Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------
FORM 10Q
-----------------
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2012
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from __________ to ___________
Commission file number: 000-54306
RANGEFORD RESOURCES, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Nevada 77-1176182
------ ----------
(State of Incorporation) (IRS Employer ID Number)
8541 North Country Road 11, Wellington, CO 80549
------------------------------------------------
(Address of principal executive offices)
970-218-7080
------------
(Registrant's Telephone number)
(Former Address and phone of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to the filing requirements for
the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 for Regulation S-T (ss.232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No []
Indicate by check mark whether the registrant is a large accelerated file, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ]
Smaller reporting company [X] (Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of share outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of November 14, 2012, there were 10,459,806 shares of the registrant's common
stock issued and outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) Page
----
Balance Sheets - September 30, 2012 and March 31, 2012 1
Statements of Operations -
Three and Six months ended September 30, 2012 and 2011 and the
period from December 4, 2007 (Inception) to September 30,
2012 2 - 3
Statements of Cash Flows -
Six months ended September 30, 2012 and 2011 and
From December 4, 2007 (Inception) through September 30, 2012 4
Notes to the Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- Not Applicable 13
Item 4. Controls and Procedures 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 1A. Risk Factors - Not Applicable 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
-Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable 15
Item 4. Mine Safety Disclosure - Not Applicable 15
Item 5. Other Information - Not Applicable 15
Item 6. Exhibits 15
SIGNATURES 16
PART I
ITEM 1. FINANCIAL STATEMENTS
RANGEFORD RESOURCES, INC.
BALANCE SHEETS
September 30, March 31,
2012 2012
--------------- ---------------
(Unaudited)
ASSETS
Current assets:
Cash $ 1,621 $ 200
Other current asset 1,200 -
--------------- ---------------
Total current assets 2,821 200
--------------- ---------------
Total assets $ 2,821 $ 200
=============== ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 53,549 $ 3,350
Accrued interest payable - 160
Related party payables - 21,055
--------------- ---------------
Total current liabilities 53,549 24,565
Stockholders' Deficit
Common stock, $.001 par value; 75,000,000 shares authorized,
10,081,700 shares issued and outstanding at September 30, 2012
and March 31, 2012, respectively 10,082 10,082
Additional paid-in capital 65,466 30,131
Deficit accumulated during the development stage (126,276) (64,578)
--------------- ---------------
Total stockholders' deficit (50,728) (24,365)
--------------- ---------------
Total liabilities and stockholders' deficit $ (2,821) $9,200
=============== ===============
See accompanying notes to the unaudited financial statements.
1
RANGEFORD RESOURCES, INC.
(A Development Stage Company)
Unaudited Statements of Operations
Three Months Ended September 30, Three Months Ended September 30,
2012 2011 2012 2011
---------------- ------------------------ ------------------ --------------
(Restated) (Restated)
Revenue $ - $ - $ - $ -
Operational expenses
Advertising and promotion 17,104 - 17,104 -
Professional Fees 40,353 1,500 42,023 4,385
General and administrative 2,526 45 2,571 90
---------------- ------------------------ ------------------ --------------
Total operational expenses 59,983 1,545 61,698 4,475
Loss from operations (59,983) (1,545) (61,698) (4,475)
---------------- ------------------------ ------------------ --------------
Other expense
Interest expense - - - -
---------------- ------------------------ ------------------ --------------
Total other expense - - - -
---------------- ------------------------ ------------------ --------------
Provisions for income taxes - - - -
Net loss $ (59,983) $ (1,545) $ (61,698) $ (4,475)
================ ======================== ================== ==============
Per share information
Basic and diluted $(0.00) $(0.00) $(0.00) $(0.00)
================ ======================== ================== ==============
Weighted average shares outstanding 10,081,700 10,281,700 10,081,700 10,140,020
================ ======================== ================== ==============
See accompanying notes to the unaudited financial statements.
2
RANGEFORD RESOURCES, INC.
(A Development Stage Company)
Unaudited Statements of Operations
(continued)
For the period from
December 4, 2007
(inception) to
September 30, 2012
------------------------
Revenue $ -
Operational expenses
Advertising and promotion 17,104
Professional Fees 103,943
General and administrative 5,069
------------------------
Total operational expenses 126,116
Loss from operations (126,116)
------------------------
Other expense
Interest expense 160
------------------------
Total other expense 160
------------------------
Provisions for income taxes -
Net loss $ (126,276)
========================
Per share information
Basic and diluted
Weighted average shares outstanding
See accompanying notes to the unaudited financial statements.
3
RANGEFORD RESOURCES, INC.
(A Development Stage Company)
Unaudited Statements of Cash Flows
For the period from
Six months ended December 4, 2007
September 30, (inception) to
2012 2011 September 30, 2012
-----------------------------------------------------------------
Cash flows from operating activities (restated)
Net loss $ (61,698) $ (4,475) $ (126,276)
Adjustments to reconcile net loss to net cash
used in operating activities
Common stock issued for services (11,620) - 24,820
Changes in operating assets and liabilities:
Other current asset (1,200) - (1,200)
Accounts payable 50,699 (15) 53,549
-------------------- ----------------- ----------------------
Net cash used in operating activities (579) (4,490) (49,107)
Cash flows from financing activities
Proceeds from related party payable 2,000 4,400 25,215
Repayments of related party payables - (1,500) (1,500)
Contributed capital - - 1,200
Proceeds from issuance of stock - - 25,813
-------------------- ----------------- ----------------------
Net cash provided by financing activities 2,000 2,900 50,728
Net (decrease) increase in cash 1,421 (1,590) 1,621
Cash at beginning of period 200 1,880 -
-------------------- ----------------- ----------------------
Cash at end of period $ 1,621 $ 290 $ 1,621
==================== ================= ======================
Supplemental disclosure of non-cash investing and financing activities:
Issuance of 7,630,058 shares of common stock
for professional and consulting services $ - $ - $ 13,200
==================== ================= ======================
Forgiveness of accrued interest due $ 160 $ - $ 160
==================== ================= ======================
to related parties
Forgiveness of payables due to related parties $ 500 $ - $ 500
==================== ================= ======================
Forgiveness of related party loans $ 23,055 $ - $ 23,055
==================== ================= ======================
Supplemental Cash Flow Information:
Cash paid for interest expense $ - $ - $ -
==================== ================= ======================
Cash paid for income taxes $ - $ - $ -
==================== ================= ======================
See accompanying notes to unaudited financial statements.
4
Rangeford Resources, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Financial Statements
For the Three and Six Months Ended September 30, 2012 and 2011 and the
Period of December 4, 2007 (Inception) to September 30, 2012
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows as of September 30, 2012, and for all
periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's March 31, 2012
audited financial statements. The results of operations for the periods ended
September 30, 2012 and 2011 are not necessarily indicative of the operating
results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
5
Rangeford Resources, Inc.
(A Development Stage Enterprise)
Notes to Unaudited Financial Statements
For the Three and Six Months Ended September 30, 2012 and 2011 and the
Period of December 4, 2007 (Inception) to September 30, 2012
NOTE 3 - RESTATEMENT
The Company has rested its statement of operations and statement of cash flows
for the three six months ended September 30, 2011 after retroactively cancelling
an agreement requiring the company to issue common stock for services performed.
This had the following impact on our financial statements:
Originally Reported Restated Change
------------------------- ---------------- ----------------
Balance Sheet
Common stock $ 10,282 $ 10,182 $ (100)
Additional paid in capital 36,731 28,831 (7,900)
Accumulated deficit (65,803) (57,803) 8,000
Statement of Operations
Professional fees 12,385 4,385 (8,000)
Net loss (12,475) (4,475) 8,000
Statement of Cash Flows
Cash used in operating activities (4,490) (4,490) -
Cash provided by investing activities - - -
Cash provided by financing activities 2,900 2,900 -
NOTE 4 - SUBSEQUENT EVENTS
The Company has entered into various agreements requiring it to issue restricted
common stock to certain consultants. These agreements have obligated the Company
to issue a total of 23,106 restricted common shares each to two separate
consultants and an additional 40,000 restricted common shares to a third
consultant in September.
Two of the agreements require the Company to issue an additional number of
restricted common shares monthly valued at a total of $5,000 using the fair
market value of our common stock as of the last trading day of the month. The
third agreement requires the Company to issue both 20,000 shares of common stock
and 20,000 warrants monthly beginning October 2012.
While the Company has entered into the obligations to issue the common stock in
September, no shares have yet been issued.
In November 2012, the Company has entered into promissory notes totaling
$110,000 in exchange for cash of $110,000. These promissory notes have a term of
60 days from issuance and accrue interest at a rate of 6% per annum. In
addition, the holders of the promissory notes will be issued a total of 275,000
shares of the Company's restricted common stock.
6
At the time of this filing, the transaction has not closed.
In November 2012, the Company entered into a Purchase and Sale Agreement with
Great Northern Energy, Inc. ("Great Northern") to purchase working interests in
oil and gas leases, applied carried interests and farmout rights and certain
other properties and interests in Texas in exchange for $3,900,000. Cash of
$100,000 was paid toward the purchase price. The remaining purchase price is
made in the form of two promissory notes. The first promissory note in the
amount of $1,100,000 ("$1.1 Million Promissory Note") has a term of year from
its issuance date, with payments to be made on a quarterly basis and will be
secured by the assets being purchased. The second promissory note is in the
amount of $2,700,000 ("$2.7 Million Promissory Note") is due June 30, 2013, with
a payment of $1,100,000 due on closing, the note will also be secured by the
assets being purchased. In addition, the Company has agrees to issue 6,500,000
shares of its restricted common stock and reserve an additional 3,500,000 shares
to be used to purchase additional working interests in the properties. The
closing date of the transaction is expected to be December 1, 2012 or 45 days
thereafter if all the conditions of the Purchase and Sale Agreement have not
been met on December 1, 2012.
NOTE 5 - WARRANTS
The fair value of each warrant granted is estimated on the date of grant using
the Black-Scholes option valuation model that uses the assumptions noted in the
following table. Expected volatilities are based on volatilities from similar
companies given our limited trading history.
The expected term of options granted is estimated at the contractual term as
noted in the individual option agreements and represents the period of time that
options granted are expected to be outstanding. The risk-free rate for the
periods within the contractual life of the option is based on the U.S. Treasury
bond rate in effect at the time of grant for bonds with maturity dates at the
estimated term of the options.
September 30, 2012
-------------------------
Expected volatility 91%
Expected dividends 0
Expected term (in years) 1
Risk-free rate 3.125%
A summary of option activity under the Plan as of September 30, 2012 and changes
during the periods then ended are presented below:
Weighted-Average
Weighted-Average Remaining Aggregate
Warrants Shares Exercise Price Contractual Term Intrinsic Value
------------------------------ -------------- ------------------- ---------------------- ------------------
June 30, 2012 - $ - - $ -
Granted 20,000 0.581 2.00 11,620
Exercised - - - -
Forfeited or expired - - - -
September 30, 2012 20,000 $0.581 2.00 $11,620
------------------------------ -------------- ------------------- ---------------------- ------------------
Exercisable at
September 30, 2012 20,000 $0.581 2.00 $11,620
------------------------------ -------------- ------------------- ---------------------- ------------------
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our unaudited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward-looking statements.
The independent registered public accounting firm's report on the Company's
financial statements as of March 31, 2012, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph,
that describes substantial doubt about the Company's ability to continue as a
going concern.
PLAN OF OPERATIONS
------------------
General
Rangeford Resources, Inc. (the "Company") is a development stage company that
was incorporated on December 4, 2007, in the state of Nevada. The Company has
never declared bankruptcy, it has never been in receivership, and it has never
been involved in any legal action or proceedings. The fiscal year end is March
31st. The Company has not had revenues from operations since its inception
and/or any interim period in the current fiscal year.
Plan of Operation
As of September 30, 2012, we have $1,621 of cash available. We have $53,549
current liabilities. From the date of inception (December 4, 2007) to September
30, 2012 the Company has recorded a net loss of $114,656 which were expenses
relating to the initial development of the Company, filing its Registration
Statement on Form S-1, and expenses relating to maintaining Reporting Company
status with the SEC and during the last three month period, the Company's
activities in securing consulting service. In order to survive as a going
concern over the Company will require additional capital investments or borrowed
funds to meet cash flow projections and carry forward our business objectives.
There can be no guarantee or assurance that we can raise adequate capital from
outside sources to fund the proposed business. Failure to secure additional
financing would result in business failure and a complete loss of any investment
made into the Company.
8
Change of Control - Share Purchase Agreement
On July 5, 2012, the Company, Orphan Holdings of Texas, Inc. ("Orphan
Holdings"), its majority shareholder, and RF Colorado Ventures, LLC ("RF
Colorado") executed a Share Purchase Agreement (the "Agreement") that provides
for the RF Colorado to purchase 9,900,000 shares of the Company's common stock
held by Orphan Holdings for a total purchase price of $300,000, to be paid by RF
Colorado. As a result of the purchase, RF Colorado, became the majority and
controlling shareholder of the Company.
Funding Activities
In October and November 2012, the Company has entered into promissory notes
totaling $110,000 in exchange for cash of $110,000. These promissory notes have
a term of 60 days from issuance and accrue interest at a rate of 6% per annum.
In addition, the holders of the promissory notes will be issued a total of
275,000 shares of the Company's restricted common stock.
Purchase and Sale Agreement
In November 2012, the Company entered into a Purchase and Sale Agreement with
Great Northern Energy, Inc. ("Great Northern") to purchase working interests in
oil and gas leases, applied carried interests and farmout rights and certain
other properties and interests in Texas in exchange for $3,900,000. Cash of
$100,000 was paid toward the purchase price. The remaining purchase price is
made in the form of two promissory notes. The first promissory note in the
amount of $1,100,000 ("$1.1 Million Promissory Note") has a term of year from
its issuance date, with payments to be made on a quarterly basis and will be
secured by the assets being purchased. The second promissory note is in the
amount of $2,700,000 ("$2.7 Million Promissory Note") is due June 30, 2013, with
a payment of $1,100,000 due on closing, the note will also be secured by the
assets being purchased. In addition, the Company has agrees to issue 6,500,000
shares of its restricted common stock and reserve an additional 3,500,000 shares
to be used to purchase additional working interests in the properties. The
closing date of the transaction is expected to be December 1, 2012 or 45 days
thereafter if all the conditions of the Purchase and Sale Agreement have not
been met on December 1, 2012.
Research and Development
The Company does not anticipate any costs or expenses to be incurred for
research and development within the next six months.
Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transaction, agreement
or other contractual arrangement to which an entity unconsolidated with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.
9
We will need substantial additional capital to support our proposed future
energy operations. We have no revenues. We have no committed source for any
funds as of date here. No representation is made that any funds will be
available when needed. In the event funds cannot be raised when needed, we may
not be able to carry out our business plan, may never achieve sales or royalty
income, and could fail in business as a result of these uncertainties.
Decisions regarding future participation in exploration wells or geophysical
studies or other activities will be made on a case-by-case basis. We may, in any
particular case, decide to participate or decline participation. If
participating, we may pay our proportionate share of costs to maintain our
proportionate interest through cash flow or debt or equity financing. If
participation is declined, we may elect to farmout, non-consent, sell or
otherwise negotiate a method of cost sharing in order to maintain some
continuing interest in the prospect.
RESULTS OF OPERATIONS
---------------------
For the Three Months Ended September 30, 2012 Compared to the Three Months Ended
September 30, 2011
During the three months ended September 30, 2012 and 2011, the Company did not
recognize any revenues from it operating activities. In part, because such
activities were focused on identifying opportunities and the listing of the
Company's common stock on the over the counter market for trading.
During the three months ended September 30, 2012, the Company recognized a net
loss of $59,983 compared to $1,545 for the three months ended September 30,
2011. The increase of $58,438 was a result of the Company's increase in
operational expenses of the same During the three months ended September 30,
2012, the Company saw an increase advertising and promotion of $17,104 and an
increase of $38,853 in professional fees which was a result of the Company's
increased activities as far as securing consulting services and legal services
in working to identifying possible oil and gas properties for acquisition.
For the Six Months Ended September 30, 2012 Compared to the Six Months Ended
September 30, 2011
During the six months ended September 30, 2012 and 2011, the Company did not
recognize any revenues from it operating activities. In part, because such
activities were focused on identifying opportunities and the listing of the
Company's common stock on the over the counter market for trading.
During the six months ended September 30, 2012, the Company recognized an
operational expense of $61,698 compared to $4,475 during the six months ended
September 30, 2011. The increase of $57,233 was a result of the $37,638 increase
in professional fees combined with a $17,104 increase in advertising and
promotion expenses. These increases are a result of the Company's increased
activities in securing consulting services and legal services in working to
identify possible oil and gas properties for acquisition.
During the six months ended September 30, 2012, the Company recognized a net
loss of $61,698 compared to $4,475 during the six months ended September 30,
2011. The increase of $57,233 was a direct result of the same increase in
operational expenses, discussed above.
10
LIQUIDITY
---------
At September 30, 2012, we had total current assets of $2,821, consisting of cash
of $1,621 and other current asset of $1,200. At September 30, 2012, we had total
current liabilities of $53,549, consisting solely of accounts payables. At
September 30, 2012, we have a working capital deficit of $50,728.
During the six months ended September 30, 2012, we used cash of $579 in our
operations compared to $4,490 during the six months ended September 30, 2011.
During the six months ended September 30, 2012, we received funds of $2,000 from
our financing activities compared to $2,900 during the three months ended
September 30, 2011.
The Company had received loans from two of its shareholders totaling $22,555
from inception to March 31, 2012 for the purposes of funding startup operations.
This includes $7,060 and $2,000 received during the years ended March 31, 2012
and 2011. These loans are non-interest bearing and are due on demand and as such
are included in current liabilities. At June 30, 2012, these loans were paid in
full.
The Company has entered into various agreements requiring it to issue restricted
common stock to certain consultants. These agreements have obligated the Company
to issue a total of 23,106 restricted common shares each to two separate
consultants and an additional 40,000 restricted common shares to a third
consultant in September.
Two of the agreements require the Company to issue an additional number of
restricted common shares monthly valued at a total of $5,000 using the fair
market value of our common stock as of the last trading day of the month. The
third agreement requires the Company to issue both 20,000 shares of common stock
and 20,000 warrants monthly beginning October 2012.
While the Company has entered into the obligations to issue the common stock in
September, no shares have yet been issued.
Short Term.
On a short-term basis, we have not generated any revenue or revenues sufficient
to cover operations. Based on prior history, we will continue to have
insufficient revenue to satisfy current and recurring liabilities as the Company
continues exploration activities.
Capital Resources
The Company has only common stock as its capital resource.
We have no material commitments for capital expenditures within the next year,
however if operations are commenced, substantial capital will be needed to pay
for participation, investigation, exploration, acquisition and working capital.
Need for Additional Financing
We do not have capital sufficient to meet its cash needs. The Company will have
to seek loans or equity placements to cover such cash needs. Once exploration
commences, its needs for additional financing is likely to increase
substantially.
11
No commitments to provide additional funds have been made by the Company's
management or other stockholders. Accordingly, there can be no assurance that
any additional funds will be available to us to allow us to cover the Company's
expenses as they may be incurred.
The Company will need substantial additional capital to support its proposed
future energy operations. We have no revenues. The Company has no committed
source for any funds as of the date hereof. No representation is made that any
funds will be available when needed. In the event funds cannot be raised when
needed, we may not be able to carry out our business plan, may never achieve
sales or royalty income, and could fail in business as a result of these
uncertainties.
Decisions regarding future participation in exploration wells or geophysical
studies or other activities will be made on a case-by-case basis. The Company
may, in any particular case, decide to participate or decline participation. If
participating, we may pay its proportionate share of costs to maintain the
Company's proportionate interest through cash flow or debt or equity financing.
If participation is declined, the Company may elect to farmout, non-consent,
sell or otherwise negotiate a method of cost sharing in order to maintain some
continuing interest in the prospect.
Critical Accounting Policies
----------------------------
Cash
Cash and cash equivalents include short-term, highly liquid investments with
maturities of less than three months when acquired. Fair Value of Financial
Instruments The Company's financial instruments as defined by FASB ASC 825-10-50
include cash, trade accounts receivable, and accounts payable and accrued
expenses. All instruments are accounted for on a historical cost basis, which,
due to the short maturity of these financial instruments, approximates fair
value at June 30, 2012 and 2011.
FASB ASC 820 defines fair value, establishes a framework for measuring fair
value in accordance with generally accepted accounting principles, and expands
disclosures about fair value measurements. ASC 820 establishes a three-tier fair
value hierarchy which prioritizes the inputs used in measuring fair value as
follows:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets, that
are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market
data, which requires the reporting entity to develop its own
assumptions.
The Company does not have any assets or liabilities measured at fair value on a
recurring basis at September 30, 2012 and March 31, 2012. The Company did not
have any fair value adjustments for assets and liabilities measured at fair
value on a nonrecurring basis during the three months ended September 30, 2012
and 2011.
12
ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain "disclosure controls and procedures," as such term is defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"),
that are designed to ensure that information required to be disclosed in our
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission rules and
forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate, to allow timely decisions regarding required disclosure. We
conducted an evaluation (the "Evaluation"), under the supervision and with the
participation of our Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO"), of the effectiveness of the design and operation of our disclosure
controls and procedures ("Disclosure Controls") as of the end of the period
covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on
this Evaluation, our CEO and CFO concluded that our Disclosure Controls were
effective as of the end of the period covered by this report.
Limitations on the Effectiveness of Controls
Our management, including our CEO and CFO, does not expect that our Disclosure
Controls and internal controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management or board override
of the control.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). The Company's internal control over financial reporting is a process
designed to provide reasonable assurance to our management and board of
directors regarding the reliability of financial reporting and the preparation
of the financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
13
Our internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America, and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company;
and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting
may not prevent or detect misstatements. All internal control systems, no matter
how well designed, have inherent limitations, including the possibility of human
error and the circumvention of overriding controls. Accordingly, even effective
internal control over financial reporting can provide only reasonable assurance
with respect to financial statement preparation. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial
reporting as of September 30, 2012. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Based on our
assessment, we believe that, as of September 30, 2012, the Company's internal
control over financial reporting was effective based on those criteria.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in this annual
report.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during
the quarter ended September 30, 2012, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE.
ITEM 1A. RISK FACTORS
Not Applicable to Smaller Reporting Companies.
ITEM 2. CHANGES IN SECURITIES
The Company has entered into various agreements requiring it to issue restricted
common stock to certain consultants. These agreements have obligated the Company
to issue a total of 23,106 restricted common shares each to two separate
consultants and an additional 40,000 restricted common shares to a third
consultant in September.
14
Two of the agreements to management require the Company to issue an additional
number of restricted common shares monthly valued at a total of $5,000 using the
fair market value of our common stock as of the last trading day of the month.
The third consulting agreement requires the Company to issue both 20,000 shares
of common stock and 20,000 warrants monthly beginning September 2012.
While the Company has entered into the obligations to issue the common stock in
September, no shares have yet been issued.
Exemption From Registration Claimed
All of the above sales by the Company of its unregistered securities were made
by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). All of the individuals and/or entities that purchased
the unregistered securities were primarily existing shareholders, known to the
Company and its management, through pre-existing business relationships, as long
standing business associates and employees. All purchasers were provided access
to all material information, which they requested, and all information necessary
to verify such information and were afforded access to management of the Company
in connection with their purchases. All purchasers of the unregistered
securities acquired such securities for investment and not with a view toward
distribution, acknowledging such intent to the Company. All certificates or
agreements representing such securities that were issued contained restrictive
legends, prohibiting further transfer of the certificates or agreements
representing such securities, without such securities either being first
registered or otherwise exempt from registration in any further resale or
disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.
ITEM 4. MINE SAFETY DISCLOSURE.
Not Applicable.
ITEM 5. OTHER INFORMATION
NONE.
ITEM 6. EXHIBITS
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Exhibit 31.1 Certification of Chief Financial Officer and Principal Executive
Officer pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32.1 Certification of Principal Executive and Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act
15
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
RANGEFORD RESOURCES, INC.
(Registrant)
Dated: November 20, 2012 By: /s/Fred Zeigler
--------------
Fred Zeigler (President,
and Principal Accounting Officer)
1
