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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 23, 2006
RADIAL ENERGY, INC.
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(Exact name of registrant as specified in its charter)
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Delaware 333-113726 72-1580091
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1313 East Maple St.
Bellingham WA 98225
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(Address of principal executive offices, including zip code)
(360) 685-4200
(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.23e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On August 23, 2006, we entered into a binding letter of intent with Maxim Well
Services Ltd. ("Maxim"), with its principal place of business in Bogota,
Columbia, to enter into a joint operating agreement, the purpose of which is for
Radial to acquire a twenty percent (20%) working interest in the right to
explore and develop oil reserves and production on the 9,000 hectare (22,239
acre) "Bosque Block" located in prolific Middle Magdalena Valley of Columbia.
Our working interest will be subject to a joint operating agreement with Maxim,
to be negotiated.
We will be required to contribute $2.2 million in cash in stages beginning on
execution of the joint operating agreement. Three Hundred Fifty Thousand Dollars
($350,000) will be due upon signing the joint operating agreement and another
Three Hundred Fifty Thousand Dollars ($350,000) will be due sixty (60) days
following the signing of the joint operating agreement. The remaining One
Million Five Hundred Thousand Dollars ($1,500,000) will be due fifteen (15) days
following any capital call made by Maxim at any time following the execution of
the joint operating agreement.
Until such time that Radial recoups $1.5 million of its investment, it will
receive a 33.33% participation in distributions. Following recoupment of $1.5
million of its investment, Radial's interest will remain at 20%.
Radial has until October 22, 2006, to enter into the joint operating agreement
with Maxim, which may be extended by Maxim until November 22, 2006. If Radial
fails to enter into the joint operating agreement with Maxim by the deadline,
then Maxim will have no obligation to enter into the joint operating agreement
or accept the investment from Radial on the terms expressed in the letter of
intent. Further, if Radial fails to properly execute the joint operating
agreement, it shall be liable to Maxim for a termination fee of up to $200,000
as follows: (a) $50,000 if Radial terminates at any time on or before the date
the Colombian government issues the appropriate authority to Maxim to begin
operations at the site, (b) a total of $100,000 if Radial terminates following
the date the Colombian government issues such authority, and (c) a total of
$200,000 if Radial terminates more than thirty (30) days following the date the
Columbian government issues such authority.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RADIAL ENERGY, INC.
Dated: September 18, 2006 By: /s/ G. LEIGH LYONS
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G. Leigh Lyons
President, Chief Executive
Officer, and Chief Financial Officer