Form 8-K for DORAL ENERGY CORP.
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6-Dec-2010
Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01 Entry Into A Material Definitive Agreement
On December 2, 2010, Doral Energy Corp. (the "Company") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Pure Gas Partners II, L.P. ("Pure") and Pure Energy Group, Inc., a wholly owned subsidiary of Pure ("Pure Sub"). Pursuant to the provisions of the Merger Agreement, Pure Sub will merge with and into Doral Acquisition Corp. ("Doral Sub"), with Doral Sub continuing as the surviving corporation (the "Merger"). Doral Sub is the wholly owned subsidiary of the Company incorporated solely for the purpose of completing the Merger.
In addition to standard conditions to closing, closing of the Merger is conditional upon the following events:
(1) Pure transferring all of its assets to Pure Sub in exchange for the assumption by Pure Sub of all of Pure's liabilities;
(2) Pure receiving the approval of its general partner and limited partners holding a majority of the limited partnership interests of each limited partnership class;
(3) The completion by the Company of a 1-for-55 reverse split of its common stock (the "Reverse Split"); and
(4) The Company receiving a favorable opinion from its financial advisors that the transaction is fair to the Company's shareholders
Upon completion of the Reverse Split, the Company's authorized capital is expected to be reduced from 2,000,000,000 shares of common stock, par value $0.001 per share, of which 135,933,086 shares are outstanding as of the date of this report, to 36,363,637 shares of common stock, par value $0.001 per share of which 2,471,511 shares are expected to be outstanding (prior to closing the Merger and not including adjustments for resulting fractional share interests). Upon completion of the Merger, it is expected that each share of Pure Sub common stock will be converted into 19.963072 shares of the Company's common stock, resulting in the Company issuing an aggregate of 9,981,536 shares of common stock to Pure. Completion of the Merger is expected to ultimately result in the Company having a total of approximately 12,453,047 Post-Reverse Split shares outstanding, with Pure owning approximately 80% of the Company's total outstanding shares on a fully diluted basis, and the Company's existing shareholders owning the remaining 20%.
In addition, upon completion of the Merger, the Company intends to change its name to "Cross-Border Resources, Inc." and add three new members to its board of directors, bringing the total number of the Company's directors to five. In addition, upon completion of the Merger, the Company expects to appoint a new Chief Operating Officer and a new Chief Financial Officer. Mr. Everett Willard Gray, II is expected to continue to act as Chairman of our Board of Directors and as our Chief Executive Officer and Mr. Brad Heidelberg is expected to continue to act as a member of our Board of Directors.
The above description of the Merger Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01 Financial Statements And Exhibits.
(d) Exhibits
Exhibit
Number Description of Exhibit
10.1 Agreement and Plan of Merger entered into on December 2, 2010 among
Doral Energy Corp., Doral Acquisition Corp., Pure Gas Partners II,
L.P. and Pure Energy Group, Inc.
99.1 News Release dated December 3, 2010
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