SUPPLEMENT TO OFFER TO PURCHASE FOR CASH
DATED JANUARY 24, 2001
of
UP TO 4,225,000 SHARES OF COMMON STOCK
of
RANGER INDUSTRIES, INC.
at $2.00 Per Share in Cash
by
BUMGARNER ENTERPRISES, INC.
The information contained in this Supplement (this "Supplement") to the
Offer to Purchase dated December 29, 2000 of Bumgarner Enterprises, Inc., a
Florida corporation ("Bumgarner") of which Charles G. Masters is the
owner of 77.452% its common stock (the "Offer to Purchase," and together with
the related letter of transmittal, each as amended or supplemented from time to
time, the "Offer Documents"), amends and supplements the Offer
Documents. Except as otherwise set forth in this Supplement, the terms and
conditions previously set forth in the Offer Purchase remain applicable in
all respects to the Tender Offer, and this Supplement should be read in
conjunction with the Offer to Purchase. Unless the context requires otherwise,
terms not defined herein have the meanings ascribed to them in the Offer to
Purchase. All page number references set forth herein refer to the Offer to
Purchase.
Procedures for tendering shares are set forth in The Tender Offer -
Procedure for Tendering Shares of the Offer to Purchase. Tendering shareholders
may use the original (blue) Letter of Transmittal and the original (gray)
Notice of Guaranteed Delivery previously circulated with the Offer to Purchase.
Shares previously validly tendered and not withdrawn constitute valid
tenders for purposes of the Tender Offer. Shareholders are not required to take
any further action with respect to such shares in order to derive the benefits
of the amendments to the Offer Documents contained herein. See The Tender Offer
- - Withdrawal Rights of the Offer to Purchase for the procedures for withdrawing
shares of Ranger common stock tendered pursuant to the Offer to Purchase.
The Offer to Purchase, this Supplement and the related letter of
transmittal contain important information which should be read before any
decision is made with respect to the Tender Offer.
We hereby amend and supplement the Offer Documents as follows:
1. Extension of Tender Offer.
The Offer Documents are amended and supplemented as follows:
The expiration date of the Tender Offer has been extended to 5:00 P.M.,
New York City time, on January 31, 2001, unless and until Bumgarner shall
further extend the period of time during which the Tender Offer is open, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Tender Offer, as so extended by Bumgarner, shall expire.
2. Charles G. Masters Added as a Co-Bidder of the Tender Offer.
The Offer Documents are amended and supplemented as follows:
All references to "Bumgarner Enterprises, Inc." or "Bumgarner" in the
context of knowledge or information held by Bumgarner and any duties to disclose
that knowledge or information shall include Charles G. Masters. In all other
cases, "Bumgarner Enterprises, Inc." or "Bumgarner" shall refer only to
Bumgarner Enterprises, Inc.
3. Forward-Looking Statements.
The fourth and fifth paragraphs on page iii are deleted.
4. Proration and Delay in Payment.
The second paragraph on page 10 is amended and supplemented to read in its
entirety as follows:
"In the event of proration, Bumgarner will determine the proration factor
and pay for those tendered shares accepted for payment as soon as practicable
after the Expiration Date; however, Bumgarner does not expect to be able to
announce the final results of any proration and commence payment for shares
purchased until approximately seven business days after the Expiration Date.
Certificates for all shares tendered and not purchased, including shares not
purchased due to proration, will be returned to the tendering shareholder, or,
in the case of shares tendered by book-entry transfer, will be credited to the
account maintained with the book-entry transfer facility by the participant
therein who so delivered the shares, at Bumgarner's expense as promptly as
practicable after the Expiration Date or termination of the Tender Offer without
expense to the tendering shareholders; provided, however, that under the Handel
and Perlmutter Purchase Agreements, Bumgarner has agreed to purchase all shares
held by Messrs. Handel and Perlmutter which are tendered in the Tender Offer but
not purchased because of proration, at a price of $2.00 per share. The purchase
will be made simultaneously with the closing of the Tender Offer. See Special
Factors - Interests of Certain Persons in the Tender Offer and the Merger,
above. Under no circumstances will interest on the purchase price be paid by
Bumgarner regardless of any delay in making such payment. In addition, if
certain events occur, Bumgarner may not be obligated to purchase shares under
the Tender Offer. See The Tender Offer - Conditions to the Tender Offer, below."
5. Acceptance for Payment and Payment.
The first paragraph on page 12 is amended and supplemented to read in its
entirety as follows:
"Upon the terms and subject to the conditions to the Tender Offer
(including, if the Tender Offer is amended, the terms and conditions of any such
amendment), Bumgarner will purchase by accepting for payment and will pay for up
to 4,255,000 shares of Ranger common stock validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with The Tender Offer -
Withdrawal Rights, below. All determinations concerning the satisfaction of such
terms and conditions will be within Bumgarner's sole discretion, which
determinations will be final and binding. See The Tender Offer - Terms of the
Tender Offer, above, and The Tender Offer - Procedure for Tendering Shares,
below. Subject to any limits which may be imposed by the Merger Agreement,
Bumgarner expressly reserves the right, in its sole discretion, to delay
acceptance for payment of, or payment for, shares in order to obtain any
necessary governmental regulatory approvals. Any such delays will be effected in
compliance with Rule 14e-l(c) under the Exchange Act (relating to a bidder's
obligation to pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of such bidder's offer)."
6. Certain Information Concerning Ranger.
The Notes to Pro Forma Condensed Consolidated Financial Statements are
amended and supplemented by inserting the following information after Note 3 on
page 24:
"4. Subsequent events:
In January 2001, Bumgarner entered into a loan agreement with Guaranty
Bank & Trust Company, Denver, Colorado, pursuant to which the
unrestricted funds reflected on the Pro Forma Condensed Consolidated
Balance Sheet (the "Balance Sheet") will be ($9,000,000) (the amount
of funds that will collateralize the financing) and restricted funds
will be $9,000,000, rather than ($8,450,000) and $8,450,000,
respectively, as reflected on the Balance Sheet. This will result in
unrestricted cash on a pro forma consolidated basis of
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$1,191,437, rather than $1,741,437 as reflected on the Balance Sheet.
In addition, the entire loan amount of $8,500,000 is classified as a
long-term, rather than current, liability. In the event that less than
the entire Tender Offer is subscribed for, additional unrestricted
cash will be available to Ranger on a pro forma basis."
7. Certain Information Concerning Bumgarner.
o The information on page 33 is amended and supplemented by inserting the
following financial information of Bumgarner immediately before the
financial information of Bumgarner for the period ending November 1, 2000:
Bumgarner Enterprises, Inc.
(A Development Stage Enterprise)
Balance Sheet
December 31, 1999
(Unaudited)
Assets
Current assets:
Cash
$ 1
Total current assets
--------
Total assets $ 1
========
Liabilities and Stockholder's Equity
Stockholder's equity
Common stock, $.001 par, authorized 20,000,000 shares, $ 1
issued and outstanding, 1000 shares
Preferred stock, $.01 par, authorized 10,000,000 shares
--------
Total stockholder's equity 1
--------
--------
Total liabilities and stockholder's equity $ 1
========
Bumgarner Enterprises, Inc.
(A Development Stage Enterprise)
Statement of Operations
For the year ended December 31, 1999
(Unaudited)
------
Revenues $ -
------
Operating expenses:
------
Total operating expenses -
------
Income tax expense -
------
------
Net loss $ -
======
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Bumgarner Enterprises, Inc.
(A Development Stage Enterprise)
Statement of Stockholders' Equity
For the year ended December 31, 1999
(Unaudited)
Common Stock During Development
------------ ------------------
Shares Amount Stage Total
Balances, December 31, 1998 1,000 $ 1 - $ 1
----------------------------------------------------
Balances, December 31, 1999 1,000 $ 1 - $ 1
====================================================
1. Summary of significant accounting policies and basis of presentation.
Nature of business:
Bumgarner was incorporated under the laws of the State of Florida in March
1998. There has been no significant business activity since inception.
Bumgarner intends to operate in the oil and gas industry, acquiring
interests in non-producing or producing oil and gas properties and
participating in drilling operations.
Use of estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles 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 amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
2. Subsequent events.
In October 2000, Bumgarner acquired a 74.415% working interest in the
Joint Venture - Henryetta ("Henryetta") which was formed as a general
partnership under Oklahoma law and owns four leasehold interests in
Okfuskee and Coal counties, Oklahoma. The properties at present have no
producing oil or gas wells, although initial plans are to drill and
develop four wells at a total cost of approximately $2,200,000. The Joint
Venture automatically terminates, unless renewed, in 2010.
Consideration for this equity interest was in the form of a $2,073,728
promissory note payable to Henryetta, which bears interest at 6% and is
payable in full by October 10, 2001. Bumgarner will forfeit its interest
in Henryetta (pro-rata with any unpaid balance) if the note is not paid by
the due date.
The Joint Venture has agreed to pay one of the partners in the Joint
Venture- Henryetta (Inter-Oil & Gas, Inc.) a management fee aggregating
$149,316. That partner also manages the joint venture and is reimbursed
for any costs it incurs in that regard. Finally, in addition to the
aforementioned management fees, that same partner will earn $25,000 as an
operating fee in connection with the two initial wells to be drilled in
Coal County and $12,000 for the wells to be drilled in Okfuskee County.
Under the terms of the Joint Venture - Henryettta agreement, and subject
to satisfaction of the promissory note, Bumgarner is responsible for
approximately 93% of expenses and is entitled to 93% of all distributions
until such time as its investment has been recovered. The other members
will share collectively share in the remaining 7%. Thereafter profits,
losses and distributions shall be allocated 74.415% to Bumgarner, 20% to
Inter-Oil and Gas, Inc. and 5.585% to others.
o The discussion on page 37 is amended and supplemented by inserting the
following information immediately after the end of footnote 6 to the
Bumgarner financial statements on page 37, but before the paragraph
relating to "Office Facilities":
"Neither Bumgarner nor Mr. Masters is subject to the periodic reporting
requirements of the Securities Exchange Act and audited financial information
for the last two fiscal years is not available and cannot be obtained without
unreasonable cost or expense.
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Charles G. Masters, a co-bidder in the Tender Offer, has a personal net
worth of approximately $100,000. This includes a value of zero dollars for Mr.
Masters' direct and indirect 77.452% interest in Bumgarner. Although Mr. Masters
believes that his interest in Bumgarner has a value significantly greater than
zero dollars, Bumgarner's financial statements as of November 1, 2000 reflect
that Bumgarner has a shareholders' deficit of $29,999. The bulk of the assets
constituting Mr. Masters' net worth are not readily marketable and include his
home, furnishings, and automobiles."
8. Amendment to Source and Amount of Funds.
The Offer Documents are amended and supplemented as follows:
"Bumgarner will borrow all of the funds necessary to complete the Tender
Offer and its obligations under the Handel and Perlmutter Purchase Agreements
from Guaranty Bank & Trust Company, Denver, Colorado ("Guaranty"). Bumgarner and
Guaranty have entered into a loan agreement by which Guaranty has agreed to
provide up to $8.5 million to Bumgarner. The loan agreement provides for
Bumgarner to pay a fee of $4,000, and interest of 6.4% per annum on a monthly
basis throughout the term of the loan. The term of the loan is 24 months and it
matures on January 29, 2003. Bumgarner has agreed to collateralize the loan
using $9,000,000 that Ranger has agreed to place on deposit with Guaranty (which
will earn interest at 4.4% per annum). The loan agreement provides that
Bumgarner may pay the entire amount due at any time before the maturity date,
with no prepayment penalty. Bumgarner may elect to prepay a portion of the loan
with the funds on deposit, but expects to be able to repay the loan with cash
flow from its anticipated operations, if successful. Bumgarner does not
currently have alternative financing arrangements or alternative financing plans
in the event the financing with Guaranty falls through."
9. Clarification of the Timing of the Merger and the Tender Offer.
The Offer Documents are amended and supplemented as follows:
An amendment to the Merger Agreement was entered into on January 23, 2001
by and among Bumgarner, Ranger and BEI Acquisition Corporation to provide for
the consummation of the Merger immediately prior to the consummation of the
Tender Offer. Therefore, all references to the simultaneous consummation of the
Merger and closing of the Tender Offer are amended to reflect that the Merger
will be completed immediately prior to the closing of the Tender Offer.
10. Certain Information Concerning Bumgarner.
The information on page 39 is amended and supplemented by inserting the
following immediately after the first full paragraph on page 39:
"The Merger Agreement provides that, at the closing of the Merger
Agreement, the directors of Ranger will appoint designees of Bumgarner to serve
as directors of Ranger commencing at the effective time of the Merger, and the
persons who served as directors of Ranger prior to such effective time will
resign."
11. Conditions to the Tender Offer.
The full first paragraph on page 40 is amended and supplemented to read in
its entirety as follows:
"The foregoing conditions are for the sole benefit of Bumgarner and,
subject to anything to the contrary in the Merger Agreement, may be waived by
Bumgarner, in whole or in part at any time and from time to time, in the sole
discretion of Bumgarner; provided that all conditions, other than those
involving receipt of necessary government approvals, will be satisfied or waived
on or before the Expiration Date."
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Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for shares
and any other required documents should be sent or delivered by each shareholder
of Ranger or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary, at one of the addresses set forth below:
The Depositary for the Tender Offer is:
Continental Stock Transfer & Trust Company
By Mail, Overnight Courier and Hand:
Continental Stock Transfer & Trust Company
Reorganization Department
2 Broadway
New York, New York 10004
By Facsimile Transmissions
(for Eligible Institutions Only):
(212) 616-7610
Confirm by Telephone:
(212) 845-3226
Any questions or requests for assistance or additional copies of the Offer
to Purchase, this Supplement, the Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification on Substitute Form W-9 may be directed to the Information Agent
at the address and telephone numbers set forth below. Shareholders may also
contact their broker, dealer, commercial bank or trust company for assistance
concerning the Tender Offer.
The Information Agent for the Tender Offer is:
Beacon Hill Partners, Inc.
90 Broad Street
New York, New York 10004
Call Collect (212) 843-8500
Call Toll Free (800) 755-5001
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