File No. 024-11669
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 1-A
TIER II OFFERING
OFFERING STATEMENT
UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT
| ReoStar
Energy Corp. |
| (Exact name of registrant
as specified in its charter) |
Date: September
___, 2023
| Nevada |
|
1382 |
|
20-8428738 |
(State of
Other Jurisdiction
Of Incorporation) |
|
(Primary Standard
Industry Code) |
|
(IRS Employer
Identification
No.) |
| Peter
H. Koch |
(310)
999-3506
info@reostarenergycorp.com |
| www.reostarenergycorp.com
|
| 87
N. Raymond Ave |
| Suite
200 |
| Pasadena |
California
91103 |
| |
| |
Please send copies
of all correspondence to our corporate business address: X
THIS OFFERING STATEMENT
SHALL ONLY BE QUALIFIED UPON ORDER OF THE COMMISSION, UNLESS A SUBSEQUENT AMENDMENT IS FILED INDICATING THE INTENTION TO BECOME QUALIFIED
BY OPERATION OF THE TERMS OF REGULATION A.
PART I - NOTIFICATION
Part I should be read
in conjunction with the attached XML Document for Items 1-6
PART I - END
PRELIMINARY OFFERING
CIRCULAR DATED ________________, 2021
An Offering Statement pursuant to Regulation
A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary
Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the
Offering Statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or
the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or
sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation
to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains
the URL where the Final Offering Circular or the Offering Statement in which such Final Offering Circular was filed may be obtained.
REOSTAR
ENERGY CORP.
87 N. Raymond Ave
– Suite 200
Pasadena, California
91103
(310) 999-3506; info@reostarenergycorp.com
37,500,000 SHARES
OF COMMON STOCK $2.00 PER SHARE
This Post-Qualification
Offering Circular Amendment (the “PQA”) amends the Offering Circular of REOSTAR ENERGY CORPORATION, a Nevada corporation,
dated January 20, 2022, as qualified on January 19, 2022, and as may be amended and supplemented from time to time, to: extend the expiration
date of this offering to September 4, 2024; and (b) revise the amount of shares to be registered to 37,500,000 and revise the offering
price of the 37,500,000 shares of Company common stock (the “Remaining Shares”) to $2.00 per share. No shares were sold under
the formerly Qualified Offering.
This is the public
offering of securities of ReoStar Energy Corp., a Nevada corporation. We are offering up to 37,500,000 shares of our Common Stock, par
value $0.0001 (“Common Stock”), at an offering price of $2.00 per share (the “Offered Shares”) by the Company.
This offering will terminate twelve months from the day the offering is qualified, subject to extension for up to thirty (30) days as
defined below or the date on which the maximum offering amount is sold (such earlier date, the “Termination Date”). The minimum
purchase requirement per investor is 5,000 Offered Shares ($10,000); however, we can waive the minimum purchase requirement on a case-by-case
basis in our sole discretion.
These securities
are speculative securities. Investment in the Company’s stock involves significant risk. You should purchase these securities only
if you can afford a complete loss of your investment. See the “Risk Factors” section on page 5 of this Offering Circular.
The proceeds of this
offering will not be placed into an escrow account. We will offer our Common Stock on a “best efforts” basis. As there is
no minimum offering, upon the approval of any subscription to this Offering Circular, the Company shall immediately deposit said proceeds
into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds.
Subscriptions are
irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. The Company, by determination of
the Board of Directors, in its sole discretion, may issue the Securities under this offering for cash, promissory notes, services, and/or
other consideration without notice to subscribers. All proceeds received by the Company from subscribers for this offering will be available
for use by the Company upon acceptance of subscriptions for the Securities by the Company.
Sale of these shares
will commence within two calendar days of the qualification date and it will be a continuous offering pursuant to Rule 251(d)(3)(i)(F).
This offering will
be conducted on a “best-efforts” basis, which means our officers will use their commercially reasonable best efforts in an
attempt to offer and sell the Shares. Our officers will not receive any commission or any other remuneration for these sales. In offering
the securities on our behalf, the Officers will rely on the safe harbor from broker-dealer registration set out in Rule 3a4-1 under the
Securities Exchange Act of 1934, as amended.
This Offering Circular
shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any
state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the laws
of any such state.
The Company is using
the Offering Circular format in its disclosure in this Offering Circular.
Investing in our
Common Stock involves a high degree of risk. See “Risk Factors” beginning on page 5 for a discussion of certain risks
that you should consider in connection with an investment in our Common Stock.
| |
|
Price
to Public(1) |
|
Underwriting
Discount and Commissions(2) |
|
Proceeds
to Issuer(3) |
|
Proceeds
to Other Persons |
| Per share |
$ |
2.00 |
$ |
0.00 |
$ |
2.00 |
$ |
0.00 |
| Total Maximum |
$ |
37,500,000 |
$ |
0.00 |
$ |
37,500,000 |
$ |
0.00 |
| (1) | We
do not intend to use commissioned sales agents or underwriters. |
| (2) | The
amounts
shown are before deducting offering costs to us, which
include legal, accounting, printing, due diligence, marketing, consulting, selling, and other
costs incurred in this offering, which we estimate will be $0 in the aggregate. See
the section entitled “Plan of Distribution.” |
Our Board of Directors used its business
judgment in setting a value of $2.00 per share to the Company as consideration for the stock to be issued under the offering. The sales
price per share bears no relationship to our book value or any other measure of our current value or worth.
We are offering to sell, and seeking offers
to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained
in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in
this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of
its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of
our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Offering Circular.
This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THE OFFERING CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN OFFERING STATEMENT
PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING
CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING
STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL
OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF A SALE TO YOU THAT CONTAINS THE URL WHERE
THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
GENERALLY, NO
SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME
OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT
DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING,
WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.
THESE SECURITIES
ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT.
PLEASE REFER TO ‘RISK FACTORS’ BEGINNING ON PAGE 7.
THE
COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT
PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT
TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES
OFFERED ARE EXEMPT FROM REGISTRATION.
You should rely only
on the information contained in this offering circular and the information we have referred you to. We have not authorized any person
to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different
from the information included in this offering circular. If anyone provides you with different information, you should not rely on it.
This offering circular is following
the offering circular format described in Part II (a)(1)(i) of Form 1-A.
The date of this offering
circular is ________, 2023
The following table of contents has been
designed to help you find important information contained in this offering circular. We encourage you to read the entire offering circular.
TABLE OF CONTENTS
You should rely only
on the information contained in this offering circular. We have not authorized anyone to provide you with additional information or information
different from that contained in this offering circular. We take no responsibility for and can provide no assurance as to the reliability
of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our common stock only in jurisdictions
where offers and sales are permitted. The information contained in this offering circular is accurate only as of the date of this offering
circular, regardless of the time of delivery of this offering circular or any sale of shares of our common stock. Our business, financial
condition, results of operations and prospects may have changed since that date.
PART - II
OFFERING CIRCULAR
SUMMARY
In this offering
circular, ‘‘REOSTAR ENERGY CORP.,’’ the “Company,’’ ‘‘we,’’, ‘‘us,’’
and ‘‘our,’’ refer to REOSTAR ENERGY CORP., unless the context otherwise requires. Unless otherwise indicated,
the term ‘‘fiscal year’’ refers to our fiscal year ending December 31. Unless otherwise indicated, the term ‘‘common
stock’’ refers to shares of the Company’s common stock.
This offering circular,
and any supplement to this offering circular include “forward-looking statements”. To the extent that the information presented
in this offering circular discusses financial projections, information or expectations about our business plans, results of operations,
products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements
can be identified using words such as “intends”, “anticipates”, “believes”, “estimates”,
“projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe
that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks
and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others,
the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial
Position and Results of Operations” section in this offering circular.
This summary only
highlights selected information contained in greater detail elsewhere in this offering circular. This summary may not contain all of
the information that you should consider before investing in our common stock. You should carefully read the entire offering circular,
including “Risk Factors” beginning on Page 6, and the financial statements, before making an investment decision.
The Company
We were originally
incorporated in the State of Nevada on November 29, 2004
Our corporate business
address is: 87 N. Raymond Ave, Suite 200, Pasadena, CA 91103. Our phone number is (310) 999-3506. Our E-Mail address info@reostarenergycorp.com
we maintain a website at www.reostarenergycorp.com information available on our website is not incorporated by reference in and is not
deemed a part of this offering circular.
Our company
Our independent auditor has expressed
substantial doubt about our ability to continue as a going concern given our lack of operating history and the fact to date, we have
had no revenues. The Company has not generated any revenues since inception and sustained an accumulated net loss of $(114,433) for the
period from inception to December 31, 2022. These factors, among others, raise substantial doubt about the ability of the Company to
continue as a going concern for a reasonable period.
The Offering
All dollar amounts
refer to US dollars unless otherwise indicated.
Through this offering,
we intend to qualify 37,500,000 shares for offering to the public. We are offering these shares at a price per share of $2.00. We will
receive all proceeds from the sale of the common stock.
| Securities
being offered by the Company |
|
37,500,0000
shares of common stock at a price of $2.00 per share. Our offering will terminate upon the earliest of (i) such time as all the common
stock has been sold pursuant to the Offering Statement or (ii) 365 days from the qualified date of this offering circular unless
extended by our Board of Directors for an additional 90 days. We may however, at any time and for any reason terminate the offering.
For more information, please refer to Item 14, page 27 of the Offering. |
| |
|
|
| Offering price per share |
|
We
will sell the shares at price per share of $2.00. |
| |
|
|
| Number of shares of
common stock outstanding before the offering of common stock |
|
88,343,919
common shares are currently issued and outstanding. |
| |
|
|
| Number of shares of
common stock outstanding after the offering of common stock |
|
125,843,919
common shares will be issued and outstanding if we sell all the shares we are offering herein. |
| |
|
|
| The minimum number of
shares to be sold in this offering |
|
None. |
| |
|
|
| Best efforts offering: |
|
We
are offering shares on a “best efforts” basis through our Chief Executive Officer, Mr. Koch, who will not receive any
discounts or commissions for selling the shares. There is no minimum number of shares that must be sold in order to close this offering. |
| |
|
|
| Market for the common
shares |
|
Our
common stock is not listed for trading on any exchange or automated quotation system. There can be no assurance that any
market for our common stock or any of our other securities will ever develop. |
| |
|
|
| Use of Proceeds |
|
We
intend to use the net proceeds to us for working capital. |
| |
|
|
| Termination of the Offering |
|
This
offering will terminate upon the earlier to occur of (i) 365 days after this Offering Statement becomes qualified with the Securities
and Exchange Commission, or (ii) the date on which all 37,500,0000 shares registered hereunder have been sold. We may, at our discretion,
extend the offering for an additional 90 days. At any time and for any reason we may also terminate the offering. |
| |
|
|
| Subscriptions: |
|
All
subscriptions once accepted by us are irrevocable. |
| |
|
|
| Risk
Factors: |
|
See
“Risk Factors” and the other information in this offering circular for a discussion of the factors you should consider
before deciding to invest in shares of our common stock. |
| |
|
|
| Restrictions
on Investment: |
|
Generally,
no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual
income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that
your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general
information on investing, we encourage you to refer to www.investor.gov. |
Item 1: Risk Factors
An investment
in our shares involves a high degree of risk and many uncertainties. You should carefully consider the specific factors listed below,
together with the cautionary statement that follows this section and the other information included in this Offering Circular, before
purchasing our shares in this offering. If one or more of the possibilities described as risks below actually occur, our operating results
and financial condition would likely suffer and the trading price, if any, of our shares could fall, causing you to lose some or all
of your investment. The following is a description of what we consider the key challenges and material risks to our business and an investment
in our securities.
Risks Related
to our Business
Our independent
auditor has expressed substantial doubt about our ability to continue as a going concern given our lack of operating history and the
fact that to date, we have generated no revenues.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The
Company has not generated any revenues since inception and sustained an accumulated net loss of ($117,260) for the period from inception
to June 30, 2023. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern
for a reasonable period. The Company’s continuation as a going concern is dependent upon, among other things, its ability
to generate revenues and its ability to obtain capital from third parties. No assurance can be given that the Company will
be successful in these efforts. If the Company ceases to continue as a going concern, you will lose your entire investment.
This offering
is being conducted by the Company without the benefit of an underwriter, who could have confirmed the accuracy of the disclosures in
our prospectus.
We have self-underwritten
our offering on a “best efforts” basis, which means: No underwriter has engaged in any due diligence activities to confirm
the accuracy of the disclosure in the prospectus or to provide input as to the offering price; the Company will attempt to sell the shares
and there can be no assurance that all of the shares offered under the prospectus will be sold or that the proceeds raised from the offering,
if any, will be sufficient to cover the costs of the offering; and there is no assurance that we can raise the intended offering amount.
As
a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
We
have not yet produced a net profit and may not in the near future, if at all. While we expect our revenue to grow, we have not achieved
profitability and cannot be certain that we will be able to sustain our current growth rate or realize sufficient revenue to achieve
profitability. Further, many of our competitors have a significantly larger user base and revenue stream but have yet to achieve profitability.
Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, increasing revenue throughout
the year and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
We are dependent
upon the proceeds of this offering to fund our business. If we do not sell enough shares in this offering to continue operations, this
could have a negative effect on the value of the common stock.
We must raise approximately $10,000,000 of the $75,000,000
offered in this offering unless we begin to generate enough revenues to finance operations as a going concern, we may experience liquidity
and solvency problems. Such liquidity and solvency problems may force us to cease operations if additional financing is not available.
Our minimal
operating history gives no assurances that our future operations will result in profitable revenues, which could result in the suspension
or end of our operations.
We have a limited
operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability
and positive cash flow is dependent upon the completion of this offering and our ability to generate revenues.
There is substantial
doubt as to our ability to continue as a going concern. We have incurred significant operating losses since our formation and expect
to incur significant losses in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as
we fund our operating losses and capital expenditures. As a result, we will need to generate significant revenues in order to achieve
and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve
or maintain profitability could negatively impact the value of our business and may cause us to go out of business.
We are a new
company with limited operating history, and we face a high risk of business failure that could result in the loss of your investment.
We are a development
stage company formed to carry out the activities described in this offering circular and thus have only a limited operating history upon
which an evaluation of our business can be made. We have limited business operations.
Accordingly, our
future revenue and operating results are difficult to forecast. As of the date of this Offering Circular, we have earned no revenue.
Failure to generate revenue in the future will cause us to go out of business, which could result in the complete loss of your investment.
Our officers
and directors control our company and may unilaterally make decisions regarding corporate transactions that are contrary to investor
interests.
Our officers and
directors currently own 100% of our outstanding voting securities. If less than $10 million is raised in this offering, our executive
officers and directors will continue to control our company. Our officers and directors have the ability to control the voting power
of our outstanding capital stock. Investors may find that his decisions are contrary to their interests. You should not purchase shares
unless you are willing to entrust all aspects of management to our officers and directors, or their successors. Management will have
the ability to make decisions regarding: (i) changing the business without shareholder notice or consent, (ii) make changes to the articles
of incorporation whether to issue additional common and preferred stock, including themselves, (iii) make employment decisions, including
compensation arrangements; and (iv) whether to enter into material transactions with related parties.
As a result, our
officers and directors will have control of the Company and be able to choose all our directors. Their interests may differ from the
ones of other stockholders. Factors that could cause their interests to differ from the other stockholders include the impact of corporate
transactions on the timing of business operations and their ability to continue to manage the business given the amount of time they
are able to devote to us.
Purchasers of the
offered shares may not participate in our management and, therefore, are dependent upon their management abilities. The only assurance
that our shareholders, including purchasers of the offered shares, have that our officers and directors will not abuse their discretion
in executing our business affairs, as their fiduciary obligation and business integrity. Such discretionary powers include, but are not
limited to, decisions regarding all aspects of business operations, corporate transactions, and financing.
Accordingly, no person
should purchase the offered shares unless willing to entrust all aspects of management to the officers and directors, or their successors.
Potential purchasers of the offered shares must carefully evaluate the personal experience and business performance of our management.
The price of
our common stock may continue to be volatile.
The trading price
of our common stock has been and is likely to remain highly volatile and could be subject to wide fluctuations in response to various
factors, some of which are beyond our control or unrelated to our operating performance. In addition to the factors discussed in this
“Risk Factors” section and elsewhere, these factors include: the operating performance of similar companies; the overall
performance of the equity markets; the announcements by us or our competitors of acquisitions, business plans, or commercial relationships;
threatened or actual litigation; changes in laws or regulations relating to our businesses; any major change in our board of directors
or management; publication of research reports or news stories about us, our competitors, or our industry or positive or negative recommendations
or withdrawal of research coverage by securities analysts; large volumes of sales of our shares of common stock by existing stockholders;
and general political and economic conditions.
In addition, the
stock market in general, and the market for developmental related companies in particular, has experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance of those companies’ securities. This litigation,
if instituted against us, could result in very substantial costs; divert our management’s attention and resources; and harm our
business, operating results, and financial condition.
Adverse developments
that develop in the global economy restricting the credit markets may materially and negatively impact our business.
Though current global
economic conditions appear stable and it has been several years from the last downturn in the world’s major economies which constrained
the credit markets, we must be aware that similar events could occur quickly and could heighten a number of material risks to our business,
cash flows, and financial condition, as well as our future prospects. Any such current or future issues involving liquidity and capital
adequacy affecting lenders could affect our ability to access credit facilities or obtain debt financing and could affect the ability
of lenders to meet their funding requirements when we need to borrow. Further, in the uncertain event that a public market for our stock
develops, any current or future volatility in the equity markets may make it difficult in the future for us to access the equity markets
for additional capital at attractive prices, if at all. Should a credit crisis develop in other countries, for example, which could create
concerns over any number of economic indicators, it could increase volatility in global credit and equity markets. If we are unable to
obtain credit or access capital markets, our business could be negatively impacted. For example, we may be unable to raise sufficient
capital from this offering.
Our operating
results may prove unpredictable, which could negatively affect our profit.
Our operating results
are likely to fluctuate significantly in the future due to a variety of factors, many of which we have no control. Factors that may cause
our operating results to fluctuate significantly include: our inability to generate enough working capital from operations our inability
to secure long-term service contract with the utilities that benefit from the installed technology; the level of commercial acceptance
of our technology; fluctuations in the demand for our technology; the amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations and infrastructure and general economic conditions. If realized, any of these risks could have
a material adverse effect on our business, financial condition, and operating results.
Key management
personnel may leave the Company, which could adversely affect the ability of the Company to continue operations.
Because we are entirely
dependent on the efforts of our officers and directors, any one of their departure or the loss of other key personnel in the future,
could have a material adverse effect on the business. We believe that all commercially reasonable efforts have been made to minimize
the risks attendant with the departure by key personnel from service.
However, there is
no guarantee that replacement personnel, if any, will help the Company to operate profitably. We do not maintain key-person life insurance
on any of our officers and directors.
If our Company
is dissolved, it is unlikely that there will be sufficient assets remaining to distribute to our shareholders.
In the event of the
dissolution of our company, the proceeds realized from the liquidation of our assets, if any, will be used primarily to pay the claims
of our creditors, if any, before there can be any distribution to the shareholders. In that case, the ability of purchasers of the offered
shares to recover all or any portion of the purchase price for the offered shares will depend on the amount of funds realized and the
claims to be satisfied there from.
If we are unable
to manage our future growth, our business could be harmed, and we may not become profitable.
Significant growth
may place a significant strain on management, financial, operating and technical resources. Failure to manage growth effectively could
have a material adverse effect on the Company’s financial condition or the results of its operations.
You are not expected to have any
protection under the Investment Company Act.
The Company will not register and does
not expect in the future to be required to register as an investment company under the Investment Company Act of 1940, as amended (the
“40 Act”), in reliance upon an exemption therefrom under Section 3(c)(9). Among other things, the 40 Act generally requires
investment companies to have a minimum of forty percent (40%) independent directors and regulates the relationship between the investment
adviser (i.e., the Manager) and the investment company (i.e., the Company), in particular with regard to affiliated transactions. Such
protections, and others afforded by the 40 Act, are not expected to be applicable to the Company. Should the 40 Act become applicable
to the Company, these protections may be implemented in a manner that alters other rights and obligations of the Company and/or you with
respect to other matters.
You may not have any protection
under the Investment Advisers Act.
The Manager is not registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”) but may register in the future. The
Advisers Act contains many provisions designed to protect clients of investment advisers, including, among other things, restrictions
on the charging by registered investment advisers of performance-based compensation. Such protections, and others afforded by the Advisers
Act, are not expected to be applicable to the Manager and to the Company. Should the Advisers Act become applicable to the Manager and
to the Company, these protections may be implemented in a manner that alters other rights and obligations of the Company and/or you with
respect to other matters.
Competitors
may enter this sector with superior infrastructure and backing, infringing on our customer base, and affecting our business adversely.
We have identified
a market opportunity for our services. Competitors may enter this sector with superior service. This would infringe on our customer base,
having an adverse effect upon our business and the results of our operations.
Since we anticipate
operating expenses will increase prior to earning revenue, we may never achieve profitability.
There is no history
upon which to base any assumption as to the likelihood that we will prove successful. We cannot provide investors with any assurance
that our products and services will attract potential buyers, generate any operating revenue, or ever achieve profitable operations.
If we are unable to address these risks, there is a high probability that our business can fail, which will result in the loss of your
entire investment.
COVID-19 and
similar health epidemics and contagious disease outbreaks could significantly disrupt our operations and adversely affect our business,
results of operations, cash flows or financial condition.
In December 2019,
a novel strain of coronavirus (“COVID-19”) was identified, and on March 11, 2020, the World Health Organization declared
COVID-19 as a global pandemic. Numerous state and local jurisdictions have imposed, and others in the future may impose, “shelter-in-place”
orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19.
In particular, the governments in jurisdictions where our employees are located have imposed limitations on gatherings, social distancing
measures and restrictions on movement, only allowing essential businesses to remain open. Such restrictions have resulted in temporary
store closures, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other restrictions, any of
which may negatively impact workforces, customers, consumer sentiment and economies in many markets and, along with decreased consumer
spending, have led to an economic downturn throughout much of the world.
Our business is largely
tied to the disposable income of our subscribers and clients. The global economic and financial uncertainty may result in significant
declines to the number of clients using our products. See “— A reduction in discretionary consumer spending could have
an adverse impact on our business.”
In response to the
COVID-19 outbreak, we will transition many of our future employees to remote working arrangements. It is possible that this could have
a negative impact on the execution of our business plans and operations. If a natural disaster, power outage, connectivity issue, or
other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible,
for us to continue our business for a substantial period of time. The increase in remote working may also result in player privacy, IT
security and fraud concerns as well as increase our exposure to potential wage and hour issues.
The degree to which
COVID-19 affects our financial results and operations will depend on future developments, which are highly uncertain and cannot be predicted,
including, but not limited to, the duration and spread of the outbreak, its severity, the governmental actions and regulations imposed
to contain the virus or treat its impact, how quickly and to what extent pre-pandemic economic and operating conditions can resume and
overall changes in players’ behavior. To the extent the COVID-19 pandemic could affect our business and financial results, it may
also have the effect of heightening other risks described in this “Risk Factors” section.
Risks Related
to This Offering
Due to the
lack of a current public market for our common stock, investors may have difficulty in selling stock they purchase.
Prior to this offering,
no public trading market existed for our securities. There can be no assurance that a public trading market for our common stock will
develop or that a public trading market, if developed, will be sustained. Because there is none and may be no public market for our stock,
we may not be able to secure future equity financing which would have a material adverse effect on our company
Furthermore, when
and if our common stock is eligible for quotation on the OTC Market, there can also be no assurance as to the depth or liquidity of any
market for the common stock or the prices at which holders may be able to sell the shares.
As a result, investors
could find it more difficult to trade, or to obtain accurate quotations of the market value of, the stock as compared to securities that
are traded on the NASDAQ trading market or on an exchange. Moreover, an investor may find it difficult to dispose of any shares purchased
hereunder.
Investors may
have difficulty in reselling their shares due to the lack of market or state Blue Sky laws.
Our common stock
is currently not quoted on any market. No market may ever develop for our common stock, or if developed, may not be sustained in the
future. The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in
the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly,
even if we are successful in having our securities available for trading on the OTC Market, investors should consider any secondary market
for our securities to be a limited one. We intend to seek coverage and publication of information regarding the Company in an accepted
publication which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular
state without being registered if the company issuing the security has a listing for that security in a securities manual recognized
by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the
names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal
year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing
all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making
it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s,
Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize
these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized
manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin. Accordingly, our shares should be considered
totally illiquid, which inhibits investors’ ability to resell their shares.
Investing in
our company is highly speculative and could result in the entire loss of your investment.
Purchasing the offered
shares is highly speculative and involves significant risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. Our business objectives are also speculative, and it is possible that we would be unable to accomplish
them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their
entire investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits
carefully and consult with their attorney, business and/or investment advisor.
Investing in
our company may result in an immediate loss because buyers will pay more for our common stock than what the pro rata portion of the assets
are worth.
The offering price
and other terms and conditions regarding our shares have been arbitrarily determined and do not bear any relationship to assets, earnings,
book value or any other objective criteria of value. No investment banker, appraiser or other independent third party has been consulted
concerning the offering price for the shares or the fairness of the offering price used for the shares.
The price of per
share as determined herein is substantially higher than the net tangible book value per share of our common stock. Our assets do not
substantiate a share price of $2.00. This premium in share price applies to the terms of this offering. The offering price will not change
for the duration of the offering even if a market develops in our securities.
We have 200,000,000
authorized shares of common stock, of which 88,343,919 shares are currently issued and outstanding and 125,843,919 shares will be issued
and outstanding after this offering terminates (assuming all shares have been sold). Our management could, with the consent of the existing
shareholders, issue substantially more shares, causing a large dilution in the equity position of our current shareholders.
We may, in
the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share
value.
Our articles of incorporation
authorize the issuance of 200,000,000 shares of common stock. Upon completion of this offering, we will have approximately 125,843,919
shares of common stock issued and outstanding if all shares offered are sold. Accordingly, we may issue up to an additional 74,156,081
shares of common stock after this offering. The future issuance of common stock may result in substantial dilution in the percentage
of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis.
The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value
of the shares held by our investors and might have an adverse effect on any trading market for our common stock.
As we do not
have an escrow or trust account with the subscriptions for investors, if we file for or are forced into bankruptcy protection, investors
will lose their entire investment.
Invested funds for
this offering will not be placed in an escrow or trust account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the bankruptcy estate and administered according to the bankruptcy
laws. As such, you will lose your investment and your funds will be used to pay creditors.
We do not anticipate
paying dividends in the foreseeable future, so there will be less ways in which you can make a gain on any investment in us.
We have never paid
dividends and do not intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently
not provided for in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay
dividends, any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore
be fewer ways in which you are able to make a gain on your investment.
In the event
that our shares are traded, they may trade under $5.00 per share, and thus will be considered a penny stock. Trading penny stocks has
many restrictions and these restrictions could severely affect the price and liquidity of our shares.
In the event that
our shares trade below $5.00 per share, our stock would be known as a “penny stock”, which is subject to various regulations
involving disclosures to be given to you prior to the purchase of any penny stock. The U.S. Securities and Exchange Commission (the “SEC”)
has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our common stock could be considered to be a “penny
stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities
to persons other than established customers and accredited investors. For transactions covered by these rules, the broker/dealer must
make a special suitability determination for the purchase of these securities. In addition, he must receive the purchaser’s written
consent to the transaction prior to the purchase. He must also provide certain written disclosures to the purchaser. Consequently, the
“penny stock” rules may restrict the ability of broker/dealers to sell our securities and may negatively affect the ability
of holders of shares of our common stock to resell them. These disclosures require you to acknowledge that you understand the risks associated
with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks are low priced securities that do not
have a very high trading volume. Consequently, the price of the stock is often volatile, and you may not be able to buy or sell the stock
when you want to.
Governing Law
and Legal Venue
This Offering shall be construed in accordance with, and governed by, the
laws of the District Court of the Clark County Judicial District of the State of Nevada for any claim as to which the Clark County District
Court of the State of Nevada has jurisdiction. Unless any claim as to which the Clark County District Court of the State of Nevada determines
there is an indispensable party not subject to the jurisdiction of the Clark County District Court of the State of Nevada (and the indispensable
party does not consent to the personal jurisdiction of the Clark County District Court of the State of Nevada within ten days following
such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Clark County District Court of the
State of Nevada, or for which the Clark County District Court of the State of Nevada does not have subject matter jurisdiction. This provision
does not, nor is intended to, apply to claims under the Federal securities laws. This
exclusive legal forum provision could add significant cost, discourage claims, and limits the ability of investors to bring a claim in
a more favorable legal forum or jurisdiction. This provision does not apply to purchasers in secondary transactions. This provision also
does apply to the Subscription Agreement for this Offering. This provision is not in the Company’s Articles or By-Laws at this time.
Financial Industry
Regulatory Authority (“FINRA”) sales practice requirements may also limit your ability to buy and sell our common stock,
which could depress the price of our shares.
FINRA rules require
broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment
to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other
things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities
will not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that
their customers buy our common stock, which may limit your ability to buy and sell our shares, have an adverse effect on the market for
our shares, and thereby depress our share price.
Status as Not a
Shell Company
The Company it is
not a “shell company” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, The Company is a “start-up”
company which the Commission explicitly differentiates in Footnote 172 to SEC Release No. 33-8869 from “shell” companies
covered under Rule 144(i)(1)(i) (the “Rule”). In adopting the definition of a shell company in SEC Release
No. 33-8587 (the “Release”), the Commission stated that it intentionally did not define the term “nominal”
and it did not set a quantitative threshold of what constitutes a shell company. Indeed, under the Rule, the threshold for what is considered
“nominal” is, to a large degree, subjective and based upon facts and circumstances of each individual case.
The Company is actively
engaged in the implementation and deployment of its business plan. These activities include:
The Company’s
operations are more than just “nominal.” As the Commission points out in its Release, there are no established quantitative
thresholds to determine whether a company’s operations are in-fact “nominal”. Instead, the determination is to be made
on a case-by-case basis, with significant regards to a subjective analysis aimed at preventing serious problems from allowing scheming
promoters and affiliates to evade the definition of a “shell” company (as well as the intent of the Rule). As described in
Footnote 32 to the Release, the Commission expounds its rationale for declining to quantitatively define the term “nominal”
regarding a shell company.
It is reasonably
commonplace that development stage or “start-up” companies have limited assets and resources, as well as having a going concern
explanatory paragraph in the report of its independent registered public accounting firm. The Company is considering all possible avenues
to develop its business model. The Company believes that by being a company this should increase its image and credibility in the marketplace
and provide possible sources of funding for its business.
The Company’s
management has been working at implementing the Company’s core business strategy, including, but not limited to, and business development
in anticipation of its progressing operations and the development of its business model. The Company’s operations are more than
“nominal” and that it does not fall within the class of companies for which the Commission was aiming to prevent as referenced
in Release Footnote 32.
The price of the
current offering is fixed a $2.00 per share. This price is significantly higher than the price paid by the Company’s officers and
directors and early investors which was $0.0021.
An early-stage company
typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost because they
are, in effect, putting their “sweat equity” into the company. When the company seeks cash from outside investors, the new
investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of
the new investors stake is diluted because each share of the same type is worth the same amount, and the new investor has paid more for
the shares than earlier investors did for theirs.
We intend to sell
37,500,0000 shares of our Common Stock. We were initially capitalized by the sale of our Common Stock. The following table sets forth
the number of shares of Common Stock purchased from us, the total consideration paid and the price per share. The table assumes all 37,500,0000
shares of Common Stock will be sold.
| | |
Shares
Issued | |
Total
Consideration | |
Price |
| | |
Number | |
Percent | |
Amount | |
Percent | |
Per Share |
| Existing Shareholders | |
| 88,343,919 | | |
| 70 | % | |
$ | 185,522 | | |
| 1 | % | |
$ | 0.0021 | |
| Purchasers of Shares | |
| 37,500,000 | | |
| 30 | % | |
$ | 75,000,000 | | |
| 99 | % | |
$ | 2.0000 | |
| Total | |
| 125,843,919 | | |
| 100.0 | % | |
$ | 75,185,522 | | |
| 100 | % | |
$ | 0.6000 | |
Note: The offering
price of $2.00 was used as the baseline for dilution.
The following table
sets forth the difference between the offering price of the shares of our Common Stock being offered by us (If all 37.5 million shares
are sold and the full $75 million is raised), the net tangible book value per share, and the net tangible book value per share after
giving effect to the offering by us, assuming that 25%, 50%, 75% and 100% of the offered shares are sold. Net tangible book value per
share represents the amount of total tangible assets less total liabilities divided by the number of shares outstanding as of December
31, 2022. Totals may vary due to rounding.
| |
|
25%
of offered |
|
50%
of offered |
|
75%
of offered |
|
100%
of offered |
| shares
are sold |
shares
are sold |
shares
are sold |
shares
are sold |
| Offering
Price |
$ |
$ 2.00
|
|
$ 2.00
|
|
$ 2.00
|
|
$ 2.00
|
| |
|
|
|
|
|
|
|
|
| Net
tangible book value at May 31, 2021 |
$ |
0.00 |
|
0.00 |
|
0.00 |
|
0.00 |
| |
|
|
|
|
|
|
|
|
| Net
tangible book value after giving effect to the offering |
$ |
0.19 |
|
0.350 |
|
0.483 |
|
0.596 |
| |
|
|
|
|
|
|
|
|
| Increase
in net tangible book value per share attributable to cash payments made by new investors |
$ |
0.192 |
|
0.350 |
|
0.483 |
|
0.596 |
| |
|
|
|
|
|
|
|
|
| Per
Share Dilution to New Investors |
$ |
1.81 |
|
1.65 |
|
1.52 |
|
1.40 |
| |
|
|
|
|
|
|
|
|
| Percent
Dilution to New Investors |
|
90.43 |
|
82.51 |
|
75.87 |
|
70.22 |
| Item 3: | SELLING
SHAREHOLDERS |
None
| Item 4: | DETERMINATION
OF OFFERING PRICE |
The offering price
of the common stock is not fixed and has been arbitrarily determined and bears no relationship to any objective criterion of value. The
price does not bear any relationship to our assets, book value, historical earnings, or net worth. No valuation or appraisal has been
prepared for our business. We cannot assure you that a public market for our securities will develop or if developed, it will continue
or that the securities will ever trade at a price higher than the offering price.
| Item 5: | PLAN
OF DISTRIBUTION |
Our common stock
offered through this offering is being made by the Company through a direct offering. Our Common Stock may be sold or distributed from
time to time by the Company utilizing general solicitation through the internet, social media, and any other means of widespread communication.
The sale of our common stock offered by us through this offering may be effected by one or more of the following methods: internet, social
media, and any other means of widespread communication including but not limited to crowdfunding sites, ordinary brokers’ transactions;·
transactions involving cross or block trades; through brokers, dealers, or underwriters who may act solely as agents; in other ways not
involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;·
in privately negotiated transactions; or· any combination of the foregoing. Brokers, dealers, underwriters, or agents participating
in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the Company
and/or purchasers of the common stock for whom the broker-dealers may act as agent. The Company has 88,343,919 shares of common stock
issued and outstanding as of the date of this offering circular. The Company is registering an additional 37,500,0000 shares of its common
stock for sale at $2.00 per share.
Our offering will
terminate upon the earliest of (i) such time as all the common stock has been sold pursuant to the Offering Statement or (ii) 365 days
from the qualified date of this offering circular unless extended by our Board of Directors for an additional 90 days. We may however,
at any time and for any reason terminate the offering.
There is no arrangement
to address the possible effect of the offering on the price of the stock.
In connection with
the Company’s selling efforts in the offering, our officers and directors will not register as a broker-dealer pursuant to Section
15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
Generally speaking,
Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an
issuer that participate in an offering of the issuer’s securities. Peter Koch is not subject to any statutory disqualification,
as that term is defined in Section 3(a)(39) of the Exchange Act. Peter Koch will not be compensated in connection with his participation
in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities.
Peter Koch will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance
on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
In
the following states we cannot offer or sell our shares of common stock unless we register as an issuer dealer: Alabama, Arizona, Florida,
Nebraska, Delaware, New Jersey, New York, North Dakota, Texas, and Washington. If we wish to offer and sell our shares of common stock
in these states, we will hire an SEC registered broker-dealer to serve as our placement agent. We may, however, decide to comply with
a particular state’s issuer dealer registration requirements, in New York, for example, if we deem it appropriate.
The Company will
receive all proceeds from the sale of the 37,500,0000 shares being offered on behalf of the company itself. The Company’s shares
may be sold to purchasers from time to time directly by and subject to the discretion of the Company. The shares of common stock sold
by the Company may be occasionally sold in one or more transactions; all shares sold under this offering circular will be sold at a fixed
price of $2.00 per share.
The Company will
pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states),
which we expect to be no more than $50,000.
Procedures for
Subscribing
If you decide to
subscribe for any shares in this offering, you must
| · | Execute
and deliver a subscription agreement; and |
| · | Deliver
a check or certified funds to us for acceptance or rejection. |
All checks for subscriptions
must be made payable to “REOSTAR ENERGY CORP.”. The Company will deliver stock certificates attributable to shares of common
stock purchased directly to the purchasers within ninety (90) days of the close of the offering.
Right to Reject
Subscriptions
We have the right
to accept or reject subscriptions in whole or in part, for any reason or for no reason. All money from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected
with letter by mail within 48 hours after we receive them.
Investment
Limitations
As set forth
in Title IV of the JOBS Act, there are limits on how many shares an investor may purchase if the offering does not result in a listing
on a national securities exchange. The following would apply unless we are able to obtain a listing on a national securities exchange.
Generally,
in the case of trading on the over-the-counter markets, no sale may be made to you in this offering if the aggregate purchase price you
pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural
persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule
251(d)(2)(i)c of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov .
| (viii) | Because
this is a Tier 2, Regulation A offering, most investors in the case of trading on the over-the-counter
markets must comply with the 10% limitation on investment in the offering. The only investor
in this offering exempt from this limitation is an “accredited investor” as defined
under Rule 501 of Regulation D under the Securities Act. If you meet one of the following
tests you should qualify as an accredited investor) You are a natural person who has had
individual income in excess of $200,000 in each of the two most recent years, or joint income
with your spouse in excess of $300,000 in each of these years and have a reasonable expectation
of reaching the same income level in the current year. |
(ii)
You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase
shares of our common stock in the offering.
(iii)
You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer.
(iv)
You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation,
a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the shares in this offering,
with total assets in excess of $5,000,000.
(v)
You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered
pursuant to Section 15 of the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under
the Investment Company Act of 1940, or a business development company as defined in that act, any Small Business Investment Company licensed
by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;
(vi)
You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor.
(vii)
You are a trust with total assets in excess of $5,000,000, your purchase of shares of our common stock in the offering is directed by
a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has
such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective
investment, and you were not formed for the specific purpose of investing in the shares in this offering; or
(viii)
You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.
Blue Sky
Law Considerations
The holders
of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be
aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we
are successful in having the shares available for trading on the OTC Market, investors should consider any secondary market for our securities
to be a limited one. There is no guarantee that our stock will ever be quoted on the OTC Market. We intend to seek coverage and publication
of information regarding our company in an accepted publication, which permits a “manual exemption”. This manual exemption
permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing
for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized
manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3)
a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations.
We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption
restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted
manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s
Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities
manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly
recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin.
We currently
do not intend to and may not be able to qualify securities for resale in other states, which require shares to be qualified before they
can be resold by our shareholders.
Item 6: USE OF PROCEEDS
Our offering is being
made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The offering price
per share is $2.00. The following table sets forth the uses of proceeds assuming the sale of 100%, 75%, 50%, and 25% of the securities
offered for sale by the Company. There is no assurance that we will raise the full $75,000,000 as anticipated.
If 37,500,0000
shares (100%) are sold:
Next 12 months
| Planned
Actions |
Estimated
Cost to Complete |
| Salary
for current or future employees |
$
5,625,000 |
| Development
costs associated with identified projects |
16,875,000 |
| Development
costs for future projects |
22,500,000 |
| Marketing
and public relations |
18,750,000 |
| General
operating capital |
11,250,000
|
| TOTAL |
$75,000,0000 |
If 28,125,000
shares (75%) are sold:
Next 12 months
| Planned
Actions |
Estimated
Cost to Complete |
| Salary
for current or future employees |
$4,218,750 |
| Development
costs associated with identified projects |
12,656,250 |
| Development
costs for future projects |
16,875,000 |
| Marketing
and distribution costs of service(s) |
14,062,500 |
| General
operating capital |
8,437,500
|
| TOTAL |
$
56,250,000 |
If 18,750,000
shares (50%) are sold:
Next 12 months
| Planned
Actions |
Estimated
Cost to Complete |
| Salary
for current or future employees |
$2,812,500 |
| Development
costs associated with identified projects |
8,437,500 |
| Development
costs for future projects |
11,250,000 |
| Marketing
and distribution costs of service(s) |
9,375,000 |
| General
operating capital |
5,625,000
|
| TOTAL |
$
37,500,000 |
If 9,375,000 shares
(25%) are sold:
Next 12 months
| Planned
Actions |
Estimated
Cost to Complete |
| Salary
for current or future employees |
$
1,406,250 |
| Development
costs associated with identified projects |
4,218,750 |
| Development
costs for future projects |
5,625,000
|
| Marketing
and distribution costs of service(s) |
4,687,500 |
| General
operating capital |
2,812,500 |
| TOTAL |
$
18,750,000 |
The above figures
represent only estimated costs for the next 12 months.
Notes: 1.
Development cost related “Future projects” include potential new product development or acquisition with the additional expense
of travel to potential suppliers and educational consumer related developments.
2.
“Marketing and distribution costs” includes, but is not limited to, preparation of printed materials, digital marketing,
webinars, travel to meet with potential investors/consumers, etc. Initially the print and digital marketing work will be outsourced,
but the Company may elect to hire a full-time marketing director.
3. “Identified
Projects” include, but is not limited to, the following: establishing logistics centers with third parties, payment processing
arrangements, inventory control and management systems.
Item 7: Description
of Business
Our Company
We were originally
incorporated in the State of Nevada on November 29, 2004, as Goldrange Resources Inc. and the name was changed to Reostar Energy Corporation
on 02/07/2007
Our corporate business
address is: 87 N. Raymond Ave, Suite 200, Pasadena CA 91103. Our telephone number is 626-569-9688. Our E-Mail address is info@reostarenergycorp.com.
The address for our
web site is www.reostarenergycorp.com The information on our web site is general information and is a marketing outlet It is not part
of this report due to disclosure purposes of liability under the federal securities laws.
About
the Company
Interested in
Our Interested in are
anyone of any age, background and ethnicity that are interested the oil and gas sector.
Future of the Company
ReoStar energy
corporation plans to impact the environment by helping fund projects that lead towards a Net Zero Carbon Neutral future. We plan to acquire
companies in the future to expand our vision and impact the environment positively. ReoStar plans to follow the Carbon Neutral
protocols to be a Net Zero Carbon Neutral Energy Company by 2050. This will generate an immediate strong asset and cash flow basis
for REOS.
Legal Structure
REOSTAR ENERGY CORP. is a corporation,
incorporated in Nevada, United States.
Market Outlook and Opportunity
Industry
ReoStar Energy Corp. understands
that the gas and oil industry are the two largest sectors in the world in terms of dollar value. Generating an estimate of about 1 trillion
of dollars of revenue every year. The United States have over 600,000 oil wells producing over 9,000,000 barrels of oil every day worldwide.
With the US being the largest oil producer, we believe it is crucial to the economy of the country.
Competition
ReoStar Energy Corp. is a company that
is seeking oil/ and or natural gas properties with exiting production as well as proven undeveloped reserves to develop and produce.
Because many of the companies in the market are privately owned, we understand that we can only attain minimal information about our
competitors. Majority of competitors in the market have larger operations and have more resources. Our competitors are OQ Cheniere Energy,
Chevron, ExxonMobil Chemical, MOL Group, Air Liquide, ENGIE, Shell, BP, and OMV Group.
Regulations
ReoStar Energy Corp. must
meet all Federal and state regulations concerning oil and gas businesses.
Intellectual Property
There is currently no intellectual
property. The Company does plan to trademark name ReoStar Energy Corp and its logo under ReoStar with the USPTO. We have also registered
our domain name and parked relevant social media accounts for future use.
Reports to Security
Holders
After the completion
of this Tier II, Regulation A offering, we intend to become subject to the information and periodic reporting requirements of the Exchange
Act. If we become subject to the reporting requirements of the Exchange Act, we will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and other information will be available for inspection and copying
at the public reference room and on the Commission’s website at: http://www.sec.gov/cgi-bin/browse-edgar?company=vortex+brands&owner=exclude&action=getcompany
.. Until we become or never become subject to the reporting requirements of the Exchange Act, we will furnish the following reports, statements,
and tax information to each stockholder:
7.
1. Reporting
Requirements under Tier II of Regulation A. Following this Tier II, Regulation A offering, we will be required to comply with certain
ongoing disclosure requirements under Rule 257 of Regulation A. We will be required to file: an annual report with the SEC on Form 1-K;
a semi-annual report with the SEC on Form 1-SA; current reports with the SEC on Form 1-U; and a notice under cover of Form 1-Z. The necessity
to file current reports will be triggered by certain corporate events, similar to the ongoing reporting obligation faced by issuers under
the Exchange Act, however the requirement to file a Form 1-U is expected to be triggered by significantly fewer corporate events than
that of the Form 8-K. Such reports and other information will be available for inspection and copying at the public reference room and
on the Commission’s, website referred to above. Parts I & II of Form 1-Z will be filed by us if and when we decide to and are
no longer obligated to file and provide annual reports pursuant to the requirements of Regulation A. The Company may in the future file
a Form 8-A and elect to come under the Exchange Act and it’s reporting requirements, but there is no assurance the Company will
elect to do so.
Legal Proceedings
From time to time,
we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We
are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business,
prospects, financial conditions, or results of operations. We may become involved in material legal proceedings in the future.
Emerging Growth
Company Status
We are an “emerging
growth company,” as defined in the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory
votes on golden parachute compensation.
Under the JOBS Act,
we will remain an “emerging growth company” until the earliest of:
| · | the
last day of the fiscal year during which we have total annual gross revenues of $1 billion
or more. |
| · | the
last day of the fiscal year following the fifth anniversary of the effective date of this
registration statement. |
| · | the
date on which we have, during the previous three-year period, issued more than $1 billion
in non- convertible debt; and |
| · | the
date on which we are deemed to be a “large accelerated filer” under the Securities
Exchange Act of 1934, or the Exchange Act. |
We will qualify as
a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common
equity held by our non-affiliates and (ii) been public for at least 12 months. The value of our outstanding common equity will be measured
each year on the last day of our second fiscal quarter.
The Section 107 of
the JOBS Act provides that we may elect to utilize the extended transition period for complying with new or revised accounting standards
and such election is irrevocable if made. As such, we have made the election to use the extended transition period for complying with
new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
Going Concern
Our auditors have
expressed substantial doubt about our ability to continue as a going concern. As discussed in Note 3 to the financial statements, the
Company has suffered losses and has experienced negative cash flows from operations, which raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to those matters are also described in Note 3 to the financial statements.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| Item 8: | Description
of Property |
The main office is under a month-to-month
sub-lease executed on a January 15, 2021 with Koch Partners International and is located at 87 N. Raymond Ave, Suite 200, Pasadena, CA
91103. Our monthly rental rate is $150.00.
| Item 9: | Management’s
Discussion and Analysis of Financial Condition and Results of Operation |
You should read
the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this
discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our
business and related financing, includes forward-looking statements that reflect our current views with respect to future events and
financial performance, which involve risks and uncertainties. Forward-looking statements are often identified by words like: “believe”,
“expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions,
or words that, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which
apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical results or our predictions. You should review the “Risk Factors”
section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results
described in or implied by the forward-looking statements contained in the following discussion and analysis.
Our financial statements
are stated in United States Dollars (USD or US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
All references to “common shares” refer to the common shares in our capital stock.
Overview
Our Company provides ReoStar
Energy Corporation plans to impact the environment by helping fund projects that lead towards a Net Zero Carbon Neutral future. We plan
to acquire companies in the future that expand our vision and impact the environment positively. ReoStar Energy Corporation has a two-fold
mission: Aggregate existing oil production and production from proven reserve fields to maximize revenues. Segregate some
those hydrocarbon revenues to acquire alternative energy sources. ReoStar plans to follow the Carbon Neutral protocols
to be a Net Zero Carbon Neutral Energy Company by 2050. ReoStar is poised to be one of the most exciting companies in the energy
sector striving to bring significant value to its shareholders
Results of Operations
There is limited historical financial information
about us upon which to base an evaluation of our performance. We have not generated revenues from our operations. We cannot guarantee
we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise,
including the financial risks associated with the limited capital resources currently available to us for the implementation of our business
strategies. (See “Risk Factors”). To become profitable and competitive, we must develop the business plan and execute the
plan. Our management will attempt to secure financing through various means including borrowing and investment from institutions and private
individuals.
Since inception, most of our time has been spent refining
and implementing our business plan.
During the period January 1, 2023 to June 30,2023
we did not generate any income. We incurred total operating expenses of $2,827 consisting of $1,779 in professional fees. Our net loss
for the period ending June 30, 2023 was ($2,827).
Liquidity and
Capital Resources
The accompanying financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The Company has not generated any revenues since inception and sustained an accumulated net loss of ($117,260) for the period from inception
to June 30, 2023. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern
for a reasonable period. The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate
revenues and its ability to obtain capital from third parties. No assurance can be given that the Company will be successful in these
efforts. The Company currently has no external sources of liquidity such as arrangements with credit institutions or off-balance sheet
arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access
to capital.
Our director and
officers have made no commitments, written or oral, with respect to providing a source of liquidity in the form of cash advances, loans
and/or financial guarantees.
If the Company is
unable to raise the funds partially through this offering, the Company will seek alternative financing through means such as borrowings
from institutions or private individuals. There can be no assurance that the Company will be able to keep costs from being more than
these estimated amounts or that the Company will be able to raise such funds. Even if we sell all shares offered through this Offering
Circular, we expect that the Company will seek additional financing in the future. However, the Company may not be able to obtain additional
capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason,
to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint
venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable
bankruptcy laws.
Plan of Operation
The Company has established
the following milestones for projected business:
| I. | Qualification
of its filing through to the six-month following: |
| · | Raise
approximately $18,750,000 in equity capital through the Reg A Offering. |
| · | Spend
$4,218,750 in development cost for onboarding existing oil production sources. |
| · | Generate
approximately $2,812,500 in revenue. |
| · | Incur
expenses of up to $1,406,250 on general and administrative, including but not limited to,
salaries, rent, legal and accounting, travel, etc. |
| · | Spend
$5,625,000 in researching alternative energy resources. |
| II. | Six
months to Twelve months: |
| · | Raise
an additional $37.5M in equity capital through the Reg A Offering. |
| · | Generate
approximately $5,625,000 in revenue. |
| · | Incur
expenses of up to $2,812,500 in general and administrative, including but not limited to,
salaries, rent, legal and accounting, travel, etc. |
| · | Spend
up to $8,437,500 onboarding oil and gas production. |
| · | Spend
$9,375,000 in marketing and public relations. |
| · | Spend
$11,250,000 on ongoing Research into viable alternative energy resources. |
| · | Identify
new areas of expansion. |
| III. | Twelve
to Eighteen months: |
| · | Raise
an additional $56.25M in equity capital through the Reg A Offering. |
| · | Generate
approximately $8,437,500 in revenue. |
| · | Incur
expenses of up to $4,218,750 in general and administrative, including but not limited to,
salaries, rent, legal and accounting, travel, etc. |
| · | Spend
up to $12,656,250 in onboarding exiting oil and gas production as well as proven undeveloped
reserves. |
| · | Spend
$14,062,500 on ongoing Market Research on viable alternative energy resources. |
| · | Identify
new areas of expansion. |
| IV. | Eighteen
to Twenty-Four months: |
| · | Raise
an additional $75.0M in equity capital through the Reg A Offering. |
| · | Achieve
positive cash flow for the Company. |
| · | Generate
approximately $11,250,000 in revenue. |
| · | Incur
expenses of up to $5,625,000 in general and administrative, including but not limited to,
salaries, rent, legal and accounting, travel, etc. |
| · | Spend
up to $18,750,000 marketing, attracting new customers and new suppliers. |
| · | Spend
$16,875,000 on ongoing Market Research in viable alternative energy production. |
| · | Identify
new areas of expansion. |
These are estimates
and approximations and there is no assurance the Company will be able to hit these exact numbers. There may some fluctuation due to real
estate market pressures, competition for potential properties, and the varying regulatory environment in various states.
The Company has established
a minimum annual operating budget of $10,000,000 to cover general and administrative (salaries, rent, IT, etc.), product marketing, legal
and accounting, transfer agent fees, and miscellaneous expenses. If the Company cannot raise $5,000,000 in this offering or through profits
within 12 months, it will cease to operate.
Trends and Key
Factors Affecting Our Performance
We plan to invest
significant resources to accomplish our goals, and we anticipate that our operating expenses will continue to increase for the foreseeable
future, particularly manufacturing costs, marketing costs, installation costs, distribution costs, maintenance costs, and overhead. These
investments are intended to contribute to our long-term growth; however, they may affect our short-term profitability.
The Company has established
a minimum annual operating budget of $10,000,000 to cover general and administrative (salaries, rent, IT, etc.), product marketing, legal
and accounting, transfer agent fees, and miscellaneous expenses. If the Company cannot raise $10,000,000 in this offering or through
profits within 12 months, it will cease to operate.
Off-Balance Sheet
Arrangements
We have no significant
off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes
in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are
material to our stockholders.
Inflation
The effect of inflation
on our revenues and operating results has not been significant.
Critical Accounting
Policies
Our financial statements
are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. We have identified
below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are
of critical importance and have a material impact on our financial statements. Management believes that the critical accounting policies
and estimates discussed below involve the most complex management judgments due to the sensitivity of the methods and assumptions necessary
in determining the related asset, liability, revenue and expense amounts. Specific risks associated with these critical accounting policies
are discussed throughout this MD&A, where such policies have a material effect on reported and expected financial results.
A complete listing of our significant policies is
included in the notes to our financial statements for the period ended June 30, 2023.
Use of Estimates
The preparation of
financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Estimates are based on historical experience, management expectations
for future performance, and other assumptions as appropriate. We re-evaluate estimates on an ongoing basis; therefore, actual results
may vary from those estimates.
Item 10: Directors,
Executive Officers and Significant Employees
The table below
sets forth our directors and executive officers of as of the date of this Offering Circular.
| Name
(1) |
|
Position |
|
Age |
|
Term
of Office |
|
Approximate
Hours Per Week |
| Peter Koch |
|
CEO, Chairman, Director, Compliance |
|
58 |
|
From January 13, 2021 to Present |
|
As required |
| (1) | All
addresses shall be c/o the company. |
Peter Koch,
President, CEO, Compliance Officer
Peter Koch over the past 30 year has had
comprehensive and extensive experience in security trading, public trading and public stock exchange in the US and Germany. Having been
the executive directors and owner of his own security trading bank, Koch Securities AC. He has developed a productive and successful
consulting business. Graduating from the Institute of Lucius in Echzell, Germany in 1985. Soon after completed his training as a bank
clerk with Dresdner Bank AG in Munich in 1987. After his training he began working as a broker for Walter Ludwig at the Frankfurt Stock
Exchange. He became appointed as substituting official broker on the Frankfurt stock exchange by the Hessian Ministry of Economy. Shortly
after Peter founded and was a member of the board of the association of the substituting official brokers of the Frankfurt Stock Exchange.
Also starting his own company and becoming CEO and Executive director of Peter Koch GmbH securities Trading Bank. In 1997 Peter also
joined the board of the chamber of official brokers at the Frankfurt Stock Exchange. Since than Peter has developed and operated many
AG companies including Koch Partners International. His most recent project is the development of Reostar Energy Corp.
Bring over 30 years of experience to this
business having worked with hundreds of new and existing businesses when he owned Koch Securities Trading Bank. Exceling in communication,
speaking 3 languages that include English, French and German. Also been a part of live market commentary for English radio and TV stations.
Over the years he has also been a member of several different boards in Germany. In 2014 he became the supervisory board chairman of
Hamburg a company listed on the entry standard of the Frankfurt stock exchange. Peter brings over many years of experience and knowledge.
Corporate Governance
Recent Federal legislation,
including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the
integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or The NASDAQ
Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national
securities exchanges are those that address board of directors’ independence, audit committee oversight, and the adoption of a
code of ethics. Our Board of Directors is comprised of four individuals, one of them being our executive officer and another one of them
being our financial officer with our final two as directors. Our executive officer makes decisions on all significant corporate matters
such as the approval of terms of the compensation of our officers and directors and the oversight of the accounting functions.
Although the Company
has adopted a Code of Ethics and Business Conduct the Company has not yet adopted any of these other corporate governance measures and,
since our securities are not yet listed on a national securities exchange, the Company is not required to do so. The Company has not
adopted corporate governance measures such as an audit or other independent committees of our board of directors as we presently do not
have any independent directors. If we expand our board membership in future periods to include additional independent directors, the
Company may seek to establish an audit and other committees of our board of directors. It is possible that if our Board of Directors
included independent directors and if we were to adopt some or all of these corporate governance measures, stockholders would benefit
from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been
implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of
at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officer and recommendations
for director nominees may be made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective
investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.
Conflict of Interest
Policies
Our governing instruments
do not restrict any of our directors, officers, stockholders or affiliates from having a pecuniary interest in an investment or transaction
in which we have an interest or from conducting, for their own account, business activities of the type we conduct. However, our policies
will be designed to eliminate or minimize potential conflicts of interest. A “conflict of interest” occurs when a director’s,
officer’s or employee’s private interest interferes in any way, or appears to interfere, with the interests of the Company
as a whole. Our directors plan to adopt a policy that discloses personal conflicts of interest. This policy will provide that any situation
that involves, or may reasonably be expected to involve, a conflict of interest must be disclosed immediately to our board and subsequently
to our shareholders in our next semi-annual or annual report. These policies may not be successful in eliminating the influence of conflicts
of interest. If they are not successful, decisions could be made that might fail to reflect fully the interests of all stockholders.
Item 11: Compensation
of Directors and Executive Officers
| Name
(1) |
|
Capacities
in which
Compensation
was
Received (2) |
|
|
Cash
Compensation
2022 |
|
Other
Compensation |
|
Total
Compensation |
| Peter Koch |
|
CEO, President, Director |
|
|
- |
|
- |
|
- |
Note: The Company
has not structured a future compensation plan for future employees. The Company expects to establish a compensation plan that will be
based upon new employees commensurate with their experience, skill level and work history.
Item 12: Security
Ownership of Management and Certain Beneficial Owners
The following table
sets forth information regarding beneficial ownership of our common stock as of November 29, 2004 and as adjusted to reflect the sale
of shares of our common stock offered by this Offering Circular, by:
| · | Each
of our Directors and the named Executive Officers. |
| · | All
our Directors and Executive Officers as a group; and |
| · | Each
person or group of affiliated persons known by us to be the beneficial owner of more than
10% of our outstanding shares of Common Stock |
| · | All
other shareholders as a group |
Beneficial ownership
and percentage ownership are determined in accordance with the rules of the Securities and Exchange Commission and includes voting or
investment power with respect to shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose.
Unless otherwise
indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses
sole voting and investment power over their shares of common stock, except for those jointly owned with that person’s spouse. Percentage
of beneficial ownership before the offering is based on 15,000,000 shares of common stock authorized by the Board of Directors on November
29, 2004 and is subject to issuance by the Transfer Agent. Unless otherwise noted below, the address of each person listed on the table
is c/o REOSTAR ENERGY CORP.
| |
|
Common
Shares Beneficially Owned Prior to Offering |
|
Common
Shares Beneficially Owned After the Offering |
|
|
| |
|
|
|
| Name
and Position of Beneficial Owner |
|
Number |
|
Percent |
|
Number |
|
Percent |
|
Total
Number |
Peter Koch –
CEO/Director |
|
15,000,000 |
|
100% |
|
15,000,000 |
|
42.9% |
|
35,000,000 |
| Total: |
|
15,000,000 |
|
100% |
|
15,000,000 |
|
42.9% |
|
35,000,000 |
Item 13: Interest
of Management and Others in Certain Transactions
Related Party
Transactions
The Company’s
officers and directors own the majority of the issued and outstanding controlling shares of the Company. Consequently, they control the
operations of the Company and will have the ability to control all matters submitted to stockholders for approval, including, but not
limited to:
| · | Election
of the Board of Directors |
| · | Removal
of any Directors |
| · | Amendments
to the Company’s Articles of Incorporation or bylaws. |
| · | Adoption
of measures that could delay or prevent a change in control or impede a merger, takeover
or other business combination. |
Thus, our officers
and directors will have control over the Company’s management and affairs. Accordingly, this ownership may have the effect of impeding
a merger, consolidation, takeover or other business combination, or discouraging a potential acquirer from making a tender offer for
the Common Stock.
Item 14: Securities
Being Offered
We are offering 37,500,0000
common shares. We have authorized capital stock consisting of 200,000,000 shares of common stock, $0.0001 par value per share. As of
the date of this filing, we have 88,343,919 shares of Common Stock, issued and outstanding.
Common Stock
The holders of outstanding
shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such
times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for
election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution
or winding up of our company, the assets legally available for distribution to stockholders are distributable ratably among the holders
of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.
Preferred Stock
None.
Options and Warrants
None.
Legal Matters
The validity of the
securities offered by this Offering Circular has been passed upon for us by Law Office of Mark E. Pena, Esq.
Item 15: WHERE YOU CAN FIND MORE
INFORMATION
We have filed an
offering statement on Form 1-A with the Commission under Regulation A of the Securities Act with respect to the Common Stock offered
by this Offering Circular. This Offering Circular, which constitutes a part of the offering statement, does not contain all of the information
set forth in the offering statement or the exhibits and schedules filed therewith. For further information with respect to us and our
Common Stock, please see the offering statement and the exhibits and schedules filed with the offering statement. Statements contained
in this Offering Circular regarding the contents of any contract or any other document that is filed as an exhibit to the offering statement
are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or
other document filed as an exhibit to the offering statement. The offering statement, including its exhibits and schedules, may be inspected
without charge at the public reference room maintained by the Commission, located at 100 F Street, N.E., Washington, D.C. 20549, and
copies of all or any part of the offering statement may be obtained from such offices upon the payment of the fees prescribed by the
Commission. Please call the Commission at 1-800-SEC-0330 for further information about the public reference room. The Commission also
maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that
file electronically with the Commission. The address of the site is www.sec.gov.
ReoStar
Energy Corp.
Financials
Table of Contents
To the Board of Directors
ReoStar Energy Corp.
INDEPENDENT AUDITORS’
REPORT
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Reostar Energy Corp.
Report on
the Financial Statements
We have audited
the accompanying balance sheets of Reostar Energy Corp. (the Company), which comprise the balance sheets as of December 31, 2022 and
2021, and the related statement of Operations, Changes in Stockholder’s Equity, and Cash Flows for the years then ended, and the
related notes to the financial statements.
Management’s
Responsibility for the Financial Statements
Management
is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally
accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s
Responsibility
Our
responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatements.
An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter Regarding Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note
3 to the financial statements, the Company has not generated any revenues since inception and sustained losses of $114,433. These factors,
among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty. Our opinion is not modified with respect to this matter.
Opinion
In our opinion,
the financial statements referred to above present fairly, in all material respects, the financial position of Reostar Energy Corp.,
as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis of Matters-Risks
and Uncertainties
The Company is not
able to predict the ultimate impact that COVID -19 will have on its business. However, if the current economic conditions continue, the
pandemic could have an adverse impact on the economies and
financial markets of many countries, including the geographical area in which the Company plans to operate.
Balance
Sheet Statement (Audited) |
| Reostar
Energy Corp. |
| Period
ending Dec. 31, 2022 |
| | |
| |
|
| | |
2022 | |
2021 |
| Assets | |
$ | |
$ |
| Total Cash and Bank | |
| 4,952 | | |
| (12 | ) |
| Total Other Current Assets | |
| — | | |
| — | |
| Total Assets | |
| 4,952 | | |
| (12 | ) |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Total Current Liabilities | |
| 15,385 | | |
| 15,385 | |
| Total Long-term Liabilities | |
| 24,000 | | |
| — | |
| Total Liabilities | |
| 39,385 | | |
| 15,385 | |
| | |
| | | |
| | |
| Commitment and Contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Equity | |
| | | |
| | |
| Common Stock, 100,000,000 authorized, 88,343,919
and 80,743,919 issued and outstanding at December 31, 2022 and 2021, respectively | |
| 3,686 | | |
| 1,463 | |
| Common stock to be issued | |
| 300 | | |
| 3 | |
| Additional paid in capital | |
| 76,014 | | |
| 16,864 | |
| Total Retained Earnings (Deficit) | |
| (114,433 | ) | |
| (33,727 | ) |
| Total Equity | |
| (34,433 | ) | |
| (15,397 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholder's
Equity | |
| 4,952 | | |
| (12 | ) |
The Accompanying
Notes Are an Integral Part of these Financial Statements.
Income Statement
(Audited) |
| Reostar
Energy Corp. |
| Period
ending Dec. 31, 2022 |
| | |
2022 | |
2021 |
| | |
$ | |
$ |
| Total Income | |
- | |
- |
| | |
| |
|
| Total Cost of Goods Sold | |
- | |
- |
| | |
| |
|
| Gross Profit | |
- | |
- |
| | |
| |
|
| Operating Expenses | |
| | | |
| | |
| Professional Fees | |
| 73,958 | | |
| 32,138 | |
| License and Fees | |
| 1,883 | | |
| 800 | |
| Travel Expense | |
| 1,792 | | |
| 619 | |
| Accounting Fees | |
| 1,500 | | |
| | |
| Advertising & Promotion | |
| 784 | | |
| | |
| Other Expense | |
| 475 | | |
| | |
| Bank Service Charges | |
| 254 | | |
| 163 | |
| Miscellaneous Expense | |
| 50 | | |
| | |
| Meals and Entertainment | |
| 10 | | |
| 6 | |
| Total Operating Expenses | |
| 80,706 | | |
| 33,727 | |
| | |
| | | |
| | |
| Net Income
(Loss) | |
| (80,706 | ) | |
| (33,727 | ) |
| | |
| | | |
| | |
| Average Shares Outstanding | |
| 88,343,919 | | |
| 80,743,919 | |
| | |
| | | |
| | |
| Net Loss Per Common Share | |
| (0.00 | ) | |
| (0.00 | ) |
| | |
| | | |
| | |
The Accompanying
Notes Are an Integral Part of these Financial Statements.
Cash Flow
Statement (Audited) |
| Reostar
Energy Corp. |
| Period
ending Dec. 31, 2022 |
| | |
2022 | |
2021 |
| Operating Activities | |
| $ | | |
| $ | |
| Net Loss for the period | |
| (80,706 | ) | |
| (33,727 | ) |
| Stock based compensation (non-cash) | |
| 61,670 | | |
| — | |
| Net cash from operating activities | |
| (19,036 | ) | |
| (33,727 | ) |
| | |
| | | |
| | |
| Financing Activities | |
| | | |
| | |
| Shareholder Loan | |
| — | | |
| 33,715 | |
| Proceeds from Note Payable | |
| 24,000 | | |
| — | |
| Net Cash from Financing Activities | |
| 24,000 | | |
| 33,715 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| OVERVIEW | |
| | | |
| | |
| Starting Balance | |
| -11.59 | | |
| | |
| Gross Cash Inflow | |
| 24,000 | | |
| 33,715 | |
| Gross Cash Outflow | |
| (19,036 | ) | |
| (33,727 | ) |
| Net Cash Change | |
| 4,964 | | |
| (12 | ) |
| Ending Balance | |
| 4,952 | | |
| (12 | ) |
The Accompanying
Notes Are an Integral Part of these Financial Statements.
ReoStar Energy
Corp. (Audited)
Statements of
Equity Roll Forward
Period ending
December 31, 2022
| |
|
Common
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Shares |
|
|
|
Amount |
|
|
|
Additional
Paid-in-capital |
|
|
|
Common
stock to be issued |
|
|
|
Retained
Earnings |
|
|
|
Total
Stockholders' Equity |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
| Restricted
shares |
|
|
66,113,924 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
| Non-restricted shares |
|
|
14,629,995 |
|
|
|
1,463 |
|
|
|
16,864 |
|
|
|
3 |
|
|
|
|
|
|
|
18,330 |
|
| Net
Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
(33,727 |
) |
|
|
(33,727 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders'
Equity Dec. 31, 2021 |
|
|
80,743,919 |
|
|
|
1,463 |
|
|
|
16,864 |
|
|
|
3 |
|
|
|
(33,727 |
) |
|
|
(15,397 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restricted shares |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
| Non-restricted shares |
|
|
7,600,000 |
|
|
|
760 |
|
|
|
59,150 |
|
|
|
297 |
|
|
|
|
|
|
|
61,670 |
|
| Net
Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
(80,706 |
) |
|
|
(80,706 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders'
Equity Dec. 31, 2022 |
|
|
88,343,919 |
|
|
|
3,686 |
|
|
|
76,014 |
|
|
|
300 |
|
|
|
(114,433 |
) |
|
|
(34,433 |
) |
The Accompanying
Notes Are an Integral Part of these Financial Statements.
ReoStar Energy
Corp.
NOTES TO AUDITED
FINANCIAL STATEMENTS
For the years ended
December 31, 2022
NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS
ReoStar Energy Corp. (the “Company”)
was incorporated in the State of Nevada on November 29, 2004. The Company is in the development stage whose purpose is to provide an
international online e-commerce platform specializing in unique exclusive products from the Asian market sector.
NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Development
Stage Company
The Company is considered
to be in the development stage as defined in ASC 915 “Development Stage Entities.” The Company is devoting substantially
all of its efforts to the development of its business plans. The Company has elected to adopt early application of Accounting Standards
Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements; and does not present
or disclose inception-to-date information and other remaining disclosure requirements of Topic 915.
Use of estimates
The preparation of
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Start-Up Costs
In accordance with
ASC 720, “Start-up Costs”, the Company expenses all costs incurred in connection with the start-up and organization
of the Company.
Cash
Cash includes cash
in bank only.
Revenue Recognition
In
May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification
(“ASC”) Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers (“ASC 340-40”), (collectively,
“Topic 606”). On November 30, 2020, the Company adopted Topic 606. ASU 2014-09 requires entities to recognize revenue through
the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination
of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity
satisfies the performance obligations. The Company implemented ASU 2014-09 for the annual reporting period as of November 30, 2021, which
resulted in no changes to our financial statements as there is no revenue reported in the year presented.
Earnings Per Share
In
accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” Basic earnings
(loss) per share (“EPS”) is computed by dividing net profit/loss available to common stockholders by the weighted average
number of common shares outstanding during the period, excluding the effects of any potentially dilutive
securities. The number of common shares that are exercisable or converted into common stock is not material to effect diluted
EPS results.
Further, since the Company showed a loss for the period presented, basic and diluted loss per share is the same for the period.
Income Taxes
The Company accounts
for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset
and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more
likely than not to be realized. As of November 30, 2021, the Company did not have any amounts recorded pertaining to uncertain tax positions.
Fair Value Measurements
The Company adopted
the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous
accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair
value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these instruments.
ASC 820 defines fair
value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820
also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted
prices in active markets for identical assets or liabilities.
Level 2 — quoted
prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3 — inputs
that are unobservable (for example cash flow modeling inputs based on assumptions).
The Company has no
assets or liabilities valued at fair value on a recurring basis.
Year End
Through a Board Resolution
on December 20th, 2021, the company changed its year end to December 31st for accounting purposes.
NOTE 3 - GOING
CONCERN
The accompanying
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has not generated any revenues since inception and
sustained an accumulated
net loss of $(64,433) for the period from inception to December 31, 2022. These factors, among others, raise
substantial doubt
about the ability of the Company to continue as a going concern for a reasonable period. The Company’s continuation
as a going concern is dependent upon, among other things, its ability to generate revenues and its ability to obtain capital from
third parties. No
assurance can be given that the Company will be successful in these efforts. Management plans to raise significant capital through investors
to capitalize its business plan.
The financial statements
do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 – LONG-TERM LIABILITIES
On September 27, 2022, the Company entered
into a note payable agreement with a third party. As part of the agreement, the purchaser acquired 1,200,000 shares of stock at $0.20
per share, in exchange for a note payable of $24,000. The note payable is non-interest bearing and has no set due date.
NOTE 5 - INCOME TAXES
The reconciliation
of income tax benefit at the U.S. statutory rate of 21% for the period ended December 31, 2022 to the Company’s effective tax rate
is as follows:
| Income
tax benefit at statutory rate |
|
$ |
16,948 |
|
| Change
in valuation allowance |
|
|
(16,948 |
) |
| Income
tax benefit per books |
|
$ |
0 |
|
The tax effects of temporary differences
that give rise to the Company’s net deferred tax assets for the period ended December 31, 2022 are as follows:
| Net
Operating Loss |
|
$ |
(114,433 |
) |
| Valuation
Allowance |
|
|
114,433 |
|
| Net
deferred tax asset |
|
$ |
0 |
|
The Company has approximately $(114,433)
of net operating losses (“NOL”) carried forward to offset taxable income, if any, in future years which expire commencing
in fiscal 2037. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on
the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every
period because it is more likely than not that all of the deferred tax asset will not be realized.
NOTE 6 –
COMMITMENT AND CONTINGENCIES
The Company currently
uses an office address and mail receipt with Cross Campus-Pasadena office space in Pasadena, California.
NOTE 7 – STOCKHOLDERS’
EQUITY
Authorized Stock
The Company has authorized
100,000,000 common shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.
The Company has no
authorized preferred shares at this time but may deem it advisable to authorize one or more class(es) of Preferred Stock.
During the year ended December 31, 2022,
the Company issued 7,600,000 shares in exchange for services valued at $61,670.
NOTE 8 –
SUBSEQUENT EVENTS
The Company filed
a Form 1-A (File No. 024-11409) that was Qualified by the SEC on 04/02/2021. The Company has begun the process of raising capital under
the Form 1-A.
The Company has evaluated
subsequent events through the date these financials were made available for issuance and concluded that no other subsequent events have
occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.
Balance
Sheet (Unaudited) |
| Reostar
Energy Corp. |
| Six
months ended June 30, 2023 |
| | |
|
| | |
2023 |
| Assets | |
$ |
| Total Cash and Bank | |
| 2,575 | |
| Total Other Current Assets | |
| — | |
| Total Assets | |
| 2,575 | |
| | |
| | |
| Liabilities | |
| | |
| Total Current Liabilities | |
| 15,835 | |
| Total Long-term Liabilities | |
| 24,000 | |
| Total Liabilities | |
| 39,835 | |
| | |
| | |
| Commitment and Contingencies | |
| | |
| | |
| | |
| Equity | |
| | |
| Common Stock | |
| 3,686 | |
| Common stock to be issued | |
| 300 | |
| Additional paid in capital | |
| 76,014 | |
| Total Retained Earnings (Deficit) | |
| (117,260 | ) |
| Total Equity | |
| (37,260 | ) |
| | |
| | |
| Total Liabilities and Stockholder's
Equity | |
| 2,575 | |
| Income
Statement (Unaudited) |
| Reostar
Energy Corp. |
| Six
months ended June 30, 2023 |
| | |
|
| | |
2023 |
| | |
$ |
| Total Income | |
- |
| | |
|
| Total Cost of Goods Sold | |
- |
| | |
|
| Gross Profit | |
- |
| | |
|
| Operating Expenses | |
| | |
| Professional Fees | |
| 1,779 | |
| License and Fees | |
| 300 | |
| Travel Expense | |
| 600 | |
| Accounting Fees | |
| — | |
| Advertising & Promotion | |
| — | |
| Other Expense | |
| — | |
| Bank Service Charges | |
| 76 | |
| Miscellaneous Expense | |
| 72 | |
| Meals and Entertainment | |
| — | |
| Total Operating Expenses | |
| 2,827 | |
| | |
| | |
| Net Income
(Loss) | |
| (2,827 | ) |
| | |
| | |
| Average Shares Outstanding | |
| 88,343,919 | |
| | |
| | |
| Net Loss Per Common Share | |
| (0.00 | ) |
| Cash
Flow Statement (Unaudited) |
| Reostar
Energy Corp. |
| Six
months ended June 30, 2023 |
| | |
|
| Operating Activities | |
$ |
| Net Loss for the period | |
| (2,827 | ) |
| Prepaid Expense | |
| — | |
| Net cash from operating activities | |
| (2,827 | ) |
| | |
| | |
| Financing Activities | |
| | |
| Shareholder Loan | |
| 450 | |
| Proceeds from Note Payable | |
| — | |
| Net Cash from Financing Activities | |
| 450 | |
| | |
| | |
| | |
| | |
| OVERVIEW | |
| | |
| Starting Balance | |
| 4952 | |
| Gross Cash Inflow | |
| 450 | |
| Gross Cash Outflow | |
| (2,827 | ) |
| Net Cash Change | |
| (2,377 | ) |
| Ending Balance | |
| 2,575 | |
| Statement
of Stockholders' Equity (Unaudited) |
| Reostar
Energy Corp. |
| Six
months ended June 30, 2023 |
| | |
| Common
Stock | | |
| | | |
| | | |
| | | |
| | |
| | |
| Shares | | |
| Amount | | |
| Additional
Paid-in-capital | | |
| Common
stock to be issued | | |
| Retained
Earnings | | |
| Total
Stockholders' Equity | |
| | |
| | | |
| | | |
| | | |
| | | |
| — | | |
| — | |
| Restricted shares | |
| 66,113,924 | | |
| — | | |
| — | | |
| | | |
| — | | |
| — | |
| Non-restricted shares | |
| 22,229,995 | | |
| 2,223 | | |
| 77,477 | | |
| 300 | | |
| | | |
| 80,000 | |
| Net Income | |
| — | | |
| — | | |
| — | | |
| | | |
| (117,260 | ) | |
| (117,260 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Stockholders' Equity Dec.
31, 2021 | |
| 88,343,919 | | |
| 2,223 | | |
| 77,477 | | |
| 300 | | |
| (117,260 | ) | |
| (37,260 | ) |
ReoStar
Energy Corp.
NOTES TO UNAUTIDTED
FINANCIAL STATEMENTS
For Six
months ended June 30, 2023(Unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION
OF BUSINESS
Reostar Energy Corporation, formerly known
as Gold range Resources Inc. (the “Company”) was incorporated in the State of Nevada on November 29, 2004. The Company operated
as Gold range Resources The company is an operating company whose purpose is to aggregate existing US based oil and gas production, develop
proven undeveloped oil and gas reserves, and incorporate alternative clean energy sources. the US. The Company filed for bankruptcy on
11/01/2010 under Chapter 11 with the United States Bankruptcy Court, Northwest District of Texas, Fort Worth Division, under Caso No.
10-47176-MXM. The case was converted to a Chapter 7 filing on 04/15/2013. The case was open for 74 months. The Bankruptcy was discharged
on 06/26/2019 leaving the Company at the time of discharge with no assets and no liabilities.
NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The preparation of
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Start-Up Costs
In accordance with
ASC 720, “Start-up Costs”, the Company expenses all costs incurred in connection with the start-up and organization
of the Company.
Cash
Cash includes cash
in bank only.
Revenue Recognition
In
May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification
(“ASC”) Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers (“ASC 340-40”), (collectively,
“Topic 606”). On June 30, 2023, the Company adopted Topic 606. ASU 2014-09 requires entities to recognize revenue through
the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination
of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity
satisfies the performance obligations. The Company implemented ASU 2014-09 for the reporting period as of June 30, 2023, which resulted
in no changes to our financial statements as there is no revenue reported in the year presented.
Earnings Per Share
In
accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” Basic earnings
(loss) per share (“EPS”) is computed by dividing net profit/loss available to common stockholders by the weighted average
number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. The
number of common shares that are exercisable or converted into common stock is not material to effect diluted EPS results.
Further, since
the Company showed a loss for the period presented, basic and diluted loss per share is the same for the period.
Income Taxes
The Company accounts
for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset
and liability method provide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more
likely than not to be realized. As of June 30, 2023, the Company did not have any amounts recorded pertaining to uncertain tax positions.
Fair Value Measurements
The Company adopted
the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous
accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The estimated fair
value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these instruments.
ASC 820 defines fair
value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820
also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 — quoted
prices in active markets for identical assets or liabilities.
Level 2 — quoted
prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3 — inputs
that are unobservable (for example cash flow modeling inputs based on assumptions).
The Company has no
assets or liabilities valued at fair value on a recurring basis.
Year End
The Company operates
under a calendar year for accounting purposes.
Accounting
for Bankruptcy
The
Company bankruptcy filing, as discussed in Note 1, was in progress and not yet finalized prior to January 1, 2019. However, the bankruptcy
court proceedings had identified that there was limited value in the assets held by the company with write-downs of assets and liabilities
being recorded during the years leading up to January 1, 2019 as part of the court findings. Based on this, the total loss on bankruptcy
for the year ended December 31, 2019 was limited to the asset value on hand, or $55,755, as of June 26, 2019, or when the bankruptcy
proceedings were discharged.
NOTE 3 - GOING
CONCERN
The accompanying
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has not generated any revenues since inception and sustained an accumulated
net loss of $(117,260) for the period from inception to June 30th, 2023.
These factors, among
others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period. The
Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its ability
to obtain capital from third parties. No assurance can be given that the Company will be successful in these efforts.
Management plans
to raise significant capital through investors to capitalize its business plan.
The financial statements
do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4 - INCOME TAXES
The reconciliation
of income tax benefit at the U.S. statutory rate of 21% for the period ended June 30, 2023, to the Company’s effective tax rate
is as follows:
| Income tax benefit at statutory rate | |
$ | 594 | |
| Change in valuation allowance | |
| (594 | ) |
| Income tax benefit per
books | |
$ | 0 | |
The tax effects of temporary differences
that give rise to the Company’s net deferred tax assets for the period ended June 30, 2023, are as follows:
| Net Operating Loss | |
$ | (117,260 | ) |
| Valuation Allowance | |
| 117,260 | |
| Net deferred tax asset | |
$ | 0 | |
The Company has approximately
($117,260) of net operating losses (“NOL”) carried forward to offset taxable income, if any, in future years which expire
commencing in fiscal 2037. In assessing the realization of deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon
the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers
the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs
for every period because it is more likely than not that all of the deferred tax asset will not be realized.
NOTE 5 –
LIABILITIES
The company entered
into a convertible note of $24,000 to fund operations for the period. Also, proper adjustment was made during the year to account for
Shareholder loan that was previously classed as Equity.
NOTE 6 –
COMMITMENT AND CONTINGENCIES
The Company currently
uses an office address and mail receipt at Cross Camps-Pasadena office space in Pasadena, California.
NOTE 7 –
STOCKHOLDER’S EQUITY
Authorized Stock
The Company has authorized
200,000,000 common shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy,
on any matter on which action of the stockholders of the corporation is sought.
The Company has no
authorized preferred shares at this time but may deem it advisable to authorize one or more class(es) of Preferred Stock.
The company has adjusted
its offered shares to 37,500,000 with a unit price of $2.00 to raise a total of $75,000,000 after 100% of the offered shares has been
consummated.
NOTE 8 –
SUBSEQUENT EVENTS
As reported in Form
1-U filed on EDGAR and accepted January 31, 2023 the following actions took place:
1. By Shareholder Resolution of the majority shareholders, it is hereby approved the dismissal of Michael Latjay – CEO, Larry Myers
/ COO, Alex Johnson – Secretary/Treasurer/Director and Jemila Yates – Director effective as if today January 31, 2023.
2. By Shareholder
Resolution of the majority shareholders, it hereby approves the appointment of Peter H. Koch as CEO/President/ Director effective immediately
on January 31, 2023.
PART III –
EXHIBITS
Index to Exhibits
_______
* Filed
herewith.
SIGNATURES
Pursuant to the requirements
of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form
1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Pasadena, State of California, on October 10, 2021.
| |
REOSTAR ENERGY CORP. |
|
| |
|
|
|
| |
By: |
/s/ Peter Koch |
|
| |
Name: |
Peter Koch |
|
| |
Title: |
Chief Executive Officer |
|
| |
|
|
|
| This offering statement has been signed by the following persons in the capacities and on the dates indicated. |
|
| Name |
|
Title |
|
Date |
| /s/ Peter Koch |
|
Chief Executive Officer, Director, Principal Executive Officer, Principal Financial Officer |
|
October 10, 2023 |
_________________________________________________________________________________________________________
SUBSCRIPTION AGREEMENT
ReoStar Energy Corp.
A Nevada Corporation.
_________________________________________________________________________________________________________
The undersigned (sometimes
referred to herein as (“Subscriber”) hereby subscribes to purchase the number of shares of Common Stock (the “Shares”)
of ReoStar Energy Corp. a Nevada Corporation (the “Company”) indicated below. The undersigned understands that,
if accepted, its subscription is irrevocable, but that it may be rejected in the sole discretion of the Company, for any reason.
In consideration
for the acceptance by the Company of this Subscription Agreement, the Subscriber hereby agrees, represents and warrants as follows:
1. Acceptance
or Rejection of Subscription. The Company shall have the right to accept or reject this subscription in whole or in part. If
rejected, the Subscriber's check and Subscription Documents (as defined below) shall be promptly returned to the Subscriber. If
accepted, the Subscriber's check will be forwarded directly to the Company, and the Subscriber's Investor Questionnaire and Subscription
Agreement (collectively referred to herein as the "Subscription Documents") will be retained by the Company.
2. Closing. If
the Company has not received and accepted subscriptions and the closing date of _____________________ is not extended in the sole discretion
of the Company for up to an additional ninety (90) days from the "Closing Date", the Offering will terminate and any unaccepted
investments in the possession of the Company and Subscription Documents shall be promptly returned to the Subscriber.
3. Agreement
to Indemnify. The Subscriber hereby agrees to indemnify and hold harmless the Company and all of its directors, officers,
agents and employees from any and all damages, losses, costs and expenses (including reasonable attorneys' fees) which they may incur
(I) by reason of the Subscriber's failure to fulfill any of the terms and conditions of this Agreement, (ii) by reason of the Subscriber's
breach of any of the Subscriber's representations, warranties or agreements contained herein or in the Investor Questionnaire, and (iii)
with respect to any and all claims made by or involving any person, other than the Subscriber, claiming any interest, right, title, power
or authority regarding the Subscriber's purchase of Shares. The Subscriber further agrees and acknowledges that this indemnification
agreement shall survive any sale or transfer, or attempted sale or transfer, of any portion of the Subscriber's Shares or upon the Subscriber's
death.
4. Representations,
Warranties and Covenants. The Subscriber hereby represents, warrants, and covenants that:
(i) Subscriber
acknowledges that the Shares have not been registered under the Securities Act with the Securities and Exchange Commission, nor have
the Shares been registered or qualified for sale under the laws of any other jurisdiction (either within or outside of the United States).
(ii) Subscriber
is acquiring the Shares for Subscriber’s own account and not for the account of others and for investment purposes only.
(iii) All
subsequent offers and sales of the Shares by Subscriber shall be made in compliance with the Securities Act, pursuant to registration
under the Securities Act or pursuant to an exemption from such registration.
(iv) Subscriber
understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of
U.S. federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties,
agreements acknowledgments and understandings of Subscriber set forth in the Subscription Agreement and Investor Questionnaire in order
to determine the applicability of such exemptions and the suitability of Subscriber to acquire the Shares.
(v) Subscriber
has adequate net worth and means of providing for his current needs and personal contingencies to sustain a complete loss of his investment
in the Shares and has no need for liquidity in this investment.
(vi) The
Company has made available to Subscriber, its counsel and advisors, if any, the opportunity to ask questions of, and receive answers
from the Company and its representatives, concerning the terms and conditions of an investment in the Shares, and has given it access
to any requested information, documents, financial statements, books and records relative to the Company and an investment in the Shares.
(vii) If
the Subscriber is a corporation, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and if the Subscriber is a partnership or other organization, it is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.
(viii) (a)
If the Subscriber is a corporation, the execution, delivery and performance of this Agreement have been duly authorized by all necessary
corporate action, (b) if the Subscriber is a partnership or other organization, the other governing documents to enter into this Agreement
and to consummate the transactions contemplated hereby and all necessary consents and approvals required by the partnership agreement
or other governing documents have been obtained, and (c) for both corporations and partnerships, this Agreement constitutes a legal,
valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors'
rights generally.
(ix) Subscriber
is aware that investing in the Shares is speculative and involves a high degree of risk and that any right to transfer its Shares in
the Company is limited and restricted by law, and this Subscription Agreement.
(x) Subscriber
has evaluated the risks of investing in the Shares and has substantial experience in making investment decisions of this type or is relying
on his advisors or Purchase Representative, if applicable, in making this investment decision.
The foregoing representations,
warranties, and covenants and all other information which the Subscriber has provided to the Company concerning the Subscriber and the
Subscriber's financial condition (or concerning the entity or organization which the subscriber represents and its financial condition)
are true and accurate as of the date hereof.
5. Subscription
Agreement Binding on Heirs, Etc. This Subscription Agreement shall be binding upon the Subscriber's heirs, successor’s
estate, legal representatives, and assigns, and shall be construed in accordance with the laws of the State of Nevada.
6. Execution
Authorized. If this Subscription Agreement and the other relevant Subscription Documents are executed on behalf of a corporation,
partnership, trust or other entity, the Subscriber has been duly authorized and empowered legally to represent such entity and to execute
this Subscription Agreement and such Subscription Documents and all other instruments in connection with the purchase of the Shares,
and the Subscriber's signature is binding upon such entity.
7. Legal
Representation/Conflict of Interest. The Subscriber, by executing this Subscription Agreement acknowledges, represents
and agrees that (a) the Company has retained legal counsel to represent it in connection with the preparation of this Subscription Agreement.
(b) such legal counsel has prepared such documents with a view to the interests of the Company only and has not undertaken to represent
the interest of the Subscriber and that no attorney-client relationship or fiduciary duty exists between such legal counsel and the Subscriber,
notwithstanding that the Subscriber's investment may pay, directly or indirectly, for such legal services; (c) the Subscriber has been
advised to have such legal documents reviewed by the Subscriber's own independent attorney and/or other advisors; and (d) the services
performed by such legal counsel have been limited to the preparation of such documentation at the request and direction of the Company
and such legal counsel has not undertaken to conduct any investigation whatsoever concerning the facts, risks or circumstances concerning
or relating to the investment and/or the background or financial qualifications of the Company.
9. Definition
of Terms. The terms used herein, if not otherwise defined herein, shall have the meanings attributed to such terms in
the Agreement. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons herein may require.
10. Number
of Shares. The undersigned hereby subscribes for Shares as follows: ____________@ $2.00 per share.
My check payable
to “” in the amount of $_________________ is enclosed.
11. Taxpayer
Identification Number Certification.
| |
|
|
| Social Security or Tax I.D. No. |
|
Social Security or Tax I.D. No. |
12. Mailing Address: 87 N. Raymond
Ave, Suite 200, Pasadena, CA 91103
TYPE OF OWNERSHIP (Check one)
[ ] INDIVIDUAL
OWNERSHIP
(One signature required) |
|
[ ] COMMUNITY
PROPERTY
(one signature required if interest
held in one name, i.e., managing spouse; two signatures required if interest held in both names) |
[ ] JOINT TENANTS WITH RIGHT OF
SURVIVORSHIP
(both or all parties must sign)
|
|
[ ] CORPORATION OR LIMITED LIABLITY
COMPANY (LLC) |
[ ] PARTNERSHIP
(Please include a copy of the Statement
of Partnership Agreement authorizing signature) |
|
[ ] TRUST
(Please include a copy of the
Trust Agreement) |
The undersigned has executed this Subscription
Agreement this _________day of ______.
________________________________________ _________________________________________
Subscriber #1 Signature Subscriber
#2 Signature
_________________________________ _________________________________________
Subscriber #1 Print/Type Name and Title Subscriber
#2 Print/Type Name and Title
Telephone: ______________________________ Telephone
_________________________________
Email address _________________________ Email
address ______________________________
_________________________________________ __________________________________________
Street Address Street Address
_________________________________________ __________________________________________
City/St/Zip City/St/Zip
SUBSCRIPTION
ACCEPTED:
ReoStar
Energy Corporation.
By: ___________________________________
Peter H. Koch
CEO/Director
Dated: _______________
The Law Office
of Mark E. Pena, P.A.
Member of the Florida
Bar 4230 So. MacDill Ave. Member Federal Middle District of Florida
Suite I
Tel. (813) 251-1289
Tampa, FL 33611 Fax (813) 831-1143
_______________________________________________________________________
September
29, 2023
ReoStar
Energy Corp.
87
North Raymond
Suite
200
Pasadena
CA 91103
RE: Amended
Opinion Letter for ReoStar Energy Corp. (the Company) Offering Statement on Form 1-A (the “Offering Statement”)
Post Qualification Amendment.
Ladies
and Gentlemen:
As
you are aware, my firm has acted as special counsel to the Company, a corporation incorporated under the laws of the State of Nevada,
in connection with the filing of the Offering Statement under Regulation A of the Securities Act of 1933 as amended (the Securities
Act”), with the Securities & Exchange Commission (the SEC) regarding the Company’s proposed offering (the “Offering”).
I executed the original Form 1-A opinion. I have now been asked to opine on the company’s recent Post Qualification Amendment with
its new terms.
The
company has made two changes to the original Offering. The Offering will now be for a total of (37,500,000 shares (the “shares”)
of common stock, $.0001 par value of the Company at an amended price of $2.00 per share.
This
opinion letter is being delivered in accordance with the requirements of Item 17(12) of Form 1-A of the Securities Act. In rendering
this opinion, I have re-reviewed the following documents in either certified form or copies provided to me by the Company.
1. Original
Corporate Charter re-domiciling into the State of Nevada, dated November 29, 2004, filed with the Secretary of State of the State of
Nevada, stating that the Company had 50,000,000 shares authorized at 0.001 par value. According to its Annual Report filed on September
29, 2023 with the OTC Markets LLC trading platform, the Company now has 200,000,000 shares Authorized.
2. By-laws
of the Company dated April 30, 2007, giving authority for this issuance and filing to the Board of Directors of the Company.
3. Resolution
of the Board of Directors of the Company authorizing this share issuance and regulatory filing dated August 22, 2021 and that changed
the par value of the Company’s common stock from $.001 to $.0001.
4. Financial
Audit Opinion, prepared by Greis & Associates of Denver, CO. dated September 28, 2021 which states that in the auditor’s opinion,
the financial statements offered by the Company for 2019 and the period ending December 31, 2021, fairly and accurately describe he financial
condition and operations and cash flow of the company under GAAP standards.
I
have also examined the Nevada Secretary of State’s Business Entity website that establishes that the Company is active. I have
also examined the Company’s current shareholder issuance records from the transfer agent to confirm that there are sufficient number
of shares available to satisfy the proposed issuance in the filing. I have also examined additional documents I have deemed relevant
and necessary in order to issue the opinion hereafter set forth. Nevada State corporate law does not require a shareholder vote for the
issuance of the proposed shares relevant to the subject 1-A filing, and the corporation’s charter designates the power to issue
stock to the Board of Directors.
I
have assumed: 1) the genuineness of all signatures, 2) the legal capacity of all natural persons, 3) the authenticity of all documents
submitted to me as originals, 4) that all conformed or other copies conform to the original documents and that 5) all the records and
other information made available to me by the Company on which I have relied are complete in all material respects. As to questions of
fact material to this opinion, I have relied solely upon the above-referenced certificates and other documents and have not performed
any independent investigation od same other than the review of the Nevada Secretary of State’s Corporation’s website. For
purposes of this opinion letter, I assume that all of the certificates and documents from officials dated prior to this date remain accurate
as of the date of this letter. I am also making the assumption that the Offering statement will be declared qualified.
I
also must qualify that the enforcement of any agreements entered into by the Company relevant herein, may be limited or subject to applicable
bankruptcy, insolvency or reorganization laws in the future that are not present now.
Based
upon the foregoing, I am of the opinion that the issuance of the Shares has been duly authorized and upon issuance, the Reg A Shares
will be validly issued fully paid
for and nonassessable. Purchasers and holders will not be obligated for any further payments beyond the purchase price.
The
opinions I express here are limited to the facts and matters specifically set forth herein and I offer no further opinion and none should
be inferred beyond those expressly stated herein. I will not be advising you of any subsequent changes in the facts stated or assumed
herein or any changes in any applicable law relevant to this Reg A Offering or Nevada state law related to the issuance and sale of the
Shares.
This
opinion letter is limited to the corporate laws of the state of Nevada. I offer no opinion regarding the laws of any other state or jurisdiction.
I specifically exclude any opinions regarding federal or state securities laws, including Nevada related to the issuance and sale of
the Shares.
You
are free to rely and use this opinion letter as needed and I consent to it being included as Exhibit 5 of the Offering as required under
the caption “Legal Matters”. Notwithstanding this consent, I do not admit that I am in the category of persons whose consent
is required under Section 7 of the Securities Act or the rules and regulations of the SEC.
Very
Truly Yours,
Mark
E. Pena, Esquire
Mark
E. Pena, Esq.
Attorney
at Law
Attachments
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