or bylaws
that would delay, defer or prevent a change of control. The Registrant does
not
have any other classes of issued and outstanding capital stock.
| |
I.
|
Market
Price of and Dividends on the Registrants Common Equity and Related
Stockholder Matters
|
We
currently have 68,129,310 shares of our common stock outstanding. Our shares
of
common stock are held by approximately 368 stockholders of record. The number
of
record holders was determined from the records of our transfer agent and does
not include beneficial owners of common stock whose shares are held in the
names
of various security brokers, dealers, and registered clearing
agencies.
The
Registrant has no plans to declare cash dividends on its common stock in the
future and has not declared any thus far during fiscal year 2006 or during
the
last two completed fiscal years. There are no restrictions that limit the
ability of the Registrant to declare cash dividends on its common stock and
the
Registrant does not believe that there are any that are likely to do so in
the
future.
J. Legal
Proceedings
This
Issuer is not aware of any threatened or pending legal proceedings.
K. Indemnification
of Directors and Officers
The
Registrant will indemnify its directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Nevada.
SECTION
3- SECURITIES AND TRADING MARKETS
Item
3.02 Unregistered
Sales of Equity Securities.
A. Sale
of Common Stock to the Investors
1. Section
4(2) of the Securities Act
The
shares were sold to the Investors without registration under Section 5 of the
Securities Act of 1933 in reliance on the exemption from registration contained
in Section 4(2) of the Securities Act. Section 4(2) of the Securities Act
exempts from registration transactions by an issuer not involving any public
offering. To qualify for this exemption, the purchasers of the securities must
(1) have enough knowledge and experience in finance and business matters to
evaluate the risks and merits of the investment or be able to bear the
investment's economic risk, (2) have access to the type of information normally
provided in a prospectus, and (3) agree not to resell or distribute the
securities to the public. In addition, the registrant cannot use any form of
public solicitation or general advertising in connection with the
offering.
The
Registrant believes that all of the requirements to qualify to use the exemption
from registration contained in Section 4(2) of the Securities Act have been
satisfied in connection with the sale of its common stock to the Investors.
Specifically, (1) the Registrant has determined that the Investors are
knowledgeable and experienced in finance and business matters and thus are
able
to evaluate the risks and merits of acquiring the Registrant’s common stock; (2)
the Investors have advised the Registrant that they are able to bear the
economic risk of purchasing the common stock; (3) the Registrant has provided
the Investors with access to the type of information normally provided in a
prospectus; (4) pursuant to the Subscription Agreement, the Investors have
agreed not to resell or distribute the securities to the public; and (5) the
Registrant did not use any form of public solicitation or general advertising
in
connection with the offering.
B. Issuance
Pursuant to the Contribution Agreement
On
or
about February 1, 2007, the Registrant issued 54,750,000 shares of its common
stock to the Contributing Parties. The shares were issued as consideration
in
the Contribution Transaction pursuant to the Contribution Agreement, which
is
described above under Item 1.01 of this Current Report. The parties used a
valuation of $1.00 per share for the issuance.
1. Section
4(2) of the Securities Act
The
shares were issued to the Contributing Shareholders without registration under
Section 5 of the Securities Act of 1933 in reliance on the exemption from
registration contained in Section 4(2) of the Securities Act. The requirements
to qualify to use this exemption are described above.
The
Registrant believes that all of the requirements to qualify to use the exemption
from registration contained in Section 4(2) of the Securities Act have been
satisfied in connection with the issuance of the shares to the Contributing
Shareholders. Specifically, (1) the Registrant has determined that the
Contributing Shareholders are knowledgeable and experienced in finance and
business matters and thus they are able to evaluate the risks and merits of
acquiring the Registrant
SECTION
5- CORPORATE GOVERNANCE AND MANAGEMENT
Item
5.03 Amendments
to Articles of Incorporation or Bylaws: Change in Fiscal
Year.
On
February 5, 2007 Goldrange Resources amended and restated its articles of
incorporation to change its name from Goldrange Resources, Inc. to ReoStar
Energy Corporation.
The
Company is in the process of filing an Information Statement pursuant to Section
14 of the Securities Exchange Act of 1934.
Item
5.06 Change
in Shell Company Status.
The
Registrant was a shell company (as such term is defined in Rule 12b-2 under
the
Securities Exchange Act of 1934, as amended) immediately before the Contribution
Transaction. As a result of the Contribution Transaction, the Registrant has
acquired subsidiaries that possess operating businesses. Consequently, the
Registrant believes that the Contribution Transaction has caused it to cease
to
be a shell company. For information about the Contribution Transaction, please
see the information set forth above under Item 1.01 and Item 2.01 of this
Current Report, which information is incorporated hereunder by this
reference.
SECTION
9- FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01 Financial
Statements and Exhibits.
Financial
statements of Goldrange Resources Corp. and consolidated pro forma financial
information on Contributing following the acquisition will be provided in
accordance with the
acquisition required to be described in answer to Item 2.01 of this form,
financial statements of the business acquired shall be filed for the periods
specified in Rule 3-05(b) of Regulation S-X (17 CFR 210.3-05(b))
The
unaudited pro forma financial statements presented herein are for illustrative
purposes only. The pro forma adjustments are based upon available information
and certain assumptions that management believes are reasonable, and should
be
read in conjunction with the historical financial statements of Contributing
and
Goldrange Resources Corp. The un-audited pro forma information is not
necessarily indicative of the future financial position or operating results
of
the combined company.
(c) Exhibits.
SIGNATURES
Pursuant
to the requirement of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized this 6th
day of
February, 2007.
Goldrange
Resources, Inc.
/s/Mark
S. Zouvas
Mark
S.
Zouvas
Chief
Executive Officer