UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2014
Commission File Number: 001-28980
Royal Standard Minerals Inc.
(Translation of registrant's name into English)
36 Toronto Street
Suite 1000
Toronto, Ontario
M5C 2C5
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ x ] Form 20-F [ ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
SUBMITTED HEREWITH
Exhibits
SIGNATURES
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, thereunto duly authorized.
|
ROYAL STANDARD MINERALS INC. |
|
(Registrant) |
|
|
|
Date: September 24, 2014 |
By: |
/s/ Daniel Crandall |
|
|
|
|
|
Daniel Crandall |
|
Title: |
Chief Financial Officer |
|
Royal Standard Minerals Inc. |
|
(Expressed in United States Dollars) |
|
Condensed Interim Consolidated Financial
Statements |
|
July 31, 2014 |
|
(Unaudited) |
|
Notice to Reader
The accompanying unaudited condensed interim consolidated
financial statements of Royal Standard Minerals Inc. (the "Company") have been
prepared by and are the responsibility of management. The unaudited condensed
interim consolidated financial statements have not been reviewed by the
Company's auditors.
Royal Standard Minerals Inc.
|
Condensed Interim Consolidated Statements of Financial
Position |
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
As at |
|
|
As at |
|
|
|
July 31, |
|
|
January 31, |
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
11,173 |
|
$ |
16,807 |
|
Sundry receivables and prepaids
(Note 3) |
|
1,337 |
|
|
5,553 |
|
Total assets |
$ |
12,510 |
|
$ |
22,360 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable and accrued liabilities (Note 5) |
$ |
56,201 |
|
$ |
35,917 |
|
Due to shareholder (Note 9) |
|
9,917 |
|
|
- |
|
Total liabilities |
|
66,118 |
|
|
35,917 |
|
Shareholders' Deficiency |
|
|
|
|
|
|
Share capital (Note 6
(b)) |
|
28,273,230 |
|
|
28,273,230 |
|
Reserves |
|
10,900,438 |
|
|
10,900,438 |
|
Accumulated deficit
|
|
(39,233,766 |
)
|
|
(39,193,127 |
) |
Accumulated other comprehensive income |
|
6,490 |
|
|
5,902 |
|
Total shareholder's deficiency |
|
(53,608 |
) |
|
(13,557 |
) |
Total liabilities and shareholders' deficiency |
$ |
12,510 |
|
$ |
22,360 |
|
The Company and Operations and Going Concern (Note
1)
Contingencies (Note 10)
Approved by the Board: |
|
|
|
|
"Carmelo Marrelli" |
|
"George Duguay" |
|
Director |
|
Director
|
|
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
-1-
Royal Standard Minerals Inc.
|
Condensed Interim Consolidated Statements of Operations
|
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
Three
Months Ended |
|
|
Six Months
Ended |
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and
evaluation expenditures (Note 4) |
$ |
- |
|
$ |
71,187 |
|
$ |
- |
|
$ |
103,649 |
|
General and administrative (Note 11) |
|
11,700 |
|
|
(56,511 |
) |
|
40,639 |
|
|
85,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,700 |
|
|
14,676 |
|
|
40,639 |
|
|
189,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(11,700 |
) |
|
(14,676 |
) |
|
(40,639 |
) |
|
(189,202 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
- |
|
|
- |
|
|
- |
|
|
9,343 |
|
Impairment of
marketable securities |
|
-
|
|
|
(29,999 |
) |
|
-
|
|
|
(29,999 |
) |
Foreign currency translation adjustment |
|
- |
|
|
(4,810 |
) |
|
- |
|
|
(32,049 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(11,700 |
) |
$ |
(49,485 |
) |
$ |
(40,639 |
) |
$ |
(241,907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share
(Note 8) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
Diluted loss per share (Note 8) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
- 2 -
Royal Standard Minerals Inc.
|
Condensed Interim Consolidated Statements of
Comprehensive Loss |
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
Three
Months Ended |
|
|
Six Months
Ended |
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period |
$ |
(11,700 |
) |
$ |
(49,485 |
) |
$ |
(40,639 |
) |
$ |
(241,907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Items that will be reclassified
subsequently to income |
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized loss on
available-for-sale marketable securities |
|
-
|
|
|
(14,000 |
) |
|
-
|
|
|
- |
|
Items that will not be reclassified
subsequently to income |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation |
|
181 |
|
|
- |
|
|
588 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss for the period |
$ |
(11,519 |
) |
$ |
(63,485 |
) |
$ |
(40,051 |
) |
$ |
(241,907 |
) |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
- 3 -
Royal Standard Minerals Inc.
|
Condensed Interim Consolidated Statements of Changes in
Shareholders' Deficiency |
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
Share |
|
|
|
|
|
Accumulated |
|
|
Comprehensive |
|
|
|
|
|
|
Capital |
|
|
Reserves |
|
|
Deficit |
|
|
Income |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31,
2013 |
$ |
28,104,264 |
|
$ |
11,010,304 |
|
$ |
(39,262,352 |
) |
$ |
-
|
|
$ |
(147,784 |
) |
Share-based payments |
|
- |
|
|
(1,471 |
) |
|
- |
|
|
- |
|
|
(1,471 |
) |
Net loss for the period |
|
- |
|
|
- |
|
|
(241,907 |
) |
|
- |
|
|
(241,907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 31, 2013 |
$ |
28,104,264 |
|
$ |
11,008,833 |
|
$ |
(39,504,259 |
) |
$ |
- |
|
$ |
(391,162 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2014 |
$ |
28,273,230 |
|
$ |
10,900,438 |
|
$ |
(39,193,127 |
) |
$ |
5,902 |
|
$ |
(13,557 |
) |
Foreign currency
translation |
|
- |
|
|
- |
|
|
- |
|
|
588 |
|
|
588 |
|
Net loss for the period |
|
- |
|
|
- |
|
|
(40,639 |
) |
|
- |
|
|
(40,639 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 31, 2014 |
$ |
28,273,230 |
|
$ |
10,900,438 |
|
$ |
(39,233,766 |
) |
$ |
6,490 |
|
$ |
(53,608 |
) |
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
- 4 -
Royal Standard Minerals Inc.
|
Condensed Interim Consolidated Statements of Cash Flows
|
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
Six Months
Ended |
|
|
|
July 31,
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
Net loss for the
period |
$ |
(40,639 |
) |
$ |
(241,907 |
) |
Operating items not involving cash:
|
|
|
|
|
|
|
Depreciation |
|
-
|
|
|
3,558 |
|
Accretion
in asset retirement obligations |
|
- |
|
|
5,209 |
|
Share-based payments |
|
-
|
|
|
(1,471 |
) |
Impairment
of marketable securities |
|
- |
|
|
29,999 |
|
Foreign exchange |
|
588
|
|
|
- |
|
Changes in non-cash working capital:
|
|
|
|
|
|
|
Sundry receivables and prepaids |
|
4,216
|
|
|
2,666,777
|
|
Accounts payable and accrued
liabilities |
|
20,284 |
|
|
(1,739,686 |
) |
|
|
|
|
|
|
|
Cash (used in) provided by operating activities |
|
(15,551 |
) |
|
722,479 |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Advances from
shareholder |
|
9,917
|
|
|
- |
|
Other repayments |
|
- |
|
|
(600,000 |
) |
|
|
|
|
|
|
|
Cash provided by (used in) financing activities |
|
9,917 |
|
|
(600,000 |
) |
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
(5,634 |
) |
|
122,479 |
|
Cash and cash equivalents, beginning of period |
|
16,807 |
|
|
201,565 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
$ |
11,173 |
|
$ |
324,044 |
|
The accompanying notes are an integral part of these unaudited
condensed interim consolidated financial statements.
- 5 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
1. |
The Company and Operations and Going
Concern |
Royal Standard Minerals Inc. is a
publicly held company focused on identifying suitable assets or businesses to
acquire or merge with, with a view to maximizing value for shareholders. The
Company was previously engaged in the acquisition, exploration and development
of gold and precious metal properties in the United States of America but has
disposed of these interests. The Company is continued under the Canada Business
Corporations Act and its common shares are quoted in the United States of
America on the Over-the-Counter ("OTC") Bulletin Board. Inception has been
deemed to be June 26, 1996, the date on which the Company acquired all of the
outstanding common shares of Southeastern Resources Inc. ("SRI"), which
acquisition was accounted for as a reverse takeover of the Company by SRI. The
Company's head office is located at 36 Toronto Street, Suite 1000, Toronto,
Ontario, M5C 2C5.
The unaudited condensed interim
consolidated financial statements were approved by the Board of Directors on
September 22, 2014.
These unaudited condensed interim
consolidated financial statements have been prepared on the basis of accounting
principles applicable to a going concern, which assume that the Company will
continue in operation for the foreseeable future and will be able to realize its
assets and discharge its liabilities in the normal course of operations as they
come due. In assessing whether the going concern assumption is appropriate,
management takes into account all available information about the future, which
is at least, but is not limited to, twelve months from the end of the reporting
period. Management is aware, in making its assessment, of material uncertainties
related to events or conditions that cast significant doubt upon the entity's
ability to continue as a going concern. The Company had a loss of $40,639 during
the six months ended July 31, 2014 (six months ended July 31, 2013 - loss of
$241,907), has an accumulated deficit of $39,233,766 (January 31, 2014 -
$39,193,127). In addition, the Company has a working capital deficiency of
$53,608 at July 31, 2014 (January 31, 2014 - working capital deficiency of
$13,557).
There is significant doubt regarding
the going concern assumption and, accordingly, the ultimate appropriateness of
the use of accounting principles applicable to a going concern. These unaudited
condensed interim consolidated financial statements do not reflect the
adjustments, to the carrying values or classifications of assets and liabilities
or to the reported expenses that would be necessary if the Company were unable
to realize its assets and settle its liabilities as a going concern in the
normal course of operations for the foreseeable future. These adjustments could
be material.
2. |
Significant Accounting
Policies |
Statement of compliance
The Company applies International
Financial Reporting Standards ("IFRS") as issued by the International Accounting
Standards Board (IASB) and interpretations issued by the IFRS Interpretations
Committee (IFRIC). These unaudited condensed interim consolidated financial
statements have been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting. Accordingly, they do not include all
of the information required for full annual financial statements required by
IFRS as issued by the IASB and interpretations issued by the IFRIC.
- 6 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
2. |
Significant Accounting Policies
(Continued) |
Statement of compliance
(continued)
The policies applied in these unaudited
condensed interim consolidated financial statements are based on IFRS issued and
outstanding as of September 22, 2014. The same accounting policies and methods
of computation are followed in these unaudited condensed interim consolidated
financial statements as compared with the most recent annual consolidated
financial statements as at and for the year ended January 31, 2014, except as
noted below. Any subsequent changes to IFRS that are given effect in the
Companys annual audited consolidated financial statements for the year ending
January 31, 2015 could result in restatement of these unaudited condensed
interim consolidated financial statements.
Adoption of new accounting
standards
IAS 32 Financial Instruments:
Presentation (IAS 32) was amended by the IASB in December 2011 to clarify
certain aspects of the requirements on offsetting. The amendments focus on the
criterion that an entity currently has a legally enforceable right to set off
the recognized amounts and the criterion that an entity intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
At February 1, 2014, the Company adopted this pronouncement and there was no
material impact on the Company's unaudited condensed interim consolidated
financial statements.
New standards not yet adopted and
interpretations issued but not yet effective
IFRS 9 Financial instruments (IFRS
9) was issued by the IASB in October 2010 and will replace IAS 39 - Financial
Instruments: Recognition and Measurement (IAS 39). IFRS 9 uses a single
approach to determine whether a financial asset is measured at amortized cost or
fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is
based on how an entity manages its financial instruments in the context of its
business model and the contractual cash flow characteristics of the financial
assets. Most of the requirements in IAS 39 for classification and measurement of
financial liabilities were carried forward unchanged to IFRS 9. The new standard
also requires a single impairment method to be used, replacing the multiple
impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning
on or after January 1, 2018. Earlier adoption is permitted.
3. |
Sundry Receivables and
Prepaids |
|
|
|
As at |
|
|
As at |
|
|
|
|
July 31, |
|
|
January 31, |
|
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Sales tax receivables
|
$ |
1,337 |
|
$ |
5,193 |
|
|
Prepaid expenses |
|
- |
|
|
360 |
|
|
|
|
|
|
|
|
|
|
|
$ |
1,337 |
|
$ |
5,553 |
|
- 7 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
4. |
Exploration and Evaluation Expenditures on Mineral
Properties |
During the three and six months ended
July 31, 2014 and 2013, the Company's exploration and evaluation expenditures
were as follows:
|
|
|
Three
Months Ended |
|
|
Six Months
Ended |
|
|
|
|
July 31,
|
|
|
July
31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fondaway Canyon and Dixie-Comstock Projects
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property acquisition
costs |
$ |
-
|
|
$ |
35,000 |
|
$ |
-
|
|
$ |
35,000 |
|
|
Consulting, wages and salaries |
|
- |
|
|
11,846 |
|
|
- |
|
|
38,461 |
|
|
Travel |
|
-
|
|
|
3,150 |
|
|
-
|
|
|
4,498 |
|
|
Office and general |
|
- |
|
|
1,084 |
|
|
- |
|
|
2,030 |
|
|
|
$ |
- |
|
$ |
51,080 |
|
$ |
- |
|
$ |
79,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kentucky Project |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office and general |
$ |
- |
|
$ |
18,328 |
|
$ |
- |
|
$ |
20,102 |
|
|
Depreciation |
|
- |
|
|
1,779 |
|
|
- |
|
|
3,558 |
|
|
|
$ |
- |
|
$ |
20,107 |
|
$ |
- |
|
$ |
23,660 |
|
|
Total exploration activities |
$ |
- |
|
$ |
71,187 |
|
$ |
- |
|
$ |
103,649 |
|
5. |
Accounts Payable and Accrued
Liabilities |
|
|
|
As at |
|
|
As at |
|
|
|
|
July 31, |
|
|
January 31, |
|
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Trade payables |
$ |
39,663 |
|
$ |
18,375 |
|
|
Accrued liabilities |
|
16,538 |
|
|
17,542 |
|
|
|
|
|
|
|
|
|
|
|
$ |
56,201 |
|
$ |
35,917 |
|
- 8 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
(a) Authorized
The authorized capital of the Company
consists of an unlimited number of common shares and an unlimited number of
preferred shares, each without par value.
(b) Issued
|
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2013 and July 31, 2013 |
|
83,953,825 |
|
$ |
28,104,264 |
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2014 and July 31, 2014 |
|
920,835,502 |
|
$ |
28,273,230 |
|
Under the Company's stock option plan
(the "Option Plan"), the directors of the Company can grant options to acquire
common shares of the Company to directors, employees and others who provide
ongoing services to the Company. Exercise prices cannot be less than the closing
price of the Company's shares on the trading day preceding the grant date and
the maximum term of any option cannot exceed ten years.
The number of common shares under
option at any time under the Option Plan or otherwise cannot exceed 5% of the
then outstanding common shares of the Company for any optionee. In addition,
options granted to insiders of the Company cannot exceed more than 10% of the
then outstanding common shares of the Company. Options granted may be subject to
vesting restrictions in the discretion of the board.
Option pricing models require the input
of highly subjective assumptions including the expected price volatility.
Changes in the subjective input assumptions can materially affect the fair value
estimate, and therefore the existing models do not necessarily provide a
reliable measure of the fair value of the Company's share purchase options.
The following table reflects the
continuity of stock options for the six months ended July 31, 2014 and 2013:
|
|
|
Number of |
|
|
Weighted Average
|
|
|
|
|
Stock Options |
|
|
Exercise Price |
|
|
Balance, January
31, 2013 |
|
3,800,000 |
|
$ |
0.27 |
|
|
Forfeited |
|
(750,000) |
|
$ |
0.10 |
|
|
Balance, July 31, 2013 |
|
3,050,000 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
Balance, January
31, 2014 |
|
2,350,000 |
|
$ |
0.25 |
|
|
Forfeited |
|
(2,200,000) |
|
$ |
0.26 |
|
|
Expired |
|
(150,000) |
|
$ |
0.10 |
|
|
Balance, July 31, 2014 |
|
- |
|
$ |
- |
|
- 9 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
8. |
Basic and Diluted Loss Per
Share |
The following table sets forth the
computation of basic and diluted loss per share:
|
|
|
Three
Months Ended |
|
|
Six Months
Ended |
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
$ |
(11,700 |
) |
$ |
(49,485 |
) |
$ |
(40,639 |
) |
$ |
(241,907 |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding for basic loss per share |
|
920,835,502 |
|
|
83,953,825 |
|
|
920,835,502 |
|
|
83,953,825 |
|
|
Weighted average number of common shares outstanding for
diluted loss per share |
|
920,835,502 |
|
|
83,953,825 |
|
|
920,835,502 |
|
|
83,953,825 |
|
|
Basic loss per share
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
|
Diluted loss per share |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
The stock options were not included in
the computation of diluted loss per share on July 31, 2014 and 2013 as their
inclusion would be anti-dilutive.
9. |
Related Party Transactions and
Balances |
Remuneration of Directors and key
management personnel of the Company was as follows:
|
|
|
Three
Months Ended |
|
|
Six Months
Ended |
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
paid to directors and officers (2) |
$ |
- |
|
$ |
62,308 |
|
$ |
- |
|
$ |
134,014 |
|
|
Share-based payments (1)
|
$ |
- |
|
$ |
17,871 |
|
$ |
- |
|
$ |
(1,471 |
) |
(1) Negative amount is the result
of the reversal of previously recorded share-based payments on forfeited
unvested options.
(2) Salaries and benefits include
director fees. The Board of Directors do not have employment or service
contracts with the Company. Also included above are the fees for the previous
Interim President and Chief Executive Officer and previous Chief Financial
Officer whose fees for services for the three and six months ended July 31, 2013
were $45,149 and $90,034 and $24,767 and $45,445, respectively.
Paul G. Smith, a former director and
Chairman of the Board, was the President and Chief Executive Officer of Equity
Financial Holdings Inc. ("Equity"), a company that provided financial services
to the Company until April 5, 2013. Fees for services provided by Equity totaled
$nil for the three and six months ended July 31, 2014 (three and six months
ended July 31, 2013 - $736 and $1,519, respectively).
- 10 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
9. |
Related Party Transactions and Balances
(Continued) |
Daniel Crandall, the Chief Financial
Officer, is a senior employee of Marrelli Support Services Inc. ("Marrelli
Support"), a firm providing accounting services. Marrelli Support's President,
Carmelo Marrelli, beneficially controls 278,960,559 common shares of the Company
through his holding company, C. Marrelli Services Ltd. Fees for services
provided by Marrelli Support totaled $2,241 and $6,313, respectively, for the
three and six months ended July 31, 2014 (three and six months ended July 31,
2013 - $nil). As at July 31, 2014, Marrelli Support was owed $2,420 and this
amount was included in accounts payable and accrued liabilities (January 31,
2014 - $nil).
During the three and six months ended
July 31, 2014, the Company incurred fees totaling $412 (three and six months
ended July 31, 2013 - $nil) for filing services received from DSA Filing
Services ("DSA"). Carmelo Marrelli is an officer and shareholder of DSA. As at
July 31, 2014, DSA was owed $544 and this amount was included in accounts
payable and accrued liabilities (January 31, 2014 - $nil).
During the three and six months ended
July 31, 2014, the Company also obtained a loan of $9,917 (CDN $10,813) (three
and six months ended July 31, 2013 - $nil) from C. Marrelli Services Ltd. This
loan is non-interest bearing and is due on demand.
During the three and six months ended
July 31, 2014, the Company incurred fees totaling $3,532 and $19,323,
respectively, (three and six months ended July 31, 2013 - $nil) for legal
services received from Kirsh Securities Law Professional Corporation, a law firm
owned by the President and Chief Executive Officer of the Company. An amount of
$19,332 is included in accounts payable and accrued liabilities at July 31, 2014
(January 31, 2014 - $nil).
During the three and six months ended
July 31, 2014, the Company incurred fees totaling $1,372 (three and six months
ended July 31, 2013 - $nil) for consulting services received from G. Duguay
Services Inc., a firm where George Duguay, a director and shareholder of the
Company, is the President. An amount of $1,376 is included in accounts payable
and accrued liabilities at July 31, 2014 (January 31, 2014 - $nil).
To the knowledge of the directors and
senior officers of the Company, as at July 31, 2014, no person or corporation
beneficially owns or exercises control over common shares of the Company
carrying more than 10% of the voting rights attached to all common shares of the
Company other than as set out below:
|
|
|
|
|
|
Percentage of |
|
|
|
|
Number of |
|
|
outstanding |
|
|
Major Shareholder |
|
common shares |
|
|
common shares |
|
|
|
|
|
|
|
|
|
|
Lonnie Kirsh, Chief Executive Officer and
Director |
|
278,960,559 |
|
|
30.29 % |
|
|
George Duguay, Director |
|
278,960,559 |
|
|
30.29 % |
|
|
C. Marrelli Services Ltd. |
|
278,960,559 |
|
|
30.29 % |
|
None of the Company's major shareholders have different
voting rights than other holders of the Company's common shares.
- 11 -
Royal Standard Minerals Inc.
|
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
July 31, 2014 |
(Unaudited)
|
The Companys previous wholly-owned
subsidiary, Manhattan Mining Co. ("Manhattan"), received several documents filed
in various district courts, one in Shelby County Chancery Court, Memphis,
Tennessee and one in Elko County District Court, Elko, Nevada, from certain
suppliers seeking payment of unpaid services provided to Manhattan and where
applicable, interest and court costs. In addition, one of the suppliers is
seeking compensation for unjust enrichment. Management of Manhattan attempted to
settle both claims on several occasions, but was unsuccessful.
Manhattan has been dissolved and the
Company is not liable to settle these claims.
11. |
General and
Administrative |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Corporate development
|
$ |
895 |
|
$ |
8,965 |
|
$ |
1,574 |
|
$ |
9,748 |
|
|
Insurance |
|
- |
|
|
7,045 |
|
|
- |
|
|
14,181 |
|
|
Office and general |
|
823
|
|
|
(3,653 |
) |
|
1,545
|
|
|
21,455
|
|
|
Professional fees |
|
8,610 |
|
|
(154,278 |
) |
|
36,110 |
|
|
(105,885 |
) |
|
Wages and salaries
(Note 9) |
|
-
|
|
|
62,308
|
|
|
-
|
|
|
134,014
|
|
|
Share-based payments (Note 9) |
|
- |
|
|
17,871 |
|
|
- |
|
|
(1,471 |
) |
|
Travel |
|
-
|
|
|
5,231 |
|
|
38
|
|
|
13,511
|
|
|
Consulting fees (Note 9) |
|
1,372 |
|
|
- |
|
|
1,372 |
|
|
- |
|
|
|
$ |
11,700 |
|
$ |
(56,511 |
) |
$ |
40,639 |
|
$ |
85,553 |
|
12. |
Segmented Information |
The Company's operations comprise a
single reporting segment which is currently inactive. As the operations comprise
a single reporting segment, amounts disclosed in the unaudited condensed interim
consolidated financial statements also represent segment amounts
- 12 -
ROYAL STANDARD MINERALS INC.
MANAGEMENTS DISCUSSION
AND ANALYSIS
THREE AND SIX MONTHS ENDED JULY 31, 2014
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis
|
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014 |
|
This Management Discussion and Analysis (MD&A) is dated
September 22, 2014 and unless otherwise noted, should be read in conjunction
with the Companys audited consolidated financial statements for the years ended
January 31, 2014 and 2013 and the notes thereto and the unaudited condensed
interim consolidated financial statements for the three and six months ended
July 31, 2014, together with the notes thereto. Results are reported in United
States dollars, unless otherwise noted. The Companys unaudited condensed
interim consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The unaudited condensed
interim consolidated financial statements have been prepared in accordance with
International Accounting Standard 34, Interim Financial Reporting. Accordingly,
they do not include all of the information required for full annual financial
statements required by IFRS. This MD&A was written to comply with the
requirements of National Instrument 51-102-Continuous Disclosure Obligations.
Unless otherwise noted, all amounts reported herein are in United States
dollars. In the opinion of management, all adjustments (which consist only of
normal recurring adjustments) considered necessary for a fair presentation have
been included. The results presented for the three and six months ended July 31,
2014 are not necessarily indicative of the results that may be expected for any
future period.
For the purposes of preparing this MD&A, management,
in conjunction with the Board of Directors, considers the materiality of
information. Information is considered material if (1) such information is a
change or a fact that has or would reasonably be expected to have, a significant
effect on the market price or value of the Companys common shares; or (2) there
is a substantial likelihood that a reasonable investor would consider it
important in making an investment decision; or (3) if it would significantly
alter the total mix of information available to investors. Management, in
conjunction with the Board of Directors, evaluates materiality with reference to
all relevant circumstances, including potential market sensitivity.
Additional information relating to the Company can be found on
SEDAR at www.sedar.com.
The Companys common shares are quoted in the United States of
America on the Over the Counter Bulletin Board OTC:BB, under the symbol
RYSMF.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This MD&A contains certain forward-looking information and
forward-looking statements, as defined in applicable securities laws
(collectively referred to herein as forward-looking statements). These
statements relate to future events or the Companys future performance. All
statements other than statements of historical fact are forward-looking
statements. Often, but not always, forward-looking statements can be identified
by the use of words such as plans, expects, is expected, budget,
scheduled, estimates, continues, forecasts, projects, predicts,
intends, anticipates or believes, or variations of, or the negatives of,
such words and phrases, or state that certain actions, events or results may,
could, would, should, might or will be taken, occur or be achieved.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially from those
anticipated in such forward-looking statements. The forward-looking statements in this MD&A speak only as of the date of
this MD&A or as of the date specified in such statement. The following table
outlines certain significant forward-looking statements contained in this
MD&A and provides the material assumptions used to develop such
forwardlooking statements and material risk factors that could cause actual
results to differ materially from the forward-looking statements.
2
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
Forward-looking
statements |
Assumptions |
Risk
factors |
The Company will be able to continue its business
activities |
The Company has anticipated all material costs and the
operating activities of the Company, and such costs and activities will be
consistent with the Companys current expectations; the Company will be
able to obtain shareholder loans or equity funding when required |
Unforeseen costs to the Company will arise; any
particular operating cost increase or decrease from the date of the
estimation; and capital markets not being favourable for funding and/or
related parties discontinue funding the Company resulting in the Company
not being able to obtain financing when required or on acceptable terms
|
The Company will be able to carry out anticipated
business plans |
The operating activities of the Company for the twelve
months ending July 31, 2015, will be consistent with the Companys current
expectations |
Sufficient funds not being available; increases in costs;
the Company may be unable to retain key personnel |
Inherent in forward-looking statements are risks, uncertainties
and other factors beyond the Companys ability to predict or control. Please
also make reference to those risk factors referenced in the Risk Factors
section below. Readers are cautioned that the above chart does not contain an
exhaustive list of the factors or assumptions that may affect the
forward-looking statements, and that the assumptions underlying such statements
may prove to be incorrect. Actual results and developments are likely to differ,
and may differ materially, from those expressed or implied by the
forward-looking statements contained in this MD&A.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the Companys actual results,
performance or achievements to be materially different from any of its future
results, performance or achievements expressed or implied by forward-looking
statements. All forward-looking statements herein are qualified by this
cautionary statement. Accordingly, readers should not place undue reliance on
forward-looking statements. The Company undertakes no obligation to update
publicly or otherwise revise any forward-looking statements whether as a result
of new information or future events or otherwise, except as may be required by
law. If the Company does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with respect to
those or other forward-looking statements, unless required by law.
3
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
DESCRIPTION OF BUSINESS AND GOING CONCERN
The Company has no business operations, except to fund ongoing
operations as a reporting issuer and to repay existing creditors and is
currently seeking new business opportunities. Success in identifying a suitable
new asset or business for the Company is uncertain. Unless the Company can
identify a suitable asset or business opportunity and/or obtain additional
financing in the near term, there is significant doubt on the ability of the
Company to continue as a going concern. Without a suitable asset or business
opportunity and/or additional financing, the Company will be required to
consider the basis on which it will continue as an entity. The Company has no
operating revenues and therefore it must utilize current cash and cash
equivalents to satisfy outstanding liabilities.
The Companys financial statements have been prepared on the
basis of accounting principles applicable to a going concern, which assume that
the Company will continue in operation for the foreseeable future and will be
able to realize its assets and discharge its liabilities in the normal course of
operations as they come due. In assessing whether the going concern assumption
is appropriate, management takes into account all available information about
the future, which is at least, but is not limited to, twelve months from the end
of the reporting period. Management is aware, in making its assessment, of
material uncertainties related to events or conditions that cast significant
doubt upon the entity's ability to continue as a going concern. The Company had
a loss of $40,639 during the six months ended July 31, 2014 (six months ended
July 31, 2013 - loss of $241,907), has an accumulated deficit of $39,233,766
(January 31, 2014 - accumulated deficit of $39,193,127). In addition, the
Company has a working capital deficiency of $53,608 at July 31, 2014 (January
31, 2014 - working capital deficiency of $13,557).
The Companys ability to continue to meet its obligations is
uncertain and, as a result, there is significant doubt regarding the going
concern assumption and, accordingly, the ultimate appropriateness of the use of
accounting principles applicable to a going concern. The Company has no
remaining property interests and no business operations, except to fund ongoing
operations as a reporting issuer and to repay existing creditors and is
currently focused on identifying suitable assets or businesses to acquire or
merge with. Success in identifying a suitable new asset or business for the
Company is uncertain. Furthermore, the Company has limited working capital to
pursue such opportunities. Unless the Company can identify a suitable asset or
business opportunity and/or obtain additional financing in the near term, there
is significant doubt on the ability of the Company to repay its outstanding
liabilities. If the Company is unable to extinguish all of its outstanding
liabilities, the going concern assumption will not be valid. The financial
statements do not reflect the adjustments to the carrying values or
classifications of assets and liabilities or to the reported expenses that would
be necessary if the Company were unable to realize its assets and settle its
liabilities as a going concern in the normal course of operations for the
foreseeable future. These adjustments could be material.
4
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
OVERALL PERFORMANCE
The Companys net loss for the six months ended July 31, 2014
was $40,639 ($0.00 loss per share) and for the six months ended July 31, 2013
was $241,907 ($0.00 loss per share), a decrease in net loss of $201,268. The
reduction in net loss relates mainly to a reduction of $103,649 in total
exploration and evaluation expenditures as a result of the sale of all property
interests in the prior year and a decrease in administrative expenses of
$44,914, primarily as a result of lower office and general expenses,
professional fees and consulting, wages and salaries as a result of the Company
no longer having any active business operations.
FINANCIAL PERFORMANCE
Six months ended July 31, 2014, compared with six months
ended July 31, 2013
The Companys net loss for the six months ended July 31, 2014
was $40,639 ($0.00 loss per share) compared to $241,907 ($0.00 loss per share)
for the six months ended July 31, 2013, on no revenue. The decrease of $201,268
was principally the result of:
|
Exploration and evaluation expenditures decreased
$103,649 to $nil for the six months ended July 31, 2014, compared to the
same period in 2013. The decrease was the result of the sale of all
property interests in the prior year. |
|
Foreign currency translation adjustment decreased by
$32,049 to $nil for the six months ended July 31, 2014, compared to the
same period in 2013. The decrease is the result of the change in
functional currency in the prior year resulting in the foreign currency
translation adjustment being recorded in comprehensive loss. |
|
Office and general expense decreased by $19,910 to $1,545
for the six months ended July 31, 2014, compared to the same period in
2013. The decrease was the result of the Company no longer having any
active business operations. |
|
Wages and salaries decreased $134,014 to $nil for the six
months ended July 31, 2014, compared to the same period in 2013. The
decrease was the result of the Company no longer having any operations.
|
|
Professional fees increased to $36,110 for the six months
ended July 31, 2014, compared to a recovery of $105,885 for the same
period in 2013. The recovery for 2013 was the result of the reversal of
certain accrued legal expenses arising from full and final settlement of
certain legal action. |
|
Impairment of marketable securities decreased $29,999 to
$nil for the six months ended July 31, 2014, compared to the same period
in 2013. The decrease was the result of the Company impairing all
marketable securities to $nil in the prior year. |
5
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
Three months ended July 31, 2014, compared with three months
ended July 31, 2013
The Companys net loss for the three months ended July 31, 2014
was $11,700 ($0.00 loss per share) compared to $49,485 ($0.00 loss per share)
for the three months ended July 31, 2013, on no revenue. The decrease of $37,785
was principally the result of:
|
Exploration and evaluation expenditures
decreased $71,187 to $nil for the three months ended July 31, 2014,
compared to the same period in 2013. The decrease was the result of the
sale of all property interests in the prior year. |
|
Foreign currency translation adjustment decreased by
$4,810 to $nil for the three months ended July 31, 2014, compared to the
same period in 2013. The decrease is the result of the change in
functional currency in the prior year resulting in the foreign currency
translation adjustment being recorded in comprehensive loss. |
|
Professional fees increased to $8,610 for the three
months ended July 31, 2014, compared to a recovery of $154,278 for the
same period in 2013. The recovery for 2013 was the result of the reversal
of certain accrued legal expenses arising from full and final settlement
of certain legal action. |
|
Wages and salaries decreased $62,308 to $nil for the
three months ended July 31, 2014, compared to the same period in 2013. The
decrease was the result of the Company no longer having any active
business operations. |
|
Impairment of marketable securities decreased $29,999 to
$nil for the three months ended July 31, 2014, compared to the same period
in 2013. The decrease was the result of the Company impairing all
marketable securities to $nil in the prior year. |
SUMMARY OF QUARTERLY RESULTS
The following is a summary of selected financial information of
the Company for the quarterly periods indicated.
Three
Months Ended |
Net
Revenues ($) |
Net Income (Loss) ($) |
July 31, 2014 |
nil |
(11,700) |
(0.00) |
April 30, 2014 |
nil |
(28,939) |
(0.00) |
January 31, 2014 |
nil |
270,714 |
0.00 |
October 31, 2013 |
nil |
40,418 |
0.00 |
July 31, 2013 |
nil |
(49,485) |
(0.00) |
April 30, 2013 |
nil |
(192,422) |
(0.00) |
January 31, 2013 |
nil |
15,039,966 |
0.18 |
October 31, 2012 |
nil |
(3,858,506) |
(0.05) |
6
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014 |
|
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no positive operating cash flow and
has to date, financed its activities and its ongoing expenditures primarily
through equity transactions such as equity offerings, the exercise of warrants
and other financing arrangements. The Company believes that additional financing
will be required to fund its operating expenses as it searches for suitable
assets and businesses to merge with or acquire.
As at July 31, 2014, the Company had cash and cash equivalents
of $11,173. Cash used in operating activities was $15,551 for the six months
ended July 31, 2014. During the six months ended July 31, 2014, the Company
experienced a net increase of $24,500 in non-cash working capital items, which
was due to a decrease in sundry receivables and prepaid of $4,216 and increase
in accounts payable and accrued liabilities of $20,284. Cash provided by
financing activities was $9,917 for the six months ended July 31, 2014 due to
advances from a shareholder.
The Company's approach to managing liquidity risk has been to
ensure that it will have sufficient liquidity to meet liabilities when due. As
at July 31, 2014, the Company had cash and cash equivalents of $11,173 compared
to $16,807 as at January 31, 2014, to settle current liabilities of $66,118
compared to $35,917 as at January 31, 2014. The Company currently does not have
sufficient cash and cash equivalents to settle current liabilities. All of the
Company's financial liabilities have contractual maturities of less than 60 days
and are subject to normal trade terms. The Company regularly evaluates its cash
position in an effort to maintain its liquidity.
There is no assurance that future equity or debt capital will
be available to the Company in the amounts or at the times desired, or on terms
that are acceptable to the Company, if at all. See Risk Factors below.
As at July 31, 2014 and the date of this MD&A, the Company
had 920,835,502 common shares issued and outstanding and no stock options
outstanding. The Companys liquidity risk with financial instruments is minimal
as any excess cash, when present, is deposited with a Schedule I Canadian bank.
7
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
RELATED PARTY TRANSACTIONS
Remuneration of Directors and key management personnel of the
Company was as follows:
|
Three
Months Ended July 31, |
Six Months
Ended July 31, |
|
2014 ($) |
2013 ($) |
2014 ($) |
2013 ($) |
Salaries and benefits paid to
directors and officers (2) |
nil |
62,308 |
nil |
134,014 |
Share-based payments (1)
|
nil |
17,871 |
nil |
(1,471)
|
(1) |
Negative amount is the result of previously recorded
share-based payments on forfeited unvested options. |
|
|
(2) |
Salaries and benefits include director fees. The Board of
Directors do not have employment or service contracts with the Company.
Also included above are the fees for the previous Interim President and
Chief Executive Officer and previous Chief Financial Officer whose fees
for services for the three and six months ended July 31, 2013 were $45,149
and $90,034 and $24,767 and $45,445, respectively. |
Paul G. Smith, a former director and Chairman of the Board, was
the President and Chief Executive Officer of Equity Financial Holdings Inc.
("Equity"), a company that provided financial services to the Company until
April 5, 2013. Fees for services provided by Equity totaled $nil for the three
and six months ended July 31, 2014 (three and six months ended July 31, 2013 -
$736 and $1,519, respectively).
Daniel Crandall, the Chief Financial Officer, is a senior
employee of Marrelli Support Services Inc. ("Marrelli Support"), a firm
providing accounting services. Marrelli Support's President, Carmelo Marrelli,
beneficially controls 278,960,559 common shares of the Company through his
holding company, C. Marrelli Services Ltd. Fees for services provided by
Marrelli Support totaled $2,241 and $6,313, respectively, for the three and six
months ended July 31, 2014 (three and six months ended July 31, 2013 - $nil). As
at July 31, 2014, Marrelli Support was owed $2,420 and this amount was included
in accounts payable and accrued liabilities (January 31, 2014 - $nil).
During the three and six months ended July 31, 2014, the
Company incurred fees totaling $412 (three and six months ended July 31, 2013 -
$nil) for filing services received from DSA Filing Services ("DSA"). Carmelo
Marrelli is an officer and shareholder of DSA. As at July 31, 2014, DSA was owed
$544 and this amount was included in accounts payable and accrued liabilities
(January 31, 2014 - $nil).
8
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
During the three and six months ended July 31, 2014, the
Company also obtained a loan of $9,917 (CDN $10,813) (three and six months ended
July 31, 2013 - $nil) from C. Marrelli Services Ltd. This loan is non-interest
bearing and is due on demand.
During the three and six months ended July 31, 2014, the
Company incurred fees totaling $3,532 and $19,323, respectively, (three and six
months ended July 31, 2013 - $nil) for legal services received from Kirsh
Securities Law Professional Corporation, a law firm owned by the President and
Chief Executive Officer of the Company. An amount of $19,332 is included in
accounts payable and accrued liabilities at July 31, 2014 (January 31, 2014 -
$nil).
During the three and six months ended July 31, 2014, the
Company incurred fees totaling $1,372 (three and six months ended July 31, 2013
- $nil) for consulting services received from G. Duguay Services Inc., a firm
where George Duguay, a director and shareholder of the Company, is the
President. An amount of $1,376 is included in accounts payable and accrued
liabilities at July 31, 2014 (January 31, 2014 - $nil).
To the knowledge of the directors and senior officers of the
Company, as at July 31, 2014, no person or corporation beneficially owns or
exercises control over common shares of the Company carrying more than 10% of
the voting rights attached to all common shares of the Company other than as set
out below:
Major Shareholder |
Number of
common shares |
Percentage of
outstanding common shares |
Lonnie Kirsh, Chief Executive Officer
and Director |
278,960,559 |
30.29 % |
George Duguay, Director |
278,960,559 |
30.29 % |
C. Marrelli Services Ltd. |
278,960,559 |
30.29 %
|
None of the Company's major shareholders have different voting
rights than other holders of the Company's common shares.
SHARE CAPITAL
The Company is authorized to issue an unlimited number of
common shares and preferred shares. As of the date of this MD&A, the Company
had 920,835,502 common shares outstanding.
CONTINGENCIES
The Companys previous wholly-owned subsidiary, Manhattan
Mining Co. ("Manhattan"), received several documents filed in various district
courts, one in Shelby County Chancery Court, Memphis, Tennessee and one in Elko
County District Court, Elko, Nevada, from certain suppliers seeking payment of
unpaid services provided to Manhattan and where applicable, interest and court costs. In addition, one of the
suppliers is seeking compensation for unjust enrichment. Management attempted to
settle both claims on several occasions, but was unsuccessful.
Manhattan has been dissolved and the Company is not liable to settle these
claims.
9
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
OFF BALANCE SHEET ARRANGEMENTS
As of the date hereof, management believes 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 results of operations or financial
condition of the Company, including, and without limitation, such considerations
as liquidity and capital resources.
NEW ACCOUNTING PRONOUNCEMENTS
IFRS 9 Financial instruments (IFRS 9) was issued by the
IASB in October 2010 and will replace IAS 39 - Financial Instruments:
Recognition and Measurement (IAS 39). IFRS 9 uses a single approach to
determine whether a financial asset is measured at amortized cost or fair value,
replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how
an entity manages its financial instruments in the context of its business model
and the contractual cash flow characteristics of the financial assets. Most of
the requirements in IAS 39 for classification and measurement of financial
liabilities were carried forward unchanged to IFRS 9. The new standard also
requires a single impairment method to be used, replacing the multiple
impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning
on or after January 1, 2018. Earlier adoption is permitted.
CHANGE IN ACCOUNTING POLICIES
IAS 32 Financial Instruments: Presentation (IAS 32) was
amended by the IASB in December 2011 to clarify certain aspects of the
requirements on offsetting. The amendments focus on the criterion that an entity
currently has a legally enforceable right to set off the recognized amounts and
the criterion that an entity intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously. At February 1, 2014,
the Company adopted this pronouncement and there was no material impact on the
Company's unaudited condensed interim consolidated financial statements.
MANAGEMENT OF CAPITAL
The Company manages its capital with the following objectives:
|
to ensure sufficient financial flexibility to
achieve the ongoing business objectives; and |
|
to maximize shareholder return through
enhancing the share value. |
10
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
The Company monitors its capital structure and makes
adjustments according to market conditions in an effort to meet its objectives
given the current outlook of the business and industry in general. The Company
may manage its capital structure by issuing new shares, repurchasing outstanding
shares, adjusting capital spending, or disposing of assets. The capital
structure is reviewed by Management and the Board of Directors on an ongoing
basis.
The Company's equity comprises of share capital, reserves,
accumulated other comprehensive income and accumulated deficit, which at July
31, 2014 was a deficiency of $53,608 (January 31, 2014 - deficiency of $13,557).
Note that included in the unaudited condensed interim consolidated statements of
financial position presented is a deficit of $39,233,766 as at July 31, 2014
(January 31, 2014 - $39,193,127).
The Company manages capital through its financial and
operational forecasting processes. The Company reviews its working capital and
forecasts its future cash flows based on operating expenditures, and other
investing and financing activities. Selected information is provided to the
Board of Directors of the Company. The Companys capital management objectives,
policies and processes have remained unchanged during the six months ended July
31, 2014. The Company is not subject to external capital requirements.
FINANCIAL RISK FACTORS
The Company's financial instruments, consisting of cash and
cash equivalents, sundry receivables and accounts payable and accrued
liabilities, approximate fair values due to the relatively short-term maturities
of the instruments. It is managements opinion that the Company is not exposed
to significant interest, currency or credit risks arising from these financial
instruments.
Risk management is carried out by the Company's management team
with guidance from the Audit Committee under policies approved by the Board of
Directors. The Board of Directors also provides regular guidance for overall
risk management.
Liquidity risk
The Company's approach to managing liquidity risk is to ensure
that it will have sufficient liquidity to meet liabilities when due. As at July
31, 2014, the Company had a cash balance of $11,173 (January 31, 2014 - $16,807)
to settle current liabilities of $66,118 (January 31, 2014 - $35,917). All of
the Company's financial liabilities have contractual maturities of less than 60
days and are subject to normal trade terms.
It is expected the Company will be funded by shareholder loans
or private placements from related parties until the Company finds an asset or
business to incorporate into the Company.
11
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
RISK FACTORS
At the present time, the Company does not hold any interest in
an active operating business or asset. The Company's viability and potential
success lie in its ability to develop, exploit and generate revenue from a
future asset or business acquisition. Revenues, profitability and cash flow from
any future asset or business acquisition involving the Company are difficult to
predict and will be influenced by factors unknown to management at the present
time. The Company has limited financial resources and there is no assurance that
it will be able to obtain adequate financing in the future or that the terms of
any such financing will be favourable. Failure to obtain such additional
financing could result in delay or indefinite postponement of future business
activities of the Company with the possible dilution or loss of such business
activities.
Additionally, directors and officers of the Company may also
serve as directors and/or officers of other public companies from time to time.
Consequently, such directors and officers will be dividing
their time between their duties to the Company and their duties to their other
reporting issuers.
DISCLOSURE OF INTERNAL CONTROLS
Management has established processes to provide it with
sufficient knowledge to support representations that it has exercised reasonable
diligence to ensure that (i) the unaudited condensed interim consolidated
financial statements do not contain any untrue statement of material fact or
omit to state a material fact required to be stated or that is necessary to make
a statement not misleading in light of the circumstances under which it is made,
as of the date of and for the periods presented by the unaudited condensed
interim consolidated financial statements, and (ii) the unaudited condensed
interim consolidated financial statements fairly present in all material
respects the financial condition, results of operations and cash flow of the
Company, as of the date of and for the periods presented.
In contrast to the certificate required for non-venture issuers
under National Instrument 52-109, Certification of Disclosure in Issuers Annual
and Interim Filings (NI 52-109), the Venture Issuer Basic Certificate filed by
the Company does not include representations relating to the establishment and
maintenance of disclosure controls and procedures (DC&P) and internal
control over financial reporting (ICFR), as defined in NI 52-109. In
particular, the certifying officers filing such certificate are not making any
representations relating to the establishment and maintenance of:
|
(i) |
controls and other procedures designed to provide
reasonable assurance that information required to be disclosed by the
issuer in its annual filings, interim filings or other reports filed or
submitted under securities legislation is recorded, processed, summarized
and reported within the time periods specified in securities legislation;
and |
12
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
|
(ii) |
a process to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with the issuers generally
accepted accounting principles (IFRS). |
The Companys certifying officers are responsible for ensuring
that processes are in place to provide them with sufficient knowledge to support
the representations they are making in such certificate. Investors should be
aware that inherent limitations on the ability of certifying officers of a
venture issuer to design and implement on a cost effective basis DC&P and
ICFR as defined in NI 52-109 may result in additional risks to the quality,
reliability, transparency and timeliness of interim and annual filings and other
reports provided under securities legislation.
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT
SIGNIFICANT REVENUE
The following tables set forth a breakdown of the components of
general and administrative expenditures and exploration and evaluation
expenditures on mineral properties for the Company, for the three and six months
ended July 31, 2014 and 2013.
General and Administrative:
|
Three
Months Ended July 31, |
Six Months
Ended July 31, |
|
2014 ($)
|
2013 ($)
|
2014 ($)
|
2013 ($)
|
Corporate development |
895 |
8,965 |
1,574 |
9,748 |
Insurance |
- |
7,045 |
- |
14,181 |
Office and general |
823 |
(3,653) |
1,545 |
21,455 |
Professional fees |
8,610 |
(154,278) |
36,110 |
(105,885) |
Wages and salaries |
- |
62,308 |
- |
134,014 |
Share-based payments |
- |
17,871 |
- |
(1,471) |
Travel |
- |
5,231 |
38 |
13,511 |
Consulting fees |
1,372 |
- |
1,372 |
- |
Total |
11,700 |
(56,511) |
40,639 |
85,553
|
13
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis |
Three and Six Months Ended July 31, 2014 |
Discussion Dated
September 22, 2014
|
|
Exploration and Evaluation Expenditures on Mineral Properties:
|
Three
Months Ended July 31, |
Six Months
Ended July 31, |
|
2014 ($) |
2013 ($) |
2014 ($) |
2013 ($) |
Fondaway Canyon and Dixie-Comstock
Projects |
|
|
|
|
Property acquisition costs |
- |
35,000 |
- |
35,000 |
Consulting, wages and salaries |
- |
11,846 |
- |
38,461 |
Travel |
- |
3,150 |
- |
4,498 |
Office and general |
- |
1,084 |
- |
2,030 |
Total Fondaway Canyon and Dixie- Comstock Projects
|
- |
51,080 |
- |
79,989 |
|
Kentucky Project |
|
|
|
|
Office and general |
- |
18,328 |
- |
20,102 |
Depreciation |
- |
1,779 |
- |
3,558 |
Total Kentucky Project |
- |
20,107 |
- |
23,660 |
|
Total exploration activities
|
- |
71,187 |
- |
103,649
|
14
FORM 52-109FV2
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, Lonnie Kirsh, the President and Chief Executive
Officer of Royal Standard Minerals Inc., certify the following:
|
|
|
|
1. |
Review: I have reviewed the interim financial
report and interim MD&A (together, the interim filings) of Royal
Standard Minerals Inc. (the issuer) for the interim period ended
July 31, 2014. |
|
|
|
|
2. |
No misrepresentations: Based on my knowledge,
having exercised reasonable diligence, the interim filings do not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated or that is necessary to make a statement not
misleading in light of the circumstances under which it was made, with
respect to the period covered by the interim filings. |
|
|
|
|
3. |
Fair presentation: Based on my knowledge, having
exercised reasonable diligence, the interim financial report together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, financial
performance and cash flows of the issuer, as of the date of and for the
periods presented in the interim filings. |
Date: September 22, 2014 |
|
|
Lonnie
Kirsh
|
Lonnie Kirsh |
President and Chief Executive Officer
|
NOTE TO READER |
|
|
In contrast to the certificate required for non-venture
issuers under National Instrument 52-109 Certification of Disclosure in
Issuers Annual and Interim Filings (NI 52-109), this Venture
Issuer Basic Certificate does not include representations relating to the
establishment and maintenance of disclosure controls and procedures
(DC&P) and internal control over financial reporting (ICFR), as
defined in NI 52-109. In particular, the certifying officers filing this
certificate are not making any representations relating to the
establishment and maintenance of |
|
|
i) |
controls and other procedures designed to provide
reasonable assurance that information required to be disclosed by the
issuer in its annual filings, interim filings or other reports filed or
submitted under securities legislation is recorded, processed, summarized
and reported within the time periods specified in securities legislation;
and |
|
|
ii) |
a process to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with the issuers GAAP.
|
|
|
The issuers certifying officers are responsible for
ensuring that processes are in place to provide them with sufficient
knowledge to support the representations they are making in this
certificate. Investors should be aware that inherent limitations on the
ability of certifying officers of a venture issuer to design and implement
on a cost effective basis DC&P and ICFR as defined in NI 52-109 may
result in additional risks to the quality, reliability, transparency and
timeliness of interim and annual filings and other reports provided under
securities legislation. |
|
FORM 52-109FV2
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, Daniel Crandall, the Chief Financial
Officer of Royal Standard Minerals Inc., certify the following: |
|
|
1. |
Review: I have reviewed the interim financial
report and interim MD&A (together, the interim filings) of Royal
Standard Minerals Inc. (the issuer) for the interim period ended
July 31, 2014. |
|
|
2. |
No misrepresentations: Based on my knowledge,
having exercised reasonable diligence, the interim filings do not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated or that is necessary to make a statement not
misleading in light of the circumstances under which it was made, with
respect to the period covered by the interim filings. |
|
|
3. |
Fair presentation: Based on my knowledge, having
exercised reasonable diligence, the interim financial report together with
the other financial information included in the interim filings fairly
present in all material respects the financial condition, financial
performance and cash flows of the issuer, as of the date of and for the
periods presented in the interim filings. |
Date: September 22, 2014 |
|
|
Daniel
Crandall
|
Daniel Crandall |
Chief Financial Officer |
NOTE TO READER |
|
|
In contrast to the certificate required for non-venture
issuers under National Instrument 52-109 Certification of Disclosure in
Issuers Annual and Interim Filings (NI 52-109), this Venture
Issuer Basic Certificate does not include representations relating to the
establishment and maintenance of disclosure controls and procedures
(DC&P) and internal control over financial reporting (ICFR), as
defined in NI 52-109. In particular, the certifying officers filing this
certificate are not making any representations relating to the
establishment and maintenance of |
|
|
|
i) |
controls and other procedures designed to provide
reasonable assurance that information required to be disclosed by the
issuer in its annual filings, interim filings or other reports filed or
submitted under securities legislation is recorded, processed, summarized
and reported within the time periods specified in securities legislation;
and |
|
|
|
|
ii) |
a process to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with the issuers GAAP.
|
|
|
|
|
The issuers certifying officers are responsible for
ensuring that processes are in place to provide them with sufficient
knowledge to support the representations they are making in this
certificate. Investors should be aware that inherent limitations on the
ability of certifying officers of a venture issuer to design and implement
on a cost effective basis DC&P and ICFR as defined in NI 52-109 may
result in additional risks to the quality, reliability, transparency and
timeliness of interim and annual filings and other reports provided under
securities legislation. |
|
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