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 January, 2015
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: January 14, 2015 |
By: |
/s/ Daniel Crandall |
|
|
|
|
|
Daniel Crandall |
|
Title: |
Chief Financial Officer |
|
Royal Standard Minerals Inc. |
|
(Expressed in United States Dollars) |
|
Condensed Interim Consolidated Financial
Statements |
|
October 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 |
|
|
|
October 31, |
|
|
January 31, |
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,951 |
|
$ |
16,807 |
|
Sundry receivables and prepaids
(Note 4) |
|
450 |
|
|
5,553 |
|
Total
assets |
$ |
11,401 |
|
$ |
22,360 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Accounts payable and accrued
liabilities (Note 6) |
$ |
54,306 |
|
$ |
35,917 |
|
Note payable (Notes 7 and 11)
|
|
11,935 |
|
|
- |
|
Total
liabilities |
|
66,241 |
|
|
35,917 |
|
Shareholders' Deficiency |
|
|
|
|
|
|
Share capital (Note 8(b)) |
|
28,273,230 |
|
|
28,273,230 |
|
Reserves |
|
10,900,438 |
|
|
10,900,438 |
|
Accumulated deficit |
|
(39,236,316 |
) |
|
(39,193,127 |
) |
Accumulated other comprehensive income |
|
7,808 |
|
|
5,902 |
|
Total
shareholder's deficiency |
|
(54,840 |
) |
|
(13,557 |
) |
Total liabilities and shareholders' deficiency |
$ |
11,401 |
|
$ |
22,360 |
|
|
|
|
|
|
|
|
The Company and Operations and Going
Concern (Note 1) |
|
|
|
|
|
|
Contingencies (Note 12) |
|
|
|
|
|
|
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 |
|
|
Nine Months Ended |
|
|
|
October 31, |
|
|
October 31, |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Exploration and evaluation expenditures
(Note 5) |
$ |
- |
|
$ |
(16,416 |
) |
$ |
- |
|
$ |
87,233 |
|
General and
administrative (Note 13) |
|
2,550 |
|
|
178,123 |
|
|
43,189 |
|
|
263,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,550 |
|
|
161,707 |
|
|
43,189 |
|
|
350,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(2,550 |
) |
|
(161,707 |
) |
|
(43,189 |
) |
|
(350,909 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
- |
|
|
(57 |
) |
|
- |
|
|
9,286 |
|
Impairment of marketable securities |
|
- |
|
|
- |
|
|
- |
|
|
(29,999 |
) |
Gain on sale of property interests and related assets (Note
5(a)) |
|
- |
|
|
123,228 |
|
|
- |
|
|
123,228 |
|
Gain on dissolution of subsidiary (Note 3) |
|
- |
|
|
30,100 |
|
|
- |
|
|
30,100 |
|
Gain on settlement and release (Note 5(b)) |
|
- |
|
|
48,091 |
|
|
- |
|
|
48,091 |
|
Foreign currency translation adjustment |
|
- |
|
|
763 |
|
|
- |
|
|
(31,286 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income for the period |
$ |
(2,550 |
) |
$ |
40,418 |
|
$ |
(43,189 |
) |
$ |
(201,489 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per share (Note 10) |
$ |
(0.00 |
) |
$ |
0.00 |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
Diluted (loss) income per share (Note 10) |
$ |
(0.00 |
) |
$ |
0.00 |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
![](smlogo.jpg)
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) Income |
(Expressed in United States Dollars) |
(Unaudited)
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
October 31, |
|
|
October 31, |
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income for the period |
$ |
(2,550 |
) |
$ |
40,418 |
|
$ |
(43,189 |
) |
$ |
(201,489 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified subsequently to
income |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation |
|
1,318 |
|
|
- |
|
|
1,906 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income for the period |
$ |
(1,232 |
) |
$ |
40,418 |
|
$ |
(41,283 |
) |
$ |
(201,489 |
) |
![](smlogo.jpg)
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 |
|
- |
|
|
16,400 |
|
|
- |
|
|
- |
|
|
16,400 |
|
Net loss for the period |
|
- |
|
|
- |
|
|
(201,489 |
) |
|
- |
|
|
(201,489 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, October 31, 2013 |
$ |
28,104,264 |
|
$ |
11,026,704 |
|
$ |
(39,463,841 |
) |
$ |
- |
|
$ |
(332,873 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 31, 2014 |
$ |
28,273,230 |
|
$ |
10,900,438 |
|
$ |
(39,193,127 |
) |
$ |
5,902 |
|
$ |
(13,557 |
) |
Foreign currency translation
|
|
- |
|
|
- |
|
|
- |
|
|
1,906 |
|
|
1,906 |
|
Net
loss for the period |
|
- |
|
|
- |
|
|
(43,189 |
) |
|
- |
|
|
(43,189 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, October 31, 2014 |
$ |
28,273,230 |
|
$ |
10,900,438 |
|
$ |
(39,236,316 |
) |
$ |
7,808 |
|
$ |
(54,840 |
) |
![](smlogo.jpg)
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)
|
|
|
Nine Months Ended |
|
|
|
October 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
Net loss for the period |
$ |
(43,189 |
) |
$ |
(201,489 |
) |
Operating items not involving cash: |
|
|
|
|
|
|
Depreciation |
|
- |
|
|
3,558 |
|
Accretion in
asset retirement obligations |
|
- |
|
|
5,280 |
|
Share-based payments |
|
- |
|
|
16,400 |
|
Impairment of
marketable securities |
|
- |
|
|
29,999 |
|
Gain on sale of property
interests |
|
- |
|
|
(123,228 |
) |
Gain on
dissolution of subsidiary |
|
- |
|
|
(30,100 |
) |
Lawsuit settlement |
|
- |
|
|
(8,000 |
) |
Gain on
settlement and release |
|
- |
|
|
(48,091 |
) |
Foreign exchange |
|
1,906 |
|
|
- |
|
Changes in non-cash working capital: |
|
|
|
|
|
|
Sundry receivables and prepaids |
|
5,103 |
|
|
2,698,728 |
|
Accounts payable and accrued
liabilities |
|
18,389 |
|
|
(1,747,987 |
) |
|
|
|
|
|
|
|
Cash (used in) provided by operating activities |
|
(17,791 |
) |
|
595,070 |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Note payable |
|
11,935 |
|
|
- |
|
Other repayments |
|
- |
|
|
(600,000 |
) |
Proceeds from sale
of property interests and related assets, net of transaction costs |
|
- |
|
|
123,228 |
|
|
|
|
|
|
|
|
Cash provided by
(used in) financing activities |
|
11,935 |
|
|
(476,772 |
) |
|
|
|
|
|
|
|
Change in cash and cash equivalents |
|
(5,856 |
) |
|
118,298 |
|
Cash and cash equivalents, beginning of period |
|
16,807 |
|
|
201,565 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
$ |
10,951 |
|
$ |
319,863 |
|
![](smlogo.jpg)
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) |
October 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, Canada. |
|
|
|
The unaudited condensed interim consolidated financial
statements were approved by the Board of Directors on December 10,
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 $43,189 during the nine months ended
October 31, 2014 (nine months ended October 31, 2013 - loss of $201,489)
and has an accumulated deficit of $39,236,316 (January 31, 2014 -
$39,193,127). In addition, the Company has a working capital deficiency of
$54,840 at October 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. |
![](smlogo.jpg)
- 6 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 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 December 10, 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. The Company is in the process of assessing
the impact of this pronouncement. |
|
|
3. |
Dissolution of Subsidiary |
|
|
|
On September 5, 2013, the Kentucky Secretary of State
accepted the articles of dissolution for Kentucky Standard Energy Company,
Inc. ("Kentucky") and Kentucky has been dissolved. As a result, a gain on
dissolution of subsidiary of $30,100 was recorded as a result of accounts
payable and accrued liabilities dissolved. |
|
|
4. |
Sundry Receivables and
Prepaids |
|
|
|
As at |
|
|
As at |
|
|
|
|
October 31, |
|
|
January 31, |
|
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Sales tax receivables |
$ |
450 |
|
$ |
5,193 |
|
|
Prepaid expenses |
|
- |
|
|
360
|
|
|
|
|
|
|
|
|
|
|
|
$ |
450 |
|
$ |
5,553
|
|
![](smlogo.jpg)
- 7 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
5. |
Exploration and Evaluation Expenditures on Mineral
Properties |
|
|
|
|
(a) |
Fondaway Canyon and Dixie-Comstock
Projects |
|
|
|
|
|
On August 9, 2013, the Company completed its transaction
with American Innovative Minerals LLC (AIMLLC) to sell its interests in
the Fondaway Canyon and Dixie-Comstock properties (the Transaction) for
cash consideration of $144,000. As a result, the Company recorded a gain
on sale of property interests of $123,228, net of transaction
costs. |
|
|
|
|
|
In addition, as a condition to the closing of the
Transaction, Hale Capital Management, LP and Hale Capital Partners, LP
(together, Hale Capital) delivered to the Company a full and final
release and settlement agreement relating to the legal action commenced by
Hale Capital on September 27, 2011. A stipulation of dismissal with
prejudice was filed with the Supreme Court of the State of New York
dismissing all claims against the Company and Manhattan in connection with
that litigation. |
|
Cash
|
$ |
144,000 |
|
|
Less: Transaction
costs |
|
(20,772 |
) |
|
|
|
|
|
|
Total gain on sale
|
$ |
123,228 |
|
|
(b) |
Kentucky Project |
|
|
|
|
|
Kentucky entered into a settlement and release agreement
on August 27, 2013 with Pick & Shovel Mining ("Pick & Shovel") and
Roger and Jacqueline Stacy pursuant to which in consideration of a cash
settlement payment and transfer of certain equipment by Kentucky to Pick
& Shovel, the parties resolved to waive and release any claims
relating to a prior claim between the parties. In addition, Kentucky
relinquished any interest in a bond posted on Permit No. 919-0066 and Pick
& Shovel agreed to be solely responsible for such Permit and all
related claims and issues asserted by the Kentucky Energy and Environment
Cabinet. |
|
Consideration
paid |
|
|
|
|
Cash |
$ |
8,000 |
|
|
|
|
|
|
|
Net liabilities settled |
|
|
|
|
Reclamation bond |
|
178,700 |
|
|
Equipment |
|
20,158 |
|
|
Accounts payable and accrued liabilities |
|
(145,000 |
) |
|
Asset retirement obligation |
|
(109,949 |
) |
|
Long-term debt |
|
- |
|
|
Total net liabilities settled |
|
(56,091 |
) |
|
|
|
|
|
|
Total gain on settlement |
$ |
48,091 |
|
![](smlogo.jpg)
- 8 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
5. |
Exploration and Evaluation Expenditures on Mineral
Properties (Continued) |
|
|
|
During the three and nine months ended October 31, 2014
and 2013, the Company's exploration and evaluation expenditures were as
follows: |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
October 31, |
|
|
October 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Fondaway Canyon and Dixie-Comstock
Projects |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property acquisition costs |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
35,000 |
|
|
Consulting, wages and salaries |
|
- |
|
|
(18,750 |
) |
|
- |
|
|
19,711 |
|
|
Travel |
|
- |
|
|
1,216 |
|
|
- |
|
|
5,714 |
|
|
Office and general |
|
- |
|
|
1,118 |
|
|
- |
|
|
3,148 |
|
|
|
$ |
- |
|
$ |
(16,416 |
) |
$ |
- |
|
$ |
63,573 |
|
|
Kentucky Project |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office and general |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
20,102 |
|
|
Depreciation |
|
- |
|
|
- |
|
|
- |
|
|
3,558 |
|
|
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
23,660 |
|
|
Total exploration activities |
$ |
- |
|
$ |
(16,416 |
) |
$ |
- |
|
$ |
87,233 |
|
6. |
Accounts Payable and Accrued
Liabilities |
|
|
|
As at |
|
|
As at |
|
|
|
|
October 31, |
|
|
January 31, |
|
|
|
|
2014 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Trade payables |
$ |
25,595 |
|
$ |
18,375 |
|
|
Accrued liabilities |
|
28,711 |
|
|
17,542 |
|
|
|
|
|
|
|
|
|
|
|
$ |
54,306 |
|
$ |
35,917 |
|
7. |
Note Payable |
|
|
|
On September 30, 2014, the Company entered into a
promissory note arrangement (the "Note") for the purposes of covering
accounting fees, whereby the Company borrowed CDN $13,452 from C. Marrelli
Services Ltd., which controls 278,960,559 common shares of the Company and
is 100% owned by Carmelo Marrelli. The Note is unsecured, bears interest
at a rate of 2% per annum and is due on demand. |
![](smlogo.jpg)
- 9 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
8. |
Share Capital |
|
|
|
(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
October 31, 2013 |
|
83,953,825 |
|
$ |
28,104,264 |
|
|
Balance, January 31, 2014 and
October 31, 2014 |
|
920,835,502 |
|
$ |
28,273,230 |
|
9. |
Stock Options |
|
|
|
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 nine months ended October 31, 2014 and
2013: |
|
|
|
Number of |
|
|
Weighted Average |
|
|
|
|
Stock Options |
|
|
Exercise Price |
|
|
Balance, January
31, 2013 |
|
3,800,000 |
|
$ |
0.27 |
|
|
Forfeited |
|
(950,000 |
) |
$ |
0.28 |
|
|
Balance, October 31, 2013 |
|
2,850,000 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
Balance, January
31, 2014 |
|
2,350,000 |
|
$ |
0.25 |
|
|
Forfeited |
|
(2,200,000 |
) |
$ |
0.26 |
|
|
Expired |
|
(150,000 |
) |
$ |
0.10 |
|
|
Balance, October 31, 2014 |
|
- |
|
$ |
- |
|
![](smlogo.jpg)
- 10 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
10. |
Basic and Diluted Loss Per Share |
|
|
|
The following table sets forth the computation of basic
and diluted loss per share: |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
October 31, |
|
|
October 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income for
the period |
$ |
(2,550 |
) |
$ |
40,418 |
|
$ |
(43,189 |
) |
$ |
(201,489 |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding for basic (loss) income per share |
|
920,835,502 |
|
|
83,953,825 |
|
|
920,835,502 |
|
|
83,953,825 |
|
|
Weighted average number of common shares outstanding for diluted (loss) income per share |
|
920,835,502 |
|
|
83,953,825 |
|
|
920,835,502 |
|
|
83,953,825 |
|
|
Basic (loss) income per share |
$ |
(0.00 |
) |
$ |
0.00 |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
|
Diluted (loss) income per share |
$ |
(0.00 |
) |
$ |
0.00 |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
|
The stock options were not included in the computation of
diluted (loss) income per share on October 31, 2013 as their inclusion
would be anti-dilutive. |
|
|
11. |
Related Party Transactions and Balances |
|
|
|
Remuneration of Directors and key management personnel of
the Company was as follows: |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
October 31, |
|
|
October 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits paid to directors and
officers (1) |
$ |
-
|
|
$ |
68,502 |
|
$ |
-
|
|
$ |
202,516 |
|
|
Share-based
payments |
$ |
- |
|
$ |
17,871 |
|
$ |
- |
|
$ |
16,400 |
|
(1) 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 nine months ended
October 31, 2013 were $45,112 and $135,146 and $20,223 and $65,668,
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 nine months ended October 31, 2014 (three and nine months
ended October 31, 2013 - $nil and $1,519, respectively).
![](smlogo.jpg)
- 11 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
11. |
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 $2,392 and $8,705, respectively, for
the three and nine months ended October 31, 2014 (three and nine months
ended October 31, 2013 - $nil). As at October 31, 2014, Marrelli Support
was owed $2,658 and this amount was included in accounts payable and
accrued liabilities (January 31, 2014 - $nil). |
|
|
|
During the three and nine months ended October 31, 2014,
the Company incurred fees totaling $203 and $615, respectively (three and
nine months ended October 31, 2013 - $nil) for filing services received
from DSA Filing Services ("DSA"). Carmelo Marrelli is an officer and
shareholder of DSA. As at October 31, 2014, DSA was owed $267 and this
amount was included in accounts payable and accrued liabilities (January
31, 2014 - $nil). |
|
|
|
At October 31, 2014, a note payable of $11,935 (CDN
$13,452) (January 31, 2014 - $nil) is owed to C. Marrelli Services Ltd.
for advances to cover accounting fees. The Note is unsecured, bears
interest at 2% per annum and is due on demand (note 7). |
|
|
|
During the three and nine months ended October 31, 2014,
the Company incurred fees totaling $480 and $19,803, respectively, (three
and nine months ended October 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
$19,280 is included in accounts payable and accrued liabilities at October
31, 2014 (January 31, 2014 - $nil). |
|
|
|
During the three and nine months ended October 31, 2014,
the Company incurred fees totaling $1,362 and $2,734, respectively (three
and nine months ended October 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
$2,662 is included in accounts payable and accrued liabilities at October
31, 2014 (January 31, 2014 - $nil). |
|
|
|
To the knowledge of the directors and senior officers of
the Company, as at October 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.
![](smlogo.jpg)
- 12 -
Royal Standard Minerals Inc. |
Notes to Condensed Interim Consolidated Financial
Statements |
(Expressed in United States Dollars) |
October 31, 2014 |
(Unaudited) |
12. |
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 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. |
|
|
13. |
General and
Administrative |
|
|
|
Three Months Ended |
|
|
Nine
Months Ended |
|
|
|
|
October 31, |
|
|
October 31, |
|
|
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
|
Corporate development |
$ |
(662 |
) |
$ |
1,241 |
|
$ |
912 |
|
$ |
10,989 |
|
|
Insurance |
|
- |
|
|
7,797 |
|
|
- |
|
|
21,978 |
|
|
Office and general |
|
484 |
|
|
3,247 |
|
|
2,029 |
|
|
24,702 |
|
|
Professional fees |
|
1,366 |
|
|
71,084 |
|
|
37,476 |
|
|
(34,801 |
) |
|
Wages and salaries (Note 11) |
|
- |
|
|
68,501 |
|
|
- |
|
|
202,515 |
|
|
Share-based payments (Note 11) |
|
- |
|
|
17,871 |
|
|
- |
|
|
16,400 |
|
|
Travel |
|
- |
|
|
8,382 |
|
|
38 |
|
|
21,893 |
|
|
Consulting fees
(Note 11) |
|
1,362 |
|
|
- |
|
|
2,734 |
|
|
- |
|
|
|
$ |
2,550 |
|
$ |
178,123 |
|
$ |
43,189 |
|
$ |
263,676 |
|
14. |
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 |
![](smlogo.jpg)
- 13 -
ROYAL STANDARD MINERALS INC.
MANAGEMENTS DISCUSSION
AND ANALYSIS
THREE AND NINE MONTHS ENDED OCTOBER 31, 2014
Royal Standard Minerals Inc.
|
Managements Discussion and Analysis
|
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
This Management Discussion and Analysis (MD&A) is dated
December 10, 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 nine months ended
October 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. 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 nine months ended October 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.
The Companys is currently considered delinquent in its SEC filings until such
time as it files a Form 20-F Annual Report for the fiscal year ended January 31,
2014.
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 forward-looking 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 Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 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 October 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 Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
DESCRIPTION OF BUSINESS AND GOING CONCERN
The Companys business activities are currently restricted to
funding ongoing operations as a reporting issuer and to repaying 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 $43,189 during the nine months ended October 31, 2014 (nine months
ended October 31, 2013 - loss of $201,489) and has an accumulated deficit of
$39,236,316 (January 31, 2014 - accumulated deficit of $39,193,127). In
addition, the Company has a working capital deficiency of $54,840 at October 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 mineral property interests and its business activities are currently
restricted to funding ongoing operations as a reporting issuer and to repaying
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 Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
OVERALL PERFORMANCE
The Companys net loss for the nine months ended October 31,
2014 was $43,189 ($0.00 loss per share) and for the nine months ended October
31, 2013 was $201,489 ($0.00 loss per share), a decrease in net loss of
$158,300. The reduction in net loss relates mainly to a reduction of $87,233 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 $220,487, primarily as a result of lower office and general expenses, wages
and salaries, insurance, travel and share-based payments as a result of the
Company no longer having any active mineral exploration business operations.
During the nine months ended October 31, 2013, the Company also reported gains
pertaining to the sale of property interests and related assets, on the
dissolution of subsidiaries and on settlement and release. No such gains were
reported for the nine months ended October 31, 2014.
FINANCIAL PERFORMANCE
Nine months ended October 31, 2014, compared with nine
months ended October 31, 2013
The Companys net loss for the nine months ended October 31,
2014 was $43,189 ($0.00 loss per share) compared to $201,489 ($0.00 loss per
share) for the nine months ended October 31, 2013, on no revenue. The decrease
of $158,300 was principally the result of:
- Exploration and evaluation expenditures decreased by $87,233 to $nil for
the nine months ended October 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.
- Office and general expense decreased by $22,673 to $2,029 for the nine
months ended October 31, 2014, compared to the same period in 2013. The
decrease was the result of the Company no longer having any active mineral
exploration business operations.
- Wages and salaries decreased by $202,515 to $nil for the nine months ended
October 31, 2014, compared to the same period in 2013. The decrease was the
result of the Company no longer having any mineral exploration operations.
- Professional fees increased to $37,476 for the nine months ended October
31, 2014, compared to a recovery of $34,801 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.
- Share-based payments decreased by $16,400 to $nil for the nine months
ended October 31, 2014, compared to the same period in 2013. No share-based
payments were made in 2014.
- Impairment of marketable securities decreased by $29,999 to $nil for the
nine months ended October 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 Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
- Gain on sale of property interests and related assets decreased by
$123,228 to $nil for the nine months ended October 31, 2014, compared to the
same period in 2013. The decrease was the result of the sale of all mineral
property interests in the prior year.
- Gain on dissolution of subsidiaries decreased by $30,100 and gain on
settlement and release decreased by $48,091, to $nil for the nine months ended
October 31, 2014, compared to the same period in 2013. The decrease is a
result of these being one-time events.
- Foreign currency translation adjustment decreased by $31,286 to $nil for
the nine months ended October 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.
Three months ended October 31, 2014, compared with three
months ended October 31, 2013
The Companys net loss for the three months ended October 31,
2014 was $2,550 ($0.00 loss per share) compared to net income of $40,418 ($0.00
income per share) for the three months ended October 31, 2013, on no revenue.
The increase in net loss of $42,968 was principally the result of:
- Exploration and evaluation recovery decreased by $16,416 to $nil for the
three months ended October 31, 2014, compared to the same period in 2013. The
decrease was the result of the sale of all mineral property interests in the
prior year.
- Professional fees decreased to $1,366 for the three months ended October
31, 2014, compared to $71,084 for the same period in 2013. The decrease was
the result of the Company no longer having any active mineral exploration
business operations.
- Wages and salaries decreased by $68,501 to $nil for the three months ended
October 31, 2014, compared to the same period in 2013. The decrease was the
result of the Company no longer having any active mineral exploration business
operations.
- Share-based payments decreased by $17,871 to $nil for the three months
ended October 31, 2014, compared to the same period in 2013. No share-based
payments were made in 2014.
- Gain on sale of property interests and related assets decreased by
$123,228 to $nil for the three months ended October 31, 2014, compared to the
same period in 2013. The decrease was the result of the sale of all mineral
property interests in the prior year.
- Gain on dissolution of subsidiaries decreased by $30,100 and gain on
settlement and release decreased by $48,091, to $nil for the three months
ended October 31, 2014, compared to the same period in 2013. The decrease is a
result of these being one-time events.
6
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
SUMMARY OF QUARTERLY RESULTS
The following is a summary of selected financial information of
the Company for the quarterly periods indicated.
Three Months Ended |
Net Revenues
($) |
Net Income (Loss)
($) |
October 31, 2014 |
nil |
(2,550) |
(0.00) |
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 |
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 October 31, 2014, the Company had cash and cash
equivalents of $10,951. Cash used in operating activities was $17,791 for the
nine months ended October 31, 2014. During the nine months ended October 31,
2014, the Company experienced a net increase of $23,492 in non-cash working
capital items, which was due to a decrease in sundry receivables and prepaid of
$5,103 and increase in accounts payable and accrued liabilities of $18,389. Cash
provided by financing activities was $11,935 for the nine months ended October
31, 2014 due to a note payable advanced 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 October 31, 2014, the Company had cash and cash equivalents of $10,951
compared to $16,807 as at January 31, 2014, to settle current liabilities of
$66,241 compared to $35,917 as at January 31, 2014. The Company currently does
not have sufficient cash and cash equivalents to settle current liabilities
although creditors who are related to the Company have agreed to defer payment.
All of the Company's financial liabilities have contractual maturities of less
than 60 days and are subject to normal trade terms. The Company regularly
evaluates its cash position in an effort to maintain its liquidity.
7
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
There is no assurance that future equity or debt capital will
be available to the Company in the amounts or at the times desired, or on terms
that are acceptable to the Company, if at all. See Risk Factors below.
As at October 31, 2014 and the date of this MD&A, the
Company had 920,835,502 common shares issued and outstanding and no stock
options outstanding. The Companys liquidity risk with financial instruments is
minimal as any excess cash, when present, is deposited with a Schedule I
Canadian bank.
RELATED PARTY TRANSACTIONS
Remuneration of Directors and key management personnel of the
Company was as follows:
|
Three Months Ended
October
31,
|
Nine Months Ended
October
31,
|
2014
($) |
2013
($) |
2014
($) |
2013
($) |
Salaries and benefits paid to directors and officers
(1) |
nil |
68,502 |
nil |
202,516 |
Share-based payments |
nil |
17,871 |
nil |
16,400 |
(1) |
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 nine months ended October 31, 2013 were
$45,112 and $135,146 and $20,223 and $65,668,
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 nine months ended October 31, 2014 (three and nine months ended October 31,
2013 - $nil 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 $2,392 and $8,705, respectively, for the three and nine
months ended October 31, 2014 (three and nine months ended October 31, 2013 -
$nil). As at October 31, 2014, Marrelli Support was owed $2,658 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 Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
During the three and nine months ended October 31, 2014, the
Company incurred fees totaling $203 and $615, respectively (three and nine
months ended October 31, 2013 - $nil) for filing services received from DSA
Filing Services ("DSA"). Carmelo Marrelli is an officer and shareholder of DSA.
As at October 31, 2014, DSA was owed $267 and this amount was included in
accounts payable and accrued liabilities (January 31, 2014 - $nil).
At October 31, 2014, a note payable of $11,935 (CDN $13,452)
(January 31, 2014 - $nil) is owed to C. Marrelli Services Ltd. for advances to
cover accounting fees. The note is unsecured, bears interest at 2% per annum and
is due on demand.
During the three and nine months ended October 31, 2014, the
Company incurred fees totaling $480 and $19,803, respectively, (three and nine
months ended October 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 $19,280 is included in
accounts payable and accrued liabilities at October 31, 2014 (January 31, 2014 -
$nil).
During the three and nine months ended October 31, 2014, the
Company incurred fees totaling $1,362 and $2,734, respectively (three and nine
months ended October 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 $2,662 is included in accounts
payable and accrued liabilities at October 31, 2014 (January 31, 2014 - $nil).
To the knowledge of the directors and senior officers of the
Company, as at October 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.
9
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
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.
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. The Company is in
the process of assessing the impact of this pronouncement.
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.
10
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
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.
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 October
31, 2014 was a deficiency of $54,840 (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 $39,236,316 as at October 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 nine months ended
October 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
October 31, 2014, the Company had a cash balance of $10,951 (January 31, 2014 -
$16,807) to settle current liabilities of $66,241 (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.
11
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
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.
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:
12
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
|
(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 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 nine
months ended October 31, 2014 and 2013.
13
Royal Standard Minerals Inc. |
Managements Discussion and Analysis |
Three and Nine Months Ended October 31, 2014 |
Discussion Dated December 10, 2014 |
|
General and Administrative:
|
Three Months Ended
October
31,
|
Nine Months Ended
October
31,
|
2014
($) |
2013
($) |
2014
($) |
2013
($) |
Corporate development |
(662) |
1,241 |
912 |
10,989 |
Insurance |
- |
7,797 |
- |
21,978 |
Office and general |
484 |
3,247 |
2,029 |
24,702 |
Professional fees |
1,366 |
71,084 |
37,476 |
(34,801) |
Wages and salaries |
- |
68,501 |
- |
202,515 |
Share-based payments |
- |
17,871 |
- |
16,400 |
Travel |
- |
8,382 |
38 |
21,893 |
Consulting fees |
1,362 |
- |
2,734 |
- |
Total |
2,550 |
178,123 |
43,189 |
263,676 |
14
Exploration and Evaluation Expenditures on Mineral Properties:
|
Three Months Ended
October
31,
|
Nine Months Ended
October
31, |
2014
($) |
2013
($) |
2014
($) |
2013
($) |
Fondaway Canyon and Dixie-Comstock Projects |
|
|
|
|
Property acquisition costs |
- |
- |
- |
35,000 |
Consulting, wages and salaries |
- |
(18,750) |
- |
19,711 |
Travel |
- |
1,216 |
- |
5,714 |
Office and general |
- |
1,118 |
- |
3,148 |
Total Fondaway Canyon and Dixie- Comstock
Projects |
- |
(16,416) |
- |
63,573 |
|
Kentucky Project |
|
|
|
|
Office and general |
- |
- |
- |
20,102 |
Depreciation |
- |
- |
- |
3,558 |
Total Kentucky Project |
- |
- |
- |
23,660 |
|
Total exploration activities |
- |
(16,416) |
- |
87,233 |
15
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
October 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: December 11, 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
October 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: December 11, 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. |
Royal Standard Minerals (CE) (USOTC:RYSMF)
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