Attached files
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EX-32.1 - EXHIBIT 32.1 - Royal Energy Resources, Inc. | ex32-1.htm |
EX-31.1 - EXHIBIT 31.1 - Royal Energy Resources, Inc. | ex31-1.htm |
EXCEL - IDEA: XBRL DOCUMENT - Royal Energy Resources, Inc. | Financial_Report.xls |
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: May 31, 2014
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
Royal Energy Resources, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 000-52547 | 11-3480036 | ||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
of Incorporation or Organization) | File Number) | Identification No.) |
543
Bedford Avenue, #176, Brooklyn, NY 11211
(Address of Principal Executive Offices) (Zip Code)
800-620-3029
(Registrant’s telephone number, including area code)
N/A
(Former name or former address and former fiscal year, if changed since last report)
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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such 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 of Regulation S-T (§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 [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] | Accelerated filer [ ] | Non-accelerated filer [ ] | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 10,104,609 shares of common stock issued and 10,100,317 shares of common stock outstanding as of June 30, 2014.
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“Commission”). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, contained in the Company’s Form 10-K dated August 31, 2013.
TABLE OF CONTENTS
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1: | Condensed Unaudited Consolidated Financial Statements | F-1 |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 5 |
Item 4: | Controls and Procedures | 5 |
PART II - OTHER INFORMATION | ||
Item 1: | Legal Proceedings | 6 |
Item 1A: | Risk Factors | 6 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 6 |
Item 3: | Defaults upon Senior Securities | 6 |
Item 4: | Submission of Matters to a Vote of Security Holders | 6 |
Item 5: | Other Information | 6 |
Item 6: | Exhibits | 6 |
2 |
PART I - Financial Information
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Condensed Consolidated Balance Sheets
May 31, 2014 | August 31, 2013 | |||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 16,822 | $ | 32,541 | ||||
Total current assets | 16,822 | 32,541 | ||||||
Properties: | ||||||||
Mining properties | 12,900 | 10,760 | ||||||
Accumulated depreciation, depletion and amortization | - | - | ||||||
Net properties | 12,900 | 10,760 | ||||||
Total assets | $ | 29,722 | $ | 43,301 | ||||
Liabilities and Stockholders’ Deficit | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 99,930 | $ | 98,091 | ||||
Notes payable | 86,500 | 95,050 | ||||||
Due to shareholder | 842 | 28,792 | ||||||
Total current liabilities | 187,272 | 221,933 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ deficit | ||||||||
Preferred stock: $0.00001 par value; authorized 10,000,000 shares; 100,000 shares issued and outstanding at February 28, 2014 and at August 31, 2013 | 1 | 1 | ||||||
Common stock: $0.00001 par value; authorized 500,000,000 shares;10,104,609 and 179,527 shares issued and 10,100,317 and 179,527 shares outstanding at May 31, 2014 and August 31, 2013, respectively | 101 | 2 | ||||||
Additional paid-in capital | 3,739,191 | 3,512,841 | ||||||
Accumulated deficit | (28,995 | ) | (28,995 | ) | ||||
Deficit accumulated during the development stage | (3,865,251 | ) | (3,662,481 | ) | ||||
Treasury stock at cost (4,292 shares) | (2,597 | ) | - | |||||
Total stockholders’ deficit | (157,550 | ) | (178,632 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 29,722 | $ | 43,301 |
See accompanying notes to condensed consolidated financial statements.
F-1 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Condensed Consolidated Statements of Operations
Three and nine months ended May 31, 2014 and 2013
from inception (July 22, 2005) through May 31, 2014
(Unaudited)
Inception | ||||||||||||||||||||
(July 22, 2005) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | Through | ||||||||||||||||||
May 31, | May 31, | May 31, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | ||||||||||||||||
Oil and gas production | $ | - | $ | - | $ | - | $ | - | $ | 29,704 | ||||||||||
Total revenues | - | - | - | - | 29,704 | |||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of leases sold | - | - | - | - | 13,260 | |||||||||||||||
Lease operating expense | - | - | - | - | 14,494 | |||||||||||||||
Production taxes | - | - | - | - | 913 | |||||||||||||||
Depreciation, depletion and amortization | - | - | - | - | 2,148 | |||||||||||||||
Asset impairment | - | - | - | 4,329 | 79,493 | |||||||||||||||
Selling, general and administrative expense | 66,072 | 324,489 | 172,690 | 382,490 | 3,665,806 | |||||||||||||||
Total costs and expenses | 66,072 | 324,489 | 172,690 | 386,819 | 3,776,114 | |||||||||||||||
Loss from operations | (66,072 | ) | (324,489 | ) | (172,690 | ) | (386,819 | ) | (3,746,410 | ) | ||||||||||
Other expenses (income): | ||||||||||||||||||||
Loss on disposition by condominium rescission agreement | - | - | - | - | 15,000 | |||||||||||||||
Other income | - | (12,386 | ) | (100 | ) | (12,386 | ) | (12,486 | ) | |||||||||||
Loss (gain) on commodities trading | 13,374 | - | 8,817 | - | 45,374 | |||||||||||||||
Interest income | - | - | - | - | (4,414 | ) | ||||||||||||||
Interest income - related party | - | (1,479 | ) | - | (4,505 | ) | (33,540 | ) | ||||||||||||
Interest expense | 249 | 249 | 21,363 | 5,617 | 108,907 | |||||||||||||||
Total other expense (income) | 13,623 | (13,616 | ) | 30,080 | (11,274 | ) | 118,841 | |||||||||||||
Net loss | $ | (79,695 | ) | $ | (310,873 | ) | $ | (202,770 | ) | $ | (375,545 | ) | $ | (3,865,251 | ) | |||||
Net loss per share, basic and diluted | $ | (0.01 | ) | $ | (1.73 | ) | $ | (0.05 | ) | $ | (2.09 | ) | ||||||||
Weighted average shares outstanding, basic and diluted | 8,758,722 | 179,527 | 4,329,411 | 179,527 |
See accompanying notes to condensed consolidated financial statements.
F-2 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Statements of Consolidated Stockholders’ Deficit
Inception of Development Stage, July 22, 2005, through May 31, 2014
Additional | ||||||||||||||||||||
Preferred stock | Common stock | Paid-in | ||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | ||||||||||||||||
Inception, July 22, 2005 | - | - | 11,861 | 1 | 22,484 | |||||||||||||||
Sale of common stock for cash | - | - | 640 | - | 32,000 | |||||||||||||||
Common stock issued for real estate investment | - | - | 3,800 | - | 190,000 | |||||||||||||||
Contribution to capital | - | - | - | - | 6,560 | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2005 | - | - | 16,301 | 1 | 251,044 | |||||||||||||||
Sale of common stock for cash | - | - | 2,173 | - | 120,500 | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2006 | - | - | 18,474 | 1 | 371,544 | |||||||||||||||
Sale of common stock | - | - | 9,340 | - | 161,660 | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2007 | - | - | 27,814 | 1 | 533,204 | |||||||||||||||
Sale of preferred stock | 100,000 | 1 | - | - | 999 | |||||||||||||||
Sale of common stock | - | - | 4,591 | - | 413,172 | |||||||||||||||
Common stock issued for consulting contracts | - | - | 5,930 | - | 977,775 | |||||||||||||||
Cash portion of consulting contracts | - | - | - | - | - | |||||||||||||||
Rescission of real estate purchase | - | - | (3,800 | ) | - | (200,000 | ) | |||||||||||||
Amortization of deferred expenses: | ||||||||||||||||||||
Non-cash portion | - | - | - | - | - | |||||||||||||||
Cash portion | - | - | - | - | - | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2008 | 100,000 | 1 | 34,535 | 1 | 1,725,150 | |||||||||||||||
Sale of common stock for cash | - | - | 40 | - | 3,600 | |||||||||||||||
Common stock issued for consulting contracts | - | - | 7,102 | - | 887,439 | |||||||||||||||
Cash portion of consulting contracts | - | - | - | - | - | |||||||||||||||
Amortization of deferred expenses: | ||||||||||||||||||||
Non-cash portion | - | - | - | - | - | |||||||||||||||
Cash portion | - | - | - | - | - | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Sold | - | - | 3,100 | - | 263,500 | |||||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2009 | 100,000 | $ | 1 | 44,777 | $ | 1 | $ | 2,879,689 |
(Continued)
See accompanying notes to condensed consolidated financial statements.
F-3 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Statements of Consolidated Stockholders’ Deficit, continued
Inception of Development Stage, July 22, 2005, through May 31, 2014
Deficit | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
During | ||||||||||||||||||||||||
Subscription | Deferred | Accumulated | Development | Treasury | ||||||||||||||||||||
Receivable | Expenses | Deficit | Stage | Stock | Total | |||||||||||||||||||
Inception, July 22, 2005 | - | - | (28,995 | ) | - | - | (6,510 | ) | ||||||||||||||||
Sale of common stock for cash | - | - | - | - | - | 32,000 | ||||||||||||||||||
Common stock issued for real estate investment | - | - | - | - | - | 190,000 | ||||||||||||||||||
Contribution to capital | - | - | - | - | - | 6,560 | ||||||||||||||||||
Net loss | - | - | - | (7,739 | ) | - | (7,739 | ) | ||||||||||||||||
Balance, August 31, 2005 | - | - | (28,995 | ) | (7,739 | ) | - | 214,311 | ||||||||||||||||
Sale of common stock for cash | - | - | - | - | - | 120,500 | ||||||||||||||||||
Net loss | - | - | - | (80,825 | ) | - | (80,825 | ) | ||||||||||||||||
Balance, August 31, 2006 | - | - | (28,995 | ) | (88,564 | ) | - | 253,986 | ||||||||||||||||
Sale of common stock | (81,590 | ) | - | - | - | - | 80,070 | |||||||||||||||||
Net loss | - | - | - | (95,813 | ) | - | (95,813 | ) | ||||||||||||||||
Balance, August 31, 2007 | (81,590 | ) | - | (28,995 | ) | (184,377 | ) | - | 238,243 | |||||||||||||||
Sale of preferred stock | - | - | - | - | - | 1,000 | ||||||||||||||||||
Sale of common stock | - | - | - | - | - | 413,172 | ||||||||||||||||||
Common stock issued for consulting contracts | - | (977,775 | ) | - | - | - | - | |||||||||||||||||
Cash portion of consulting contracts | - | (85,000 | ) | - | - | - | (85,000 | ) | ||||||||||||||||
Rescission of real estate purchase | - | - | - | - | - | (200,000 | ) | |||||||||||||||||
Amortization of deferred expenses: | ||||||||||||||||||||||||
Non-cash portion | - | 338,547 | - | - | - | 338,547 | ||||||||||||||||||
Cash portion | - | 43,529 | - | - | - | 43,529 | ||||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Payments received | 13,400 | - | - | - | - | 13,400 | ||||||||||||||||||
Interest accrued | (3,902 | ) | - | - | - | - | (3,902 | ) | ||||||||||||||||
Net loss | - | - | - | (467,712 | ) | - | (467,712 | ) | ||||||||||||||||
Balance, August 31, 2008 | (72,092 | ) | (680,699 | ) | (28,995 | ) | (652,089 | ) | - | 291,277 | ||||||||||||||
Sale of common stock for cash | - | - | - | - | - | 3,600 | ||||||||||||||||||
Common stock issued for consulting contracts | - | (887,439 | ) | - | - | - | - | |||||||||||||||||
Cash portion of consulting contracts | - | (40,901 | ) | - | - | - | (40,901 | ) | ||||||||||||||||
Amortization of deferred expenses: | ||||||||||||||||||||||||
Non-cash portion | - | 1,252,861 | - | - | - | 1,252,861 | ||||||||||||||||||
Cash portion | - | 82,371 | - | - | - | 82,371 | ||||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Sold | (77,500 | ) | - | - | - | - | 186,000 | |||||||||||||||||
Payments received | 1,168 | - | - | - | - | 1,168 | ||||||||||||||||||
Interest accrued | (3,545 | ) | - | - | - | - | (3,545 | ) | ||||||||||||||||
Net loss | - | - | - | (1,723,711 | ) | - | (1,723,711 | ) | ||||||||||||||||
Balance, August 31, 2009 | $ | (151,969 | ) | $ | (273,807 | ) | $ | (28,995 | ) | $ | (2,375,800 | ) | $ | - | $ | 49,120 |
(Continued)
See accompanying notes to condensed consolidated financial statements.
F-4 |
ROYAL ENERGY RESOURCES, INC.
(Development Stage Company)
Statements of Stockholders’ Deficit, continued
Inception of Development Stage, July 22, 2005, through May 31, 2014
Additional | ||||||||||||||||||||
Preferred stock | Common stock | Paid-in | ||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | ||||||||||||||||
Balance, August 31, 2009 | 100,000 | $ | 1 | 44,777 | $ | 1 | $ | 2,879,689 | ||||||||||||
Common stock issued for: | ||||||||||||||||||||
Consulting contracts | - | - | 5,050 | - | 81,500 | |||||||||||||||
Drilling program participation | - | - | 200 | - | 6,000 | |||||||||||||||
Loan extension | - | - | 1,400 | - | 14,000 | |||||||||||||||
Amortization of prepaid Consulting contracts | - | - | - | - | - | |||||||||||||||
Beneficial conversion feature of convertible debt | - | - | - | - | 2,100 | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Sold | - | - | 28,000 | - | 285,000 | |||||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2010 | 100,000 | 1 | 79,427 | 1 | 3,268,289 | |||||||||||||||
Amortization of deferred expenses | - | - | - | - | - | |||||||||||||||
Common stock issued for: | ||||||||||||||||||||
Consulting contracts | - | - | 4,000 | - | 20,000 | |||||||||||||||
Loan and extension fee | - | - | 10,800 | - | 178,500 | |||||||||||||||
Beneficial conversion feature of convertible debt | - | - | - | - | 9,000 | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Sold | - | - | 86,000 | 1 | 171,999 | |||||||||||||||
Cancelled | - | - | (8,500 | ) | - | (147,336 | ) | |||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Common stock cancelled for rescinded drilling program | - | - | (200 | ) | - | - | ||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August, 31, 2011 | 100,000 | 1 | 171,527 | 2 | 3,500,452 | |||||||||||||||
Amortization of deferred expenses | - | - | - | - | - | |||||||||||||||
Common stock issued for: | ||||||||||||||||||||
Cash | - | - | 6,000 | - | 7,500 | |||||||||||||||
Consulting contracts | - | - | 2,000 | - | 2,500 | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2012 | 100,000 | 1 | 179,527 | 2 | 3,510,452 | |||||||||||||||
Amortization of deferred expenses | - | - | - | - | - | |||||||||||||||
Amortization of option cost | - | - | - | - | 2,389 | |||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||
Payments received | - | - | - | - | - | |||||||||||||||
Interest accrued | - | - | - | - | - | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, August 31, 2013 | 100,000 | 1 | 179,527 | 2 | 3,512,841 | |||||||||||||||
Amortization of option cost | - | - | - | - | 69,574 | |||||||||||||||
Common stock for consulting contract | - | - | 800,000 | 8 | 3,992 | |||||||||||||||
Common stock for liabilities | - | - | 6,975,082 | 70 | 121,055 | |||||||||||||||
Common stock for loan principal | - | - | 2,150,000 | 21 | 31,729 | |||||||||||||||
Net loss | - | - | - | - | - | |||||||||||||||
Balance, May 31, 2014 | 100,000 | $ | 1 | 10,104,609 | $ | 101 | $ | 3,739,191 |
(Continued)
See accompanying notes to condensed consolidated financial statements.
F-5 |
ROYAL ENERGY RESOURCES, INC.
(Development Stage Company)
Statements of Stockholders’ Deficit, continued
Inception of Development Stage, July 22, 2005, through May 31, 2014
Deficit | ||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
During | ||||||||||||||||||||||||
Subscription | Deferred | Accumulated | Development | Treasury | ||||||||||||||||||||
Receivable | Expenses | Deficit | Stage | Stock | Total | |||||||||||||||||||
Balance, August 31, 2009 | $ | (151,969 | ) | $ | (273,807 | ) | $ | (28,995 | ) | $ | (2,375,800 | ) | $ | - | $ | 49,120 | ||||||||
Common stock issued for: | ||||||||||||||||||||||||
Consulting contracts | - | (81,500 | ) | - | - | - | - | |||||||||||||||||
Drilling program participation | - | - | - | - | - | 6,000 | ||||||||||||||||||
Loan extension | - | - | - | - | - | 14,000 | ||||||||||||||||||
Amortization of prepaid consulting contracts: | - | 326,498 | - | - | - | 326,498 | ||||||||||||||||||
Beneficial conversion feature of convertible debt | - | - | - | - | - | 2,100 | ||||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Sold | (285,000 | ) | - | - | - | - | - | |||||||||||||||||
Payments received | 21,239 | - | - | - | - | 21,239 | ||||||||||||||||||
Interest accrued | (6,610 | ) | - | - | - | - | (6,610 | ) | ||||||||||||||||
Net loss | - | - | - | (501,055 | ) | - | (501,055 | ) | ||||||||||||||||
Balance, August 31, 2010 | (422,340 | ) | (28,809 | ) | (28,995 | ) | (2,876,855 | ) | - | (88,708 | ) | |||||||||||||
Amortization of deferred expenses | - | 152,809 | - | - | - | 152,809 | ||||||||||||||||||
Common stock issued for: | ||||||||||||||||||||||||
Consulting contracts | - | (20,000 | ) | - | - | - | - | |||||||||||||||||
Loan and extension fee | - | (156,000 | ) | - | - | - | 22,500 | |||||||||||||||||
Beneficial conversion feature of convertible debt | - | - | - | - | - | 9,000 | ||||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Sold | (172,000 | ) | - | - | - | - | - | |||||||||||||||||
Cancelled | 147,336 | - | - | - | - | - | ||||||||||||||||||
Payments received | 58,477 | - | - | - | - | 58,477 | ||||||||||||||||||
Interest accrued | (8,727 | ) | - | - | - | - | (8,727 | ) | ||||||||||||||||
Common stock cancelled for rescinded drilling program | - | - | - | - | - | - | ||||||||||||||||||
Net loss | - | - | - | (270,417 | ) | - | (270,417 | ) | ||||||||||||||||
Balance, August, 31, 2011 | (397,254 | ) | (52,000 | ) | (28,995 | ) | (3,147,272 | ) | - | (125,066 | ) | |||||||||||||
Amortization of deferred expenses | - | 52,536 | - | - | - | 52,536 | ||||||||||||||||||
Common stock issued for: | ||||||||||||||||||||||||
Cash | - | - | - | - | - | 7,500 | ||||||||||||||||||
Consulting contract | - | (2,500 | ) | - | - | - | - | |||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Payments received | 23,650 | - | - | - | - | 23,650 | ||||||||||||||||||
Interest accrued | (6,252 | ) | - | - | - | - | (6,252 | ) | ||||||||||||||||
Net loss | - | - | - | (126,252 | ) | - | (126,252 | ) | ||||||||||||||||
Balance, August 31, 2012 | (379,856 | ) | (1,964 | ) | (28,995 | ) | (3,273,524 | ) | - | (173,884 | ) | |||||||||||||
Amortization of deferred expenses | - | 1,964 | - | - | - | 1,964 | ||||||||||||||||||
Amortization of option cost | - | - | - | - | - | 2,389 | ||||||||||||||||||
Stock subscription receivable: | ||||||||||||||||||||||||
Payments received | 384,360 | - | - | - | - | 384,360 | ||||||||||||||||||
Interest accrued | (4,504 | ) | - | - | - | - | (4,504 | ) | ||||||||||||||||
Net loss | - | - | - | (388,957 | ) | - | (388,957 | ) | ||||||||||||||||
Balance, August 31, 2013 | - | - | (28,995 | ) | (3,662,481 | ) | - | (178,632 | ) | |||||||||||||||
Amortization of option cost | - | - | - | - | - | 69,574 | ||||||||||||||||||
Common stock for consulting contract | - | - | - | - | - | 4,000 | ||||||||||||||||||
Common stock for liabilities | - | - | - | - | - | 121,125 | ||||||||||||||||||
Common stock for loan principal | - | - | - | - | 31,750 | |||||||||||||||||||
Acquire treasury stock | - | - | - | - | (2,597 | ) | (2,597 | ) | ||||||||||||||||
Net loss | - | - | - | (202,770 | ) | - | (202,770 | ) | ||||||||||||||||
Balance, May 31, 2014 | $ | - | $ | - | $ | (28,995 | ) | $ | (3,865,251 | ) | $ | (2,597 | ) | $ | (157,550 | ) |
See accompanying notes to condensed consolidated financial statements.
F-6 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Condensed Consolidated Statements of Cash Flows
Nine Months Ended May 31, 2014 and 2013 and
from inception (July 22, 2005) through May 31, 2014
(Unaudited)
From inception | ||||||||||||
July 22, 2005 | ||||||||||||
Nine months ended | through | |||||||||||
May 31, | May 31, | |||||||||||
2014 | 2013 | 2014 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net loss | $ | (202,770 | ) | $ | (375,546 | ) | $ | (3,865,251 | ) | |||
Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and depletion | - | - | 2,148 | |||||||||
Value of common shares issued for services | 4,000 | - | 2,235,201 | |||||||||
Amortization of stock option cost | 69,574 | - | 71,963 | |||||||||
Loss on rescission of condominium purchase | - | - | 15,000 | |||||||||
Interest accrued on stock subscription | - | (4,504 | ) | (33,540 | ) | |||||||
Asset impairment | - | 4,329 | 79,493 | |||||||||
Loan extension paid with common stock | 20,625 | - | 138,625 | |||||||||
Beneficial conversion feature of convertible notes | - | - | 11,100 | |||||||||
Bad debt expense | - | - | 9,619 | |||||||||
Accrued officer compensation | - | 320,000 | 320,000 | |||||||||
Change in other assets and liabilities: | ||||||||||||
Accounts receivable | - | - | 1,133 | |||||||||
Prepaid expenses and other assets | - | 1,964 | 52,991 | |||||||||
Accounts payable and accrued expenses | 73,389 | 12,731 | 138,899 | |||||||||
Net cash used in operations | (35,182 | ) | (41,026 | ) | (822,619 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Investment in real estate | - | - | (11,000 | ) | ||||||||
Oil and gas property expenditures | - | - | (160,977 | ) | ||||||||
Proceeds from sale of undeveloped leasehold | - | - | 87,275 | |||||||||
Proceeds from sale of oil and gas properties | - | - | 6,500 | |||||||||
Purchase of treasury stock | (2,597 | ) | - | (2,597 | ) | |||||||
Investment in rare earth and precious metals property | (2,140 | ) | (2,140 | ) | (18,573 | ) | ||||||
Net cash used in investing activities | (4,737 | ) | (2,140 | ) | (99,372 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds of stockholder loans | 1,000 | - | 9,182 | |||||||||
Proceeds from subscription receivable | - | 19,420 | 137,339 | |||||||||
Loan proceeds | 75,000 | 149,000 | 388,000 | |||||||||
Loan repayment | (51,800 | ) | (32,400 | ) | (253,550 | ) | ||||||
Proceeds from sale of common stock | - | - | 656,842 | |||||||||
Proceeds from sale of preferred stock | - | - | 1,000 | |||||||||
Net cash provided by financing activities | 24,200 | 136,020 | 938,813 | |||||||||
Net increase (decrease) in cash and cash equivalents | (15,719 | ) | 92,854 | 16,822 | ||||||||
Cash, beginning of period | 32,541 | 18,386 | - | |||||||||
Cash, end of period | $ | 16,822 | $ | 111,240 | $ | 16,822 |
(Continued)
See accompanying notes to condensed consolidated financial statements.
F-7 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Company)
Condensed Consolidated Statements of Cash Flows, Continued
Nine Months Ended May 31, 2014 and 2013, and
from inception (July 22, 2005) through May 31, 2014
(Unaudited)
From inception | ||||||||||||
July 22, 2005 | ||||||||||||
Nine months ended | through | |||||||||||
May 31, | May 31, | |||||||||||
2014 | 2013 | 2014 | ||||||||||
Supplemental cash flow information | ||||||||||||
Cash paid for interest | $ | - | $ | - | $ | 32,681 | ||||||
Cash paid for income taxes | - | - | - | |||||||||
Non-cash investing and financing activities: | ||||||||||||
Issuance of common stock for real estate | $ | - | $ | - | $ | 190,000 | ||||||
Contribution of stockholder loan to capital | - | - | 6,560 | |||||||||
Disposition of real estate per stock rescission agreement | - | - | 200,000 | |||||||||
Common stock issued for participation in drilling program | - | - | 6,000 | |||||||||
Common stock issued for stock subscription receivables | - | - | 615,922 | |||||||||
Accounts receivable exchanged for accounts payable | - | - | 14,578 | |||||||||
Drilling prepayment transferred to accounts receivable | - | - | 28,079 | |||||||||
Common stock cancelled for rescinded drilling program | - | - | 1,000 | |||||||||
Common stock and stock subscription receivables cancelled | - | - | 147,336 | |||||||||
Stock subscription receivable paid to reduce convertible note payable | - | 65,600 | 80,000 | |||||||||
Accounts payable exchanged for convertible notes payable | - | - | 49,400 | |||||||||
Accrued officers compensation applied to pay stock subscriptions receivable | - | 299,340 | 299,340 | |||||||||
Common stock issued in exchange for note principal payment | 31,750 | - | 31,750 | |||||||||
Common stock issued in exchange for loan to principal shareholder | 100,500 | - | 100,500 | |||||||||
Common stock issued in exchange for loan extension fees | 20,625 | - | 20,625 |
See accompanying notes to condensed consolidated financial statements.
F-8 |
ROYAL ENERGY RESOURCES, INC. AND SUBSIDIARY
(Development Stage Companies)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2014
(Unaudited)
1 | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Royal Energy Resources, Inc. (“RER”) and its wholly owned subsidiary S.C. Golden Carpathan Resources S.R.L. (“SCGCR”), a Romanian corporation. RER and SCGCR are development stage enterprises within the meaning of Financial Accounting Standards Board Topic 915. All significant intercompany balances and transactions have been eliminated in consolidation. SCGCR has not had any operations as of May 31, 2014.
The condensed consolidated financial statements included in this report have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting and include all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation. These condensed consolidated financial statements have not been audited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations for interim reporting. The Company believes that the disclosures contained herein are adequate to make the information presented not misleading. However, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report for the year ended August 31, 2013 filed with the SEC on November 25, 2013.
The results of operations for the three and nine months ended May 31, 2014 are not necessarily indicative of the results to be expected for the entire year.
Organization and nature of business
RER is a Delaware corporation which was incorporated on March 22, 1999, under the name Webmarketing, Inc. (“Webmarketing”). On July 7, 2004, the Company revived its charter and changed its name from Webmarketing to World Marketing, Inc. In December 2007 the Company changed its name to Royal Energy Resources, Inc.
The Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania and mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties.
Stock-based compensation
The Company measures compensation expense for its non-employee stock-based compensation under FASB ASC 718. The fair value of the stock issued is used to measure the transaction as this is more reliable than the fair value of the services received. Fair value is measured as the value of the Company’s common stock on the date that the commitment for performance of services has been reached or when the performance is complete. The fair value of the equity instrument is charged directly to compensation expense.
F-9 |
2 | GOING CONCERN |
The Company has not established sources of revenues sufficient to fund the development of business, projected operating expenses and commitments for the next year. The Company, which has been in the development stage since its initial incorporation, March 22, 1999, has accumulated a net loss of $3,894,246 ($28,995 in a prior development stage) through May 31, 2014, and incurred a loss of $202,770 for the nine months then ended.
The Company is currently attempting to secure financing in Europe. There can be no assurance that the Company will be able to complete this financing.
Investments in the Company’s common stock involve a high degree of risk and could result in a total loss of the investment.
3 | INVESTMENT IN MINING PROPERTIES |
At May 31, 2014 and August 31, 2013, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook County, Wyoming.
4 | ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
Accounts payable and accrued expenses consist of the following as of May 31, 2014 and August 31, 2013.
May 31, 2014 | August 31, 2013 | |||||||
Trade accounts payable | $ | 24,715 | $ | 22,930 | ||||
Consulting fees payable | 30,000 | 71,550 | ||||||
Accrued expenses | 42,500 | 1,635 | ||||||
Accrued interest | 2,715 | 1,976 | ||||||
$ | 99,930 | $ | 98,091 |
Accrued expenses are payable in common stock.
F-10 |
5 | NOTES PAYABLE |
Notes payable consist of the following at May 31, 2014 and August 31, 2013.
May 31, 2014 | August 31, 2013 | |||||||
Convertible note payable dated September 1, 2011; due October 1, 2011; interest at 2% per annum; convertible into common stock at $0.001 per share (limited to 9.99% of total shares issued and outstanding); past due | $ | 29,900 | $ | 29,900 | ||||
Convertible note payable dated September 1, 2011; due October 1, 2011; interest at 2% per annum; convertible into common stock at $0.001 per share (limited to 9.99% of total shares issued and outstanding); past due | 19,500 | 19,500 | ||||||
Note payable; non-interest bearing; due on demand | 37,100 | 45,650 | ||||||
$ | 86,500 | $ | 95,050 |
The two convertible notes dated September 1, 2011 were both subject to an agreement that they were convertible into shares of the Company’s common stock at a conversion price to be reasonably agreed upon by the parties. The parties agreed to the $0.001 conversion price effective October 1, 2013.
The demand note payable was memorialized on October 11, 2013. The Company issued 275,000 shares of its common stock, restricted pursuant to Section 144, to the holder of the note in exchange for his agreement to not call the note before December 31, 2013. The value of the shares of $20,625 was based on the trading price of the stock on the date of the agreement. The shares were issued in February 2014.
6 | STOCKHOLDERS’ EQUITY |
Common stock
At May 31, 2014 and August 31, 2013, 500,000,000 common shares with a par value of $0.00001 were authorized. At May 31, 2014, 10,104,609 and 179,527 shares were issued and 10,100,317 and 179,527 shares were outstanding, respectively.
Series A preferred stock
In November 2007, the Company amended its charter to authorize issuance of up to 10,000,000 shares of its $0.00001 preferred stock. The amendment became effective on December 12, 2007, upon filing with the Delaware secretary of state. In December 2007 the Company issued 100,000 shares of its Series A preferred stock to its President and Chief Executive Officer for $1,000. The certificate of designation of the Series A preferred stock provides: the holders of Series A preferred stock shall be entitled to receive dividends when, as and if declared by the board of directors of the Company; participates with common stock upon liquidation; convertible into one share of common stock; and has voting rights such that the Series A preferred stock shall have an aggregate voting right for 54% of the total shares entitled to vote.
F-11 |
Reverse stock split and increase in authorized shares
On August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October 1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the change took place before the date of the earliest transaction reported.
Common shares issued
In January 2014, the Company issued 6,700,000 common shares to its CEO in exchange for $100,500 owed to him.
In February 2014, the Company issued 275,000 common shares valued at $20,625 as a loan extension fee and issued 300,000 common shares in exchange for a reduction in a note payable in the amount of $22,500.
In March 2014, the Company entered into an agreement with a consultant that provided 800,000 common shares would be issued to the consultant as a portion of the consulting fees to be paid. The shares were issued in April 2014.
In April 2014, the Company issued 1,500,000 common shares to its CEO in exchange for $7,500 owed to him.
In April 2014, the Company issued 350,000 common shares to a note holder in exchange for a $1,750 principal reduction in the note payable to him.
Stock option plan
The Royal Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on June 27, 2008 and reserves 8,000 shares for Awards under the Plan, of which up to 6,000 may be designated as Incentive Stock Options. The Company’s Compensation Committee is designated to administer the Plan at the direction of the Board of Directors. No options are outstanding under the Plan at May 31, 2014.
Stock option
On August 23, 2013, the Company issued a stock option, to acquire 750,000 shares of its common stock at $0.07 per share until December 31, 2014, to a Romanian consultant as a part of his consulting agreement. The value of the option of $126,963 was calculated using the Black-Scholes Valuation Model and is being amortized over the life of the option.
Cumulative amortization at August 31, 2013 | $ | 2,389 | ||
Amortization in nine months ended May 31, 2014 | 69,574 | |||
Cumulative amortization at May 31, 2014 | 71,963 | |||
Unamortized balance | 55,000 | |||
Total value of option | $ | 126,963 |
Consulting and financial services agreements
The Company has entered into various consulting and financial services agreements. The cost associated with the agreements is being amortized over the period of the agreements.
Treasury stock
During the three months ended May 31, 2014, the Company acquired 4,292 shares of its common stock for the aggregate cost of $2,597.
F-12 |
7 | RELATED PARTY TRANSACTIONS |
The President and Chief Executive Officer of the Company was paid approximately $550 for office and travel expense reimbursements during the nine month period ended May 31, 2013 and none in the period ended May 31, 2014.
The President and Chief Executive Officer of the Company is owed a total of $842 at May 31, 2014 and $28,792 at August 31, 2013. In January 2014, the Company issued 6,700,000 common shares to the President and Chief Executive Officer in exchange for $100,500 owed to him at that time. In April 2014, the Company issued 1,500,000 common shares to the President and Chief Executive Officer in exchange for $7,500 owed to him.
F-13 |
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
This statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including the matters set forth in this statement.
At the present time we have only nominal overhead costs. Our officers do not receive any payroll and our administrative assistance is now being provided on a reimbursement basis. This situation will remain constant until such time as we have sufficient capital to afford to pay salaries.
We have access to nominal capital. An investment in our securities represents a high degree of risk.
MINING - The Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania and mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties. At May 31, 2014 and August 31, 2013, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook County, Wyoming. The rare earth and precious metals leases are approximately 5-15 miles from Bear Lodge Mountain near Sundance, Wyoming. The U.S. Geological Survey has studied Bear Lodge Mountain extensively (USGS Prof. paper #1049-D) and has estimated it contains one of the largest deposits of disseminated rare earth elements in North America.
UNDEVELOPED LEASEHOLD NOT BEING AMORTIZED - The Company has been the successful bidder in United States Government auctions to purchase certain oil and gas lease rights. At May 31, 2014 and August 31, 2013, the Company had sold all of its remaining mineral leases and retained a 1% overriding royalty interest in the majority of the properties. As of May 31, 2014, the Company had collected approximately $89,000 from sales of leases and royalty interests. The Company is negotiating with energy companies to develop the potential resources that may be contained in these properties.
Liquidity, Capital Resources and Going Concern
Historical information - The Company has not established sources of revenues sufficient to fund the development of business, projected operating expenses and commitments for the next year. The Company, which has been in the development stage since its inception, March 22, 1999, has accumulated a net loss of $3,894,246 ($28,995 in a prior development stage) through May 31, 2014, and incurred a loss of $202,770 for the nine months then ended.
The Company is currently attempting to secure financing in Europe. There can be no assurance that the Company will be able to complete this financing.
In March 2006, the Company sold 1,300 shares of its common stock for $65,000 to provide a portion of the cash required to purchase its first real estate investment. Subsequently, the Company continued to sell its common stock to raise capital to continue operations. During 2008, the Company revised its business plan, rescinded its real estate purchase and began investing in mining and energy leases and oil and gas drilling prospects. However, the mining and energy businesses have a high degree of risk and there can be no assurance that the Company will be able to obtain sufficient funding to develop the Company’s current business plan.
Investments in the Company’s common stock involve a high degree of risk and could result in a total loss of the investment.
Evaluation of the amounts and certainty of cash flows – Currently the Company has no revenue and relies on its CEO and loans to fund operations. There can be no assurance that the CEO will be able to continue to fund operations or obtain loans.
Cash requirements and capital expenditures – The Company has not had any recent capital expenditures.
3 |
Known trends and uncertainties – The Company is involved to a very limited degree in a very competitive business. The uncertainty of the economy has increased the difficulty of raising funds to support the current planned mining and energy business.
What balance sheet, income or cash flow items should be considered in assessing liquidity – We will continue to seek funding to finance our planned mining and energy developments, which if successful could materially impact the current capital structure.
Our prospective sources for and uses of cash – The Company is seeking financing to be used to continue its mining development plans. There can be no assurance that the Company will be successful.
COMPARISON OF THREE MONTHS ENDED MAY 31, 2014 AND 2013
We had no revenue during the three months ended May 31, 2014 or 2013.
During the three-month period in 2014, selling, general and administrative expenses amounted to $66,072 as compared to $324,489 in the year earlier period. In the 2014 period, consulting fees were $57,645 higher and accounting and audit review costs were $3,415 higher. In the 2013 period, the Company recorded $320,000 in officer compensation for prior year services.
During the three-month period in 2014, we recorded $249 in interest expense and $13,374 in losses from commodity trading. During the three-month period in 2013, we recorded interest expense of $249, interest income in the amount of $1,479 from related parties, and $12,386 in income from debt forgiven.
COMPARISON OF NINE MONTHS ENDED MAY 31, 2014 AND 2013
We had no revenue during the nine months ended May 31, 2014 or 2013.
During the nine-month period in 2014, selling, general and administrative expenses amounted to $172,690 as compared to $382,490 in the year earlier period. In the 2014 period, consulting fees were $102,830 higher. In the 2013 period, the Company recorded $320,000 in officer compensation for prior year services.
During the nine-month period ended May 31, 2014 and 2013, the Company had the following other expense (income) items.
2014 | 2013 | |||||||
Interest expense | $ | 21,363 | $ | 5,617 | ||||
Interest income - related party | - | (4,505 | ) | |||||
Loss on commodity trading | 8,817 | - | ||||||
Debt forgiven | - | (12,386 | ) | |||||
Other income | (100 | ) | - | |||||
$ | 30,080 | $ | (11,274 | ) |
Interest expense in the 2014 period includes a loan extension fee of $20,625 which was paid in common stock.
OFF-BALANCE SHEET ARRANGEMENTS
None.
4 |
Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
Item 4T: Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Under the PCAOB standards, a control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit the attention by those responsible for oversight of the company’s financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable pssibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of May 31, 2014. Our management has determined that, as of the date of this report, the Company’s disclosure controls and procedures are not effective for reasons disclosed in the Form 10-K dated August 31, 2013.
(b) Changes in Internal Controls
There have been no changes in internal controls over financial reporting or in other factors that could significantly affect these controls that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during the quarter ended May 31, 2014, including any corrective actions ith regard to significant deficiencies and material weaknesses.
5 |
None
Not applicable.
Item 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On April 1, 2014, the board of directors of the Company approved issuing 1,500,000 shares of its common stock to Jacob Roth, president and chief executive officer, in exchange for $7,500 owed to Mr. Roth. In April 2014, the Company issued 800,000 common shares to a consultant pursuant to a consulting agreement. In April 2014, the Company issued 350,000 common shares to a note holder in exchange for a $1,750 principal reduction in the note owed to him.
The shares were sold pursuant to an exemption from registration under Section 4(2) promulated under the Securities Act of 1933, as amended.
Item 3: Defaults upon Senior Securities.
None
Item 4: Submission of Matters to a Vote of Security Holders.
None
None
Exhibit 31.1* | Certification pursuant to 18 U.S.C. Section 1350 | ||
Section 302 of the Sarbanes-Oxley Act of 2002 | |||
Exhibit 32.1* | Certification pursuant to 18 U.S.C. Section 1350 | ||
Section 906 of the Sarbanes-Oxley Act of 2002 | |||
101.INS** | XBRL Instance Document | ||
101.SCH** | XBRL Taxonomy Extension Schema Document | ||
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
*Filed herewith.
**In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.
6 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant ha duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 15, 2014
Royal Energy Resources, Inc. | ||
By: | /s/ Jacob Roth | |
Jacob Roth | ||
President, CEO and CFO |
7 |