UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C. 20549
FORM10-K
ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
ForthefiscalyearendedOctober31,2011
or
TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934
For the transition period from ______________________ to ______________________
Commissionfilenumber:000-53575
Richland Resources Corp.
(Exactnameofregistrantasspecifiedinitscharter)
| Nevada | | 90-0787192 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
1513 Houston Street , Sulphur Springs, Texas 75482
(Addressofprincipalexecutiveoffices)
((903) 439-6400
(Registrant’s telephone number, including areacode)
SecuritiesregisteredpursuanttoSection12(b)oftheExchangeAct:None
Securities registered pursuant to Section 12(g) of the Exchange Act: CommonStock
Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct. YesNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. YesNo
Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheExchangeAct duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiretofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesSNo £
IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 ofthis chapter)during the preceding12months(offorsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).Yes £ NoS
IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-K(§229.405ofthischapter)isnot containedherein,andwillnotbecontained,tothebestoftheregistrant’sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company”in Rule12b-2 of theExchangeAct.
| Largeacceleratedfiler£ | Acceleratedfiler £ | Non-acceleratedfiler £ | Smallerreportingcompany S |
Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).YesSNo £
As ofFebruary 29, 2012 theaggregatemarket valueofthevotingandnon-votingcommonequityheldbynon-affiliatescomputedbyreferencetothepriceatwhichthecommonequitywaslastsold,ortheaveragebidandaskedpriceofsuchcommonequity,was$546.
As ofFebruary 29, 2012 theregistrant’soutstanding commonstockconsistedof5,456,400shares.
TABLE OF CONTENTS
| Item 1. Business | 1 |
| Item 1A. Risk Factors | 1 |
| Item 1B. Unresolved Staff Comments | 2 |
| Item 2. Properties | 2 |
| Item 3 Legal Proceedings | 2 |
| Item 4. Mine Safety Disclosures | 2 |
| | |
| PART II | 2 |
| | |
| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 2 |
| Item 6. Selected Financial Data | 3 |
| Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations | 3 |
| Item 7A. Quantitative and Qualitative Disclosures about Market Risk | 5 |
| Item 8. Financial Statements and Supplementary Data | 6 |
| Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure | 14 |
| Item 9A. Controls and Procedures | 14 |
| Item 9B. Other Information | 15 |
| | |
| PART III | 15 |
| | |
| Item 10. Directors, Executive Officers and Corporate Governance | 15 |
| Item 11. Executive Compensation | 17 |
| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 17 |
| Item 13. Certain Relationships and Related Transactions, and Director Independence | 18 |
| Item 14. Principal Accountant Fees and Services | 18 |
| | |
| PART IV | 19 |
| Item 15. Exhibits, Financial Statement Schedules | 19 |
PARTI
Item 1. Business
Forward Looking Statements
This annual report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.
As used in this annual report, the terms "we", "us" and "our" mean Richland Resources Corp., unless otherwise indicated.
All dollar amounts in this annual report refer to U.S. dollars unless otherwise indicated.
Business Overview
We were incorporated as a Nevada company on October 30, 2006 under the name Double Halo Corp., and later changed our name to Shengrui Resources Co. Ltd., and changed our name to Richland Resources Corp. in April 2011. Prior to the year ended October 31, 2010 we had been involved in the acquisition and exploration of oil and gas properties, and were subsequently engaged in the development of business interests in China with the goal of completing the acquisition of one or more operating companies in the mineral resource industry. Those activities were discontinued before the beginning of the year ended October 31, 2011, and the Company has been inactive. Control of the Company was acquired by Kenneth A. Goggans in March 2011.
Our business activities are directed by Kenneth A. Goggans, our President, Chief Executive Officer, and Director, and Max Elghandour, our Chief Financial Officer, Principal Accounting Officer and Treasurer. Messrs. Goggans and Elghandour also manage our operations.
Our common stock is quoted on the OTCQB under the symbol “RRCH”:
Uncertainties
We are an independant oil and natural gas companyin the development stage.Wehavenotgeneratedanyrevenuesfromourbusinessactivities,howeverweexpecttogeneraterevenuesintheforeseeablefuture.Sinceourinception,wehaveincurredoperationallosses,andwehavebeenissuedagoingconcernopinionbyourauditors.Ouroperations are financed through funding from a related party
Wearecurrentlypursuingfinancing through private offeringtofullyexecuteourbusinessplan,however,thereisnoassurancethatwewillbeabletoobtainthenecessaryfinancingtodoso.Accordingly,thereisuncertaintyaboutourabilitytocontinuetooperate.
Item1A. RiskFactors
Notrequired.
Item1B. Unresolved StaffComments
None.
Item2. Properties
Wedonotownorhaveanyrightstoacquireaninterestinanyoilandgaspropertiesormineralresourceproperties.
Ourexecutiveofficeislocatedat1513 Houston Street, Sulphur Springs, Texas 75482. Thisofficeisprovidedtousby Kenneth Goggans, our Chief Executive Officer and sole Director. AsofFebruary 1, 2011wehadnotenteredintoanyleaseagreementsforthisspace.
Item3. Legal Proceedings
Wearenotawareofanylegalproceedingstowhichweareaparty.Noneofourdirectors,officers,affiliates,anyownerofrecordorbeneficiallyofmorethan5%ofourvotingsecurities,oranyassociateofanysuchdirector,officer,affiliateorsecurityholderare(i)apartyadversetousinanylegalproceedings,or(ii)haveamaterialinterestadversetousinanylegalproceedings.Wearenotawareofany other legal proceedings that havebeen threatened against us.
Item4. Mine Safety Disclosures
Not applicable.
PARTII
Item5. Market for Registrant’s CommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities
Market Information
Our common stock is not traded on any exchange. Our common stock is quoted on the OTCQB under the trading symbol “RRCH”. Trading in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company's operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.
OTCQB securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTCQB securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTCQB issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
Our common stock became eligible for quotation on the OTC Bulletin Board on October 31, 2008; it was deleted from the OTC Bulletin Board and moved to the OTCQB on September 7, 2010. The following quotations reflect the high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. The high and low bid quotations of our common stock for the periods indicated below are as follows:
| OTC Bulletin Board / OTCQB |
| Quarter Ended | High ($) | Low ($) |
| October 31, 2011 | * | * |
| July 31, 2011 | * | * |
| April 30, 2011 | * | * |
| January 31, 2011 | * | * |
| October 31, 2010 | 1.25 | 0.25 |
| July 31, 2010 | 1.25 | 1.25 |
| April 30, 2010 | 1.50 | 1.05 |
| January 31, 2010 | 1.05 | 1.01 |
* There were no trading activities during this period
Holders
As of January 25, 2012 there were approximately 52 holders of record of our common stock. We do not believe that a significant number of beneficial owners hold their shares of our common stock in street name.
We have historically notpaiddividendsonourcommonstockandwedonotexpecttodeclareorpaydividendsonsharesof our common stock for the foreseeablefuture.We intend to retain earnings, if any, to finance the development and expansion ofourbusiness.OurfuturedividendpolicywillbesubjecttothediscretionofourBoardofDirectorsandwilldependuponourfutureearnings,ifany,ourfinancialcondition,andotherfactorsdeemedrelevantbytheBoard.
Equity Compensation Plans
Asof [Filing Date]wedidnothaveanyequitycompensationplans.
RecentSalesofUnregisteredSecurities
Duringthe fiscalyearendedOctober31,2011wedidnotcompleteanyunreportedsalesofourequitysecuritiesthatwerenotregisteredundertheSecuritiesAct.
Item6. Selected Financial Data
Notapplicable.
Item7. Management's Discussion and Analysis of FinancialConditionandResultsofOperations
Thefollowingdiscussionshouldbereadinconjunctionwithourfinancialstatements,includingthenotesthereto,appearingelsewhereinthisannualreport. Thediscussionsofresults,causesandtrendsshouldnotbeconstruedtoimplyanyconclusionthattheseresultsortrendswillnecessarilycontinueintothefuture.
ResultsofOperations
Revenues
Wehavelimitedoperationalhistory.FromourinceptiononOctober30,2006toOctober31,2011wedidnotgenerateanyrevenues.AsofOctober31,2011wehadnoassetsandtotalliabilitiesof$49,763. Weanticipatethatwewillincurlossesintheforeseeablefutureandourabilitytogeneraterevenuesinthenext12monthscontinuestobeuncertain.
Expenses
FromourinceptiononOctober30,2006toOctober31,2011weincurredtotalexpensesof$834,943,including$13,500inmanagementfees,$13,500inrent,$349,403inprofessionalfees,$449,550instock-basedcompensation,$4,302inforeignexchangelosses,$647inbankchargesandinterestand$4,040ingeneralandadministrativeexpenses.Wealsoreceived$36,000intheformofagainonthesettlementofdebt,wroteoff$25,000inoilandgasexplorationcostsbecauseweallowedourinterestinapropertylocatedinWorsley,Albertatoexpireandwroteoff$20,000inexplorationadvancesaswedeterminedthatitwasnotfeasibletocontinueexploringanddevelopingtheoilandgaspropertiesinwhichweheldaninterest.
DuringthefiscalyearendedOctober31,2011weincurredtotalexpensesof$49,763inprofessionalfees
DuringthefiscalyearendedOctober31,2010weincurredtotalexpensesof$68,617including$68,298inprofessionalfees and $319 in general and administrative expenses.Wealsoreceived$36,000intheformofagainonthesettlementofdebtandwroteoff$20,000inexplorationadvancesaswedeterminedthatitwasnotfeasibletocontinueexploringanddevelopingtheoilandgaspropertiesinwhichweheldaninterest.
Our general and administrative expenses consisted primarily generaloffice expenses.Ourprofessionalfeesincludelegal,accountingandauditingfees.
NetLoss
FromourinceptiononOctober30,2006toOctober31,2011weincurredanetlossof$843,942.DuringthefiscalyearendedOctober31,2011weincurredanetlossof$49,763andanetlosspershareof$0.01.DuringthefiscalyearendedOctober31,2010weincurredanetlossof$68,617andanetlosspershareof$0.01.
LiquidityandCapitalResources
AsofOctober31,2011wehadnocashorassets,$49,763incurrentliabilitiesandaworkingcapitaldeficitof$49,763.AsofOctober31,2011wehadanaccumulateddeficitof$843,843.
From our inception on October 30, 2006 until the change of control on March 9, 2011 weweresolelydependentonthefundsraisedthroughourequityfinancing however, subsequent to the change of control, the company was financed by a company under common ownership.Ournetlossof$843,942fromourinceptiononOctober30, 2006toOctober31,2011wasfundedbyequityfinancing and funding from related parties.
We are currently in the process of negotiating a farmout agreement with two independent mineral owners, on which we plan to drill our first four wells. Ourplansforthenext12monthsare to drill six wells at a total cost of approximately $26.5 Millionweestimatethatwewillspendapproximately$1.8 milliononongeneralandadministrativeexpenses. Ourgeneralandadministrativeexpensesfortheyearwillconsist of salaries and wages, professional fees, investor relations expenses, rent, utilities and gerneral office expensesTheprofessionalfeesarerelatedtomaintainingourstatusasapubliccompany,particularlyourregulatoryfilingsthroughouttheyear,aswellasthecompletionofanyfinancingandtheacquisitionofanycompanyinwhichwemayacquireaninterest.
Weintendtoraiseourcashrequirementsforthenext12monthsfromprivateplacements,loansfromrelatedpartiesorpossiblyaregisteredpublicoffering(eitherself-underwrittenorthroughabroker-dealer).Ifweareunsuccessfulinraisingenoughmoneythroughsuchefforts,wemayreviewotherfinancingpossibilitiessuchasbankloans. Atthistimewedonothaveacommitmentfromanybroker-dealertoprovideuswithfinancing.Thereisnoassurancethatanyfinancingwillbeavailabletousorifavailable,ontermsthatwillbeacceptabletous.
Eventhoughweplantoraisecapitalthroughequityordebtfinancing,webelievethatthelattermaynotbeaviablealternativeforfundingouroperationsaswedonothavetangibleassetstosecureanysuchfinancing.Weanticipatethatanyadditionalfundingwillbeintheformofequityfinancingfromthesaleofourcommonstock.However,wedonothaveanyfinancingarrangedandwecannotprovideanyassurancethatwewillbeabletoraisesufficientfundsfromthesaleofourcommonstocktofinanceouroperationsoractivities.Intheabsenceofsuchfinancing,wewillnotbeablecompleteanybusinessacquisitionsandwemaybeforcedtoceaseourlimited operations.
Wealsohopetoobtainfinancingaspartofanyacquisitionagreementthatwemayultimatelynegotiate.However,thereisnoguaranteethatwewillenterintoadefinitiveacquisitionagreement,andifwesuccessfullycompleteanacquisitionourcapitalrequirementsandbusiness plans maychangesubstantially.
Going Concern
OurfinancialstatementsforthefiscalyearendedOctober31,2011havebeenpreparedonagoingconcernbasisandcontainanadditionalexplanatoryparagraphinNote1whichidentifiesissuesthatraise substantialdoubtaboutourabilitytocontinueasagoingconcern.Our financial statements do not include any adjustments that might result from the outcome ofthis uncertainty.
Wehavenotgeneratedanyrevenues,haveachievedlossessinceourinception,andreliedonthesaleofsecuritiestofundourOperations until our change of control on March 9, 2011, for the remainder of the year ended October 31, 2011 the company was funded by a related party.Wemaynotgenerateanyrevenuesevenifwesuccessfullycompletetheacquisitionofoneormoreoperatingcompanies,andwearedependentonobtainingoutsidefinancinginordertomaintainouroperationsandcontinueouractivities. Ifweareunabletoraiseequityorsecurealternativefinancing,wemaynotbeabletocontinueouroperationsandourbusinessmayfail.
Ifouroperationsandcashflowimprove,managementbelievesthatwecancontinuetooperate.However,noassurancecanbegiventhatmanagement'sactionswillresultinprofitableoperationsoranimprovementinourliquiditysituation.Thethreatofourabilitytocontinueasagoingconcernwillceasetoexistonlywhenourrevenueshavereachedalevelabletosustainourbusinessoperations.
Off-Balance Sheet Arrangements
Wehavenosignificantoff-balancesheetarrangementsthathaveorarereasonablylikelytohaveacurrentorfutureeffectonourfinancialcondition,revenuesorexpenses,resultsofoperations,liquidity,capitalexpendituresorcapitalresourcesthatarematerialtostockholders.
Critical Accounting Policies
Ourfinancialstatementsareaffectedbytheaccountingpoliciesusedandtheestimatesandassumptionsmadebymanagementduringtheir preparation.AcompletesummaryofthesepoliciesisincludedinNote2ofthenotestoourfinancialstatements.Wehaveidentifiedbelowtheaccountingpoliciesthatareofparticularimportanceinthepresentationofourfinancialposition,resultsofoperationsandcashflows,andwhichrequiretheapplicationofsignificantjudgmentbymanagement.
Based on our current level of operating activities, our critical accounting policies are limited to estimating liabilities and costs incurred. As of October 31, 2011, we had no cash accounts with any banks, and accordingly, our operating costs are funded by a company under common ownership. We record liabilities to the company under common ownership based on those charges incurred on our behalf.
Item7A. Quantitative and Qualitative Disclosures about Market Risk
Notrequired.
Item8. Financial Statementsand Supplementary Data
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Richland Resources Corporation
We have audited the accompanying balance sheet of Richland Resources Corporation (the “Company”), a company in the development stage, as of October 31, 2011, and the related statements of operationsand comprehensive loss, cash flows and changes in stockholders’ deficit for the year then ended and for the period from October 30, 2006 (inception) through October 31, 2011. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Company for the period from October 30, 2006 (inception) through October 31, 2010, were audited by other auditors whose report, dated March 23, 2011, on those financial statements included an explanatory paragraph that expressed substantial doubt about the Company's ability to continue as a going concern.The cumulative statements of operationsand comprehensive loss, cash flows and changes in stockholders’ deficit for the period from October 30, 2006 (inception) to October 31, 2011 include amounts for the period from October 30, 2006 (inception) to October 31, 2010, which were audited by other auditors, and our opinion, insofar as it relates to the amounts included for the period from October 30, 2006 (inception) through October 31, 2010, is based solely on the report of other auditors.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Richland Resources Corporation as of October 31, 2011, and the results of its operations and its cash flows for the year then ended and for the period from October 30, 2006 (inception) through October 31, 2011, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and its total liabilities exceeds its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Hein & Associates LLP
Dallas, Texas
February 29, 2012
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Richland Resources Corporation
(formerly Shengrui Resources Co. Ltd.)
We have audited the accompanying balance sheet of Richland Resources Corporation (formerly Shengrui Resources Co. Ltd.) (the “Company”) as of October 31, 2010 and the related statements of operations and comprehensive loss, stockholders' equity and cash flows for the year ended October 31, 2010. The Company’s management isresponsible for these financial statementsbased on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements, assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positionof the Company as of October 31, 2010, and the results of its operations and its cash flowsfor the year then ended in conformity with accounting principlesgenerally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has generated negative cash flows from operating activities during the year ended October 31, 2010, and the Company has an accumulated deficit of $794,179 for the year ended October 31, 2010. This raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
“DAVIDSON & COMPANY LLP”
| Vancouver, Canada | Chartered Accountants |
| | |
| March 23, 2011 | |
RICHLAND RESOURCES CORP.
(FormerlyShengrui Resources Co. Ltd.)
(A Development Stage Company)
BALANCE SHEETS
(ExpressedinUSDollars)
AsofOctober31
| | | 2011 | | | 2010 | |
| ASSETS | | $ | - | | | $ | - | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Current | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | - | | | $ | 68,956 | |
| Due to related parties | | | 49,763 | | | | 102,500 | |
| Total current liabilities | | | 49,763 | | | | 171,456 | |
| | | | | | | | | |
| STOCKHOLDERS' DEFICIT | | | | | | | | |
| Capital stock (100,000,000 shares authorized, $0.0001 par value, 5,456,400 shares issued and outstanding) | | | 546 | | | | 546 | |
| Additional paid-in capital | | | 793,633 | | | | 622,177 | |
| Deficit accumulated during the development stage | | | (843,942 | ) | | | (794,179 | ) |
| Total stockholders’ deficit | | $ | (49,763 | ) | | $ | (171,456 | ) |
The accompanying notes are an integral part of these financial statements.
RICHLAND RESOURCES CORP.
(FormerlyShengrui Resources Co. Ltd.)
(A Development Stage Company)
STATEMENTSOFOPERATIONSANDCOMPREHENSIVELOSS
(ExpressedinUSDollars)
| | | Period from
October 30, 2006 (inception) through
October 31, | | | Years Ended October 31, | |
| | | 2011 | | | 2011 | | | 2010 | |
| | | | | | | | | | |
| Expenses | | | | | | | | | | | | |
| Bank charges and interest | | $ | 647 | | | $ | - | | | $ | - | |
| General and administrative expenses | | | 4,040 | | | | - | | | | 319 | |
| Foreign exchange loss | | | 4,302 | | | | - | | | | - | |
| Management fees | | | 13,500 | | | | - | | | | - | |
| Rent | | | 13,500 | | | | - | | | | - | |
| Professional fees | | | 349,403 | | | | 49,763 | | | | 68,298 | |
| Stock-based compensation | | | 449,550 | | | | - | | | | - | |
| | | | 834,942 | | | | 49,763 | | | | 68,617 | |
| Loss before other items | | | (834,942 | ) | | | | | | | (68,617 | ) |
| Other items | | | | | | | | | | | | |
| Write-off of exploration advances | | | (20,000 | ) | | | - | | | | - | |
| Write-off of exploration costs | | | (25,000 | ) | | | - | | | | - | |
| Gain on settlement of debt | | | 36,000 | | | | - | | | | - | |
| Net loss and comprehensive loss for the period | | $ | (834,942 | ) | | $ | (49,763 | ) | | $ | (68,617 | ) |
| | | | | | | | | | | | | |
| Loss per share | | | | | | | (0.01 | ) | | | (0.01 | ) |
| Basic | | | | | | | 5,456,000 | | | | 5,456,000 | |
| Weighted average number of shares outstanding | | | | | | | | | | | | |
Theaccompanyingnotesareanintegralpartofthesefinancialstatements.
RICHLAND RESOURCES CORP.
(FormerlyShengrui Resources Co. Ltd.)
(A Development Stage Company)
STATEMENTSOFCASHFLOWS
(ExpressedinUSDollars)
| | | Period from
October 30,
2006 inception) to | | | Year ended | | | Year ended | |
| | | October 31,
2011 | | | October 31,
2011 | | | October 31,
2010 | |
| | | | | | | | | | | | | |
| Cash flow from operating activities | | | | | | | | | | | | |
| Net loss and comprehensive loss for the period | | $ | (843,942 | ) | | $ | (49,763 | ) | | $ | (68,617 | ) |
| Add back non-cash operating activities: | | | | | | | | | | | | |
| Donated rent | | | 13,500 | | | | - | | | | -- | |
| Donated services | | | 13,500 | | | | - | | | | -- | |
| Write-off of exploration advances | | | 20,000 | | | | - | | | | -- | |
| Consulting fees | | | 25,930 | | | | - | | | | -- | |
| Gain on settlement of debt | | | (36,000 | ) | | | - | | | | -- | |
| Stock-based compensation | | | 449,550 | | | | - | | | | - | |
| Write-off of exploration costs | | | 25,000 | | | | - | | | | - | |
| Changes in non-cash working capital | | | | | | | | | | | | |
| Exploration advances | | | (20,000 | ) | | | - | | | | - | |
| Accounts payable | | | 104,956 | | | | - | | | | 11,226 | |
| Due to related parties | | | 106,835 | | | | 49,763 | | | | 57,072 | |
| Net cash used in operating activities | | | (140,671 | ) | | | -- | | | | (319 | ) |
| Cash flow from investing activities | | | | | | | | | | | | |
| Acquisition of oil and gas properties | | | (50,930 | ) | | | - | | | | -- | |
| Net cash used in investing activities | | | (50,930 | ) | | | - | | | | - | |
| Cash flow from financing activities | | | | | | | | | | | | |
| Advances from related parties | | | 91,511 | | | | - | | | | -- | |
| Capital stock subscribed | | | 71,660 | | | | - | | | | - | |
| Proceeds from the issuance of capital stock | | | 42,780 | | | | - | | | | - | |
| Repurchase of capital stock | | | (14,350 | ) | | | - | | | | - | |
| Net cash provided by financing activities | | | 191,601 | | | | - | | | | -- | |
| Net change in cash during the period | | | - | | | | - | | | | (319 | ) |
| Cash, beginning of the period | | | - | | | | - | | | | 319 | |
| Cash, end of the period | | $ | - | | | $ | - | | | $ | - | |
Theaccompanyingnotesareanintegralpartofthesefinancialstatements.
RICHLAND RESOURCES CORP.
(FormerlyShengrui Resources Co. Ltd.)
(An Exploration Stage Company)
STATEMENTSOF CHANGES INSTOCKHOLDERS'DEFICIT
(ExpressedinUSDollars)
| | | Common Stock | | | | Additional Paid | | | | Deficit Accumulated
during the Development | | | | Total Stockholders’ | |
| | | Shares | | | | Amount | | | | in Capital | | | | Stage | | | | Deficit | |
| Balances, November 1, 2009 | | | 5,456,400 | | | $ | 546 | | | $ | 622,177 | | | $ | (725,562 | ) | | $ | (102,839 | ) |
| Net loss | | | - | | | | - | | | | - | | | | (68,617 | ) | | | (68,617 | ) |
| Balances, October 31, 2010 | | | 5,456,400 | | | | 546 | | | | 622,177 | | | | (794,179 | ) | | | (171,456 | ) |
| Assumption of liabilities by related party | | | - | | | | - | | | | 68,956 | | | | - | | | | 68,956 | |
| Extinguishments of related party debt | | | - | | | | - | | | | 102,500 | | | | - | | | | 102,500 | |
| Net loss | | | - | | | | - | | | | - | | | | (49,763 | ) | | | (49,763 | ) |
| Balances, October 31, 2011 | | | 5,456,400 | | | $ | 546 | | | $ | 793,633 | | | $ | (843,942 | ) | | $ | (49,763 | ) |
Theaccompanyingnotesareanintegralpartofthesefinancialstatements.
1. NATURE OF OPERATIONS AND GOING CONCERN
Richland Resources Corp. (formerly Shengrui Resources Co. Ltd. and Double Halo Resources Inc.) (the “Company”) was incorporated in the State of Nevada on October 30, 2006. The Company was considered an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting for Development Stage Enterprises”, until the change of control occurring on March 9, 2011. Since then the company is considered a development and production oil and natural gas company. The Company’s principal business was formerly the acquisition and exploration of natural resources. It is currently foucused on the acquisition, development and production of oil and natural gas.
Going Concern
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate substantial earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. As at October 31, 2011 the Company has accumulated losses of $843,942 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2.SIGNIFICANTACCOUNTINGPOLICIES
Basisofpresentation
ThesefinancialstatementsandrelatednotesarepresentedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates,andareexpressedinUSdollars. TheCompany’sfiscalyear-endisOctober31.
Use of estimates
ThepreparationoffinancialstatementsinconformitywithUSgenerallyacceptedaccountingprinciplesrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenuesandexpensesduringthereportingperiod.TheCompanyregularlyevaluatesestimatesandassumptionsrelatedtodonatedservicesanddeferredincometaxassetvaluationallowances.The Companybasesitsestimatesandassumptionsoncurrentfacts,historicalexperienceandvariousotherfactorsthatitbelievestobereasonableunderthecircumstances,theresultsofwhichformthebasisformakingjudgmentsaboutthecarryingvaluesofassetsandliabilitiesandtheaccrualofcostsandexpensesthatarenotreadilyapparentfromothersources.TheactualresultsexperiencedbytheCompanymaydiffermateriallyandadverselyfromtheCompany’sestimates.Totheextenttherearematerialdifferencesbetweentheestimatesandtheactualresults,futureresultsof operationswillbeaffected.
Losspershare
BasicEPSiscomputedbydividingnetincome(loss)availabletocommonshareholders(numerator)bytheweightedaveragenumber ofsharesoutstanding(denominator)duringtheperiod.DilutedEPSgiveseffecttoalldilutivepotentialcommonsharesoutstandingduringtheperiodusingthetreasurystockmethodandconvertiblepreferredstockusingtheif-convertedmethod. IncomputingdilutedEPS,theaveragestockpricefortheperiodisusedindeterminingthenumberofsharesassumedtobepurchased fromtheexerciseof stockoptionsorwarrants.DilutedEPSexcludesalldilutivepotentialsharesiftheireffectisantidilutive.AsatOctober31,2011and2010,theCompanydidnothaveanypotentiallydilutivesharesoutstanding.
Incometaxes
We are subject to U.S. federal income taxes along with state income taxes in Texas. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with theapplicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of operations.
Based on our analysis, we did not have any uncertain tax positions as of October 31, 2011 or 2010. We have never filed U.S. or Texas income tax returns.
We arerequiredtocomputetaxassetbenefitsfornetoperatinglossescarriedforward.Potentialbenefitsofincometaxlossesarenotrecognizedintheaccountsuntilrealizationismorelikelythannot. Potentialbenefitofnetoperatinglosseshavenotbeenrecognizedinthesefinancialstatementsbecausewe cannotbeassured thatitismorelikelythannotwe willutilizethenetoperatinglossescarriedforwardinfutureyears.
3.RELATEDPARTYTRANSACTIONS
AsatOctober31,2011,theCompanyisindebtedtocompanieswithdirectorsincommonfor $49,763(2010–$102,500),representingexpenditurespaidonbehalfoftheCompany.Thisamountisunsecured,non-interestbearing,dueondemandandhasnospecifictermsofrepayment.Includedinaccountspayableandaccruedliabilitiesis$ Nil(2010–14,110)accruedforaccountingfeesduetoacompanywithadirectorincommon.
DuringtheyearendedOctober31,2011,theCompanyincurred $7,000(2010–$25,200)foraccountingservices and general and administrative supportprovidedbyacompanywithdirectorsincommon.
4.DEFERREDINCOMETAXES
Deferredincometaxassetsandliabilitiesaredeterminedbasedupondifferencesbetweenfinancialreportingandtaxbasesofassetsandliabilitiesandaremeasuredusingtheenactedtaxratesandlawsthatwillbeineffectwhenthedifferencesareexpectedtoreverse. IncometaxexpensediffersfromtheamountthatwouldresultfromapplyingtheUSfederalandstateincometaxratestoearningsbeforeincometaxes. The Company has never filed a U.S. federal or state income tax returns. As a result, net operating loss carryforwards generated prior to the year ended October 31, 2011 may never be realized. Additionally, the use of net operating loss carryforwards generated prior to March 9, 2011 are limited by change in control provisions of the US Internal Revenue Code. Accordingly, management has disregarded all net operating loss carryforwards generated prior to November 1, 2010 for puposes of estimating its deferred tax assets and liabilities as of October 31, 2011.Deferred tax assets resulting from the Company’s netoperatinglosscarryforwardare reduced to zero by a full valuation allowance because theCompanycannotbeassuredthatitismorelikelythannotthatsuchbenefitwillbeutilizedinfutureyears.
TheCompanyissubjecttoUnitedStatesfederalandstateincometaxesatanapproximaterateof34%.ThereconciliationoftheprovisionforincometaxesattheUnitedStatesfederalstatutoryratecomparedtotheCompany’sincometaxexpenseasreportedisas
follows:
| | | October 31, 2011 | | | October 31, 2010 | |
| Income tax recovery at statutory rate | | $ | (16,919 | ) | | $ | (23,330 | ) |
| Items non deductible for tax purposes | | | - | | | | - | |
| Adjustments to the valuation allowance | | $ | 16,919 | | | $ | 23,330 | |
| Provision for income taxes | | $ | - | | | $ | - | |
Deferredincometaxesreflectthenettaxeffectsoftemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialreportingpurposesandtheamountsusedforincometaxpurposes.Deferredincometaxesarisefromtemporarydifferencesintherecognitionofincomeandexpensesforfinancialreportingandtaxpurposes.Thesignificantcomponentsofdeferredincometaxassetsandliabilitiesareasfollows:
| | | | October 31, 2011 | | | | October 31, 2010 | |
| Net operating loss carryforward | | $ | 16,919 | | | $ | 108,266 | |
| Valuation Allowance | | | (16,919 | ) | | | (108,266 | ) |
| Net deferred income tax asset | | $ | - | | | $ | - | |
TheCompanyhasrecognizedavaluationallowanceforthedeferredincometaxassetsincetheCompanycannotbeassuredthatitismorelikelythannotthatsuchbenefitwillbeutilizedinfutureyears.Thevaluationallowanceisreviewedannually.Whencircumstanceschangeandwhichcauseachangeinmanagement'sjudgmentabouttherealizabilityofdeferredincometaxassets,theimpactofthechangeonthevaluationallowanceisgenerallyreflectedincurrentincome.
5.SUBSEQUENTEVENTS
On January 9, 2012, the Company hired Max Elghandour as its Chief Financial Officer.
6.Restatement of Quarterly Filings (UNAUDITED)
During the preparation of our annual financial statements, we noted that we had erroneously recorded accounts payable assumed by our former parent company as a gain on settlement of liabilities, and that we had erroneously neglected to record operating expenses incurred on our behalf by related parties throughout our interim periods included in the year ended October 31, 2011. The following is a summary of interim periods included in the year ended October 31, 2011, as restated:
| | | As of or for the Three Months Ended | |
| | | January 31, 2011 | | | April 30, 2011 | | | July 31, 2011 | |
| Category: | | | | | | | | | | | | |
| Total liabilities, as previously reported | | $ | 28,655 | | | $ | 28,655 | | | $ | 28,655 | |
| Total liabilities, as restated | | | 28,655 | | | | 31,827 | | | | 37,996 | |
| | | | | | | | | | | | | |
| Total expenses, as previously reported | | | 9,877 | | | | — | | | | — | |
| Total expenses, as restated | | | 9,877 | | | | 21,950 | | | | 6,169 | |
| | | | | | | | | | | | | |
| Net income (loss), as previously reported | | | 26,191 | | | | — | | | | — | |
| Net loss, as restated | | | (9,877 | ) | | | (21,950 | ) | | | (6,169 | ) |
Item9.ChangesInandDisagreementswithAccountantsonAccountingandFinancialDisclosure
None.
Item9A.Controls andProcedures
Evaluation ofDisclosureControlsandProcedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities ExchangeActof1934(the"ExchangeAct"),thataredesignedtoensurethatinformationrequiredtobedisclosedbyusinthereportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintherulesandformsoftheSecuritiesandExchangeCommission(the“SEC”),andthatsuchinformationisaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficerandChiefFinancial Officer,asappropriatetoallowtimelydecisionsregardingrequireddisclosure.
Asoftheendoftheperiodcoveredbythisreport,ourmanagement,withtheparticipationofourChiefExecutiveOfficerandChiefFinancialOfficer,carriedoutanevaluationoftheeffectivenessofourdisclosurecontrolsandprocedures.Baseduponthisevaluation,our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective toensurethatinformationwearerequiredtodiscloseinthereportswefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintheSEC’srulesandforms.
ManagementReportonInternalControlOverFinancialReporting
Ourmanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontroloverfinancialreporting. UnderthesupervisionofourChiefExecutiveOfficerandChiefFinancialOfficer,weconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingasofOctober31,2011usingthecriteriaestablishedinInternal Control—Integrated FrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).
Amaterialweaknessisadeficiency,orcombinationofdeficiencies,ininternalcontroloverfinancialreporting,suchthatthereisareasonablepossibilitythatamaterialmisstatementofourannualorinterimfinancialstatementswillnotbepreventedordetectedonatimely basis.InourassessmentoftheeffectivenessofinternalcontroloverfinancialreportingasofOctober31,2011,wedeterminedthattherewerecontroldeficienciesthatconstitutedmaterialweaknesses,asdescribedbelow.
1. Certainentitylevelcontrolsestablishinga“toneatthetop”wereconsideredmaterialweaknesses.Wedo not have an auditcommittee, nor do wehaveformalpoliciesonfraudor acodeofethics.
2. Managementoverrideofexistingcontrolsispossiblegivenoursmallsizeandlackofpersonnel.
3. Wedonothaveasysteminplacetoreviewandmonitorinternalcontroloverfinancialreporting. Managementiscurrentlyevaluatingremediationplansfortheabovecontroldeficiencies.
4. We were unable to prepare our financial statements for the year ended October 31, 2011 in a timely manner.
Inlightoftheexistenceofthesecontroldeficiencies,weconcludedthatthereisareasonablepossibilitythatamterialmisstatementofourannualorinterimfinancialstatementswillnotbepreventedordetectedonatimelybasisbyourinternalcontrols. Asaresult,managementhasconcludedthatwedidnotmaintaineffectiveinternalcontroloverfinancialreportingasofOctober31,2011basedoncriteriaestablishedinInternal Control—Integrated FrameworkissuedbyCOSO.
ChangesinInternalControl
DuringthefiscalyearendedOctober31,2011therewerenochangesinourinternalcontroloverfinancialreporting(asdefinedinRule13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or arereasonably likely tomateriallyaffect, our internal controloverfinancialreporting.
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following table sets forth the name, age and position of our executive officers and directors as of March 25, 2011.
| Name | Age | Position |
| Kenneth A. Goggans | 31 | Chief Executive Officer and sole Director |
| Max Elghandour | 61 | Chief Financial Officer, Principal Accounting Officer, Treasurer |
Our current director will serve as such until our next annual shareholder meeting or until their successors are elected who accept the position. Our current executive officers hold their positions at the will of our Board of Directors. There are no arrangements, agreements or understandings between non-management security holders and management under which non-management security holders may directly or indirectly participate in or influence the management of our affairs.
Kenneth A. Goggans –Chief Executive Officer, Secretary, Director
Mr. Goggans has served as the Chief Executive Officer and sole director of Richland Resources since acquiring controlling interest in April 2011. Mr. Goggans has also served as Chief Executive Officer of Richland Resources Corporation, a Delaware corporation, since its formation in June 2010. Mr. Goggans had served as Chief Executive Officer of Manek Energy, Inc., a company that he founded in 2005 and which sold its primary operations to Weatherford International, Ltd. in February 2010. Mr. Goggans also serves as Chief Executive Officer of Manek Equipment Company, an oilfield equipment company that he founded in January 2008. Mr. Goggans holds a Bachelor of Arts degree in Business Administration and a Masters in Business Administration, each awarded by Texas Tech University, Lubbock, Texas.
Max Elghandour – Chief Financial Officer, Principal Accounting Officer, Treasurer
Mr. Elghandour, is the Chief Financial Officer of Richland Resources since January 2012. His career has spanned over 36 years in financial management, operations and accounting with over 25 years in the oil and gas Industry. His career has included assignments as the Vice President and Controller of Holly Corporation (HOC-NYSE) and Holly Energy Partners (HEP-NYSE). Prior to Holly, Mr. Elghandour held positions of Treasurer and Vice President of Xanser Corporation (XNR-NYSE), Vice President of Kaneb Pipeline Partners (KPP- NYSE) a midstream oil and Chief Financial Officer of Greka Energy Corporation.In his current capacity, Mr. Elghandour directs the financial strategy of Richland Resources and guides the financial execution of mergers and acquisitions for new projects and drilling opportunities. Mr. Elghandour is a unique financial executive who actively supports local charities and non-profits as a member of the non-profit Executives In Action (EAI) and actively participates as a mentor in the Professional Leadership Program at the University of North Dallas.
Other than as described above, none of our directors currently serve as a director of any other public company or any company registered as an investment company.
Significant Employees
There are no individuals other than our executive officers who make a significant contribution to our business.
Family Relationships
There are no family relationships among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Legal Proceedings
None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:
| · | any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| · | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| · | being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; |
| · | being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated; |
| · | any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business activity; |
| · | and judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions; or |
| · | any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization. |
Section 16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than ten percent (10%) of our common stock to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended October 31, 2011 our directors, executive officers and ten percent (10%) stockholders complied with all applicable filing requirements.
CodeofEthics
Wehavenotyetadoptedacodeofethicsthatappliestoourprincipalexecutiveofficer,principalfinancialofficer,principalaccountingofficerorcontroller,orpersonsperformingsimilarfunctionsbecausewehavenotyetfinalizedthecontentofsuchacode.CompanieswhoseequitysecuritiesarequotedontheOTCBulletinBoardorOTCQBarenotcurrentlyrequiredtoimplementacodeofethics.
AuditCommittee
OurBoardofDirectorshasdeterminedthatwedonothaveanauditcommitteefinancialexpertonourBoardcarryingoutthedutiesoftheauditcommittee.TheBoardhasdeterminedthatthecostofhiringafinancialexperttoactasadirectorandtobeamemberoftheauditcommitteeorotherwiseperformauditcommitteefunctionsoutweighsthebenefitsofhavinganauditcommitteefinancialexpertontheBoard.
NominatingCommittee
WedonothaveanominatingcommitteeandwehavenotundertakenanymaterialchangestotheproceduresbywhichsecurityholdersmayrecommendnomineestoourBoardofDirectorssinceourlastannualreport.
Item 11. Executive Compensation
None of our directors or executive officers has received any compensation from us during the fiscal year ended October 31, 2011. Pursuant to Item 402(a)(5) of Regulation S-K we have omitted all tables and columns since no compensation has been awarded to, earned by, or paid to these individuals
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors or a committee performing a similar function. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole determines executive compensation.
Compensation of Directors
We do not pay our sole director any fees for attendance at Board meetings or similar remuneration or reimburse him for any out-of-pocket expenses he incurs in connection with our business.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
We do not have any compensation plans or individual compensation arrangements under which our securities are authorized for issuance to either employees or non-employees.
The following table sets forth the ownership, as of January 25, 2011, of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of January 25, 2011, there were 5,456,400 shares of our common stock issued and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.
| Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |
| Common Stock | Kenneth Goggans 1513 Houston Street Sulphur Springs, TX 75482 | 3,780,000 | 69.3 |
| | Max Elghandour 1513 Houston Street Sulphur Springs, TX 75482 | - | - |
| All Officers and Directors as a Group | 3,780,000 | 69.3 |
| (1) | Kenneth A. Goggans is our President, Chief Executive Officer and our sole Director. |
| (2) | Max Elghandour is our Chief Financial Officer, Principal Accounting Officer and Treasurer. |
Changes in Control
There are no arrangements known to us the operation of which may, at a subsequent date, result in a change in our control.
Item 13. Certain Relationships and Related Transactions, and Director Independence
During the year ended October 31, 2011, we were indebted to Richland Resources Corporation, a Delaware corporation controlled by Kenneth A. Goggans, our Chief Executive Officer, for $49,763, representing expenditures paid on our behalf. This amount is unsecured, non-interest bearing, due on demand and has no specific terms of repayment.
Other than as described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Director Independence
The OTC Quotation Bureau, on which our common stock is quoted, does not have any director independence requirements. Our board has not taken action to define “independence” for purposes of service on our board. Mr. Goggans, who is our sole director, is also an executive officer and owns a controlling interest in our voting sock, and would not be deemed “independent” under current stock exchange definitions. As additional directors join our board, we intend to develop a definition of independence and evaluate our governance policy with respect to director independence.
Item14. Principal Accountant Fees andServices
Audit and Non-Audit Fees
The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditors, Hein and Company, LLP in connection with the audit of our financial statements for the year ended October 31, 2011, and the prior auditors, Davidson & Company LLP, in connection with the audit of our financial statements for the year ended October 31, 2010, and any other fees billed for services rendered by our auditors during these periods.
| Hein and Associates, LLP |
| Period from November 1, 2010 to October 31, 2011 |
| Audit fees | | $ | 13,571 | |
| Audit-related fees | | $ | -0- | |
| Tax fees | | $ | -0- | |
| All other fees | | $ | -0- | |
| Total | | $ | 13,571 | |
| Davidson & Company, LLP |
| Period from November 1, 2009 to October 31, 2011 |
| Audit fees | | $ | 20,000 | |
| Audit-related fees | | $ | 10,300 | |
| Tax fees | | $ | -0- | |
| All other fees | | $ | -0- | |
| Total | | $ | 30,300 | |
Sinceourinception,ourBoardofDirectors,performingthedutiesoftheauditcommittee,hasreviewedallauditandnon-auditrelatedfeesatleastannually.TheBoard,actingastheauditcommittee,pre-approvedallauditrelatedservicesfortheyearendedOctober31,2011.
PARTIV
Item15. Exhibits,FinancialStatement Schedules
(1) FinancialStatements
Seethe“IndextoConsolidatedFinancialStatements”setforthonpageF-1.
(2) FinancialStatement Schedules
None.Thefinancialstatementschedulesareomittedbecausetheyareinapplicableortherequestedinformationisshowninourfinancialstatementsorthenotesrelatedthereto.
| Exhibit Number | Exhibit Description |
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: February 29, 2012 | Richland Resources Corp. |
| | | |
| | | |
| | By: | /s/ Kenneth A. Goggans |
| | | Chief Executive Officer, Sole Director |
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Date: February 29, 2012 | By: | /s/ Kenneth A. Goggans |
| | | Chief Executive Officer, Sole Director |
| | | |
| Date: February 29, 2012 | | |
| | By: | /s/ Max Elghandour |
| | | Chief Financial Officer and Treasurer |
