UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

_______________

FORM 10-Q

____________

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 000-54257

POWDER RIVER COAL CORP.

(Name of small business issuer in its charter)

123 W. 1st Street, Suite 675

Casper, WY 82601

(Address of principal executive offices)

(307) 459-0571

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No ¨ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  x  No ¨   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨  No x 

As of January 17, 2014, there were 126,315,000 shares of the registrant’s $0.0000001 par value common stock issued and outstanding.

POWDER RIVER COAL CORPORATION*

TABLE OF CONTENTS  

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Powder River Coal Corp. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we,"”POWD,” "our," "us," the "Company," refers to Powder River Coal Corp.

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Part I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

POWDER RIVER COAL CORP.

(f/k/a Titan Holding Group, Inc.,)

(An Exploration State Company)

INDEX TO FINANCIAL STATEMENTS

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Powder River Coal Corp.

(f/k/a Titan Holding Group, Inc.,)

(A Development State Entity)

NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

Powder River Coal Corp. (f/k/a Titan Holdings Group, Inc. the “Company”), is a Florida corporation and was incorporated on October 9, 2009. The Company formerly provided marketing of KC 9000® primarily to independent producers, refiners of petroleum products and other market participants located in the Midwest of the United States of America (the “U.S.”). The Company is currently an exploration state company under the provisions of Accounting Standards Codification (ASC) No. 915, Development Stage Entities. Since inception, the Company has produced no revenues and will continue to report as an exploration state company until significant revenues are produced. The Company’s principal activity is the acquisition, exploration and development of mineral properties in the United States of America.

The Company’s success will depend in large part on its ability to obtain and develop mineral property interests within the United States. There can be no assurance that mineral properties obtained by the Company will contain reserves or that properties with reserves will be profitable to extract. The Company will be subject to local and national laws and regulations which could impact the Company’s ability to execute its business plan.

The Company is headquartered in Casper, Wyoming.

NOTE 2.  GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenue sufficient to cover its operating cost and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company.  In addition, profitability will ultimately depend upon the level of revenues received from business operations.  However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.  The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the Company’s opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2013 are not necessarily indicative of the results for the full fiscal year ending December 31, 2013.  While management of the Company believes that the disclosures presented herein and adequate and not misleading, these interim financial statements should be read in conjunction with the audited combined financial statements and the footnotes thereto for the periods ended December 31, 2012 filed in its annual report on Form 10-K. The Company is currently in the exploration state. All activities of the Company to date relate to its organization, initial funding and share issuances.  The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to exploration stage companies. An exploration-state company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

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USE OF ESTIMATES

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company accounts for cash and cash equivalents under FASB ASC 305 “Cash and Cash Equivalents” and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents totaled $4,398 and $27,232 at September 30, 2013 and December 31, 2012, respectively.

DEFERRED INCOME TAXES AND VALUATION ALLOWANCE

The Company accounts for income taxes under FASB ASC 740 “Income Taxes.” Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

SHARE-BASED EXPENSES

FASB ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

Share-based expense for the nine months ended September 30, 2013 and 2012 was $48,750 and $42,500, respectively.

Recently Issued Accounting Pronouncements

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. 

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We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

NOTE 4.  PREPAID EXPENSES

Prepaid expenses consisted of:

NOTE 5.  MINERAL PROPERTIES

On July 27, 2011, Powder River Coal Corp.(“Powder River” or the “Company”), formerly Titan Holdings Group, Inc., entered into a Property Purchase Agreement (the “Agreement”) with Powder River Coal Investments, Inc. (“PRCI”) a corporation maintaining its principal place of business at Wisniowy Business Park, Budynek E-ul, Ilzecka 26, Warsaw, 02-135, Poland. Pursuant to the Agreement, Powder River agreed to purchase from PRCI, certain leasehold interests relating to three (3) sections/parcels of property that include coal deposits and are located in Campbell County, Wyoming.

In exchange for acquisition of the leasehold interests, Powder River agreed to tender consideration to PRCI consisting of 3,360,000 shares of the Company’s common stock deliverable over a period of twenty-seven (27) months with a value of $60,000, as follows:  

As of September 30, 2013, 2,800,000 shares have been issued.

Additionally, PRCI will retain a 10% Net Smelter Returns Royalty (“NSR”) on the gross mineral production. Regarding coal, the royalty will be 10% of value received when delivered to rail head or truck loading facility. PRCI also will be paid an annual advance royalty of twenty thousand dollars ($20,000) per section ($60,000 total) as annual payment to keep leases in full force and effect. This payment is subject to an annual increase based on inflation. Finally, Powder will provide a payment to PRCI equal to the State of Wyoming annual $2/acre lease payment (due annually on February 1st) at least 60 days before the amount is due. If PRCI makes the payment on behalf of Powder River, double the amount is due back to PRCI within 30 days of notice or the lease is null and void. Notice must be served to the Company by PRCI.

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NOTE 6.  LEASEHOLD EXPENSES PAYABLE

Royalty

The Company is to pay an annual advance royalty of sixty thousand ($60,000) to keep the mineral property lease in effect.  The royalty payment is subject to an annual increase based on inflation and is due on the anniversary of the signing of the contract.  Royalty payable totals $123,653 and $60,000 at September 30, 2013 and December 31, 2012, respectively.

Other

Other leasehold expense payable totals $7,680 and $0 at  September 30, 2013 and December 31, 2012, respectively.  This amount is owed to PRCI for the State of Wyoming annual $2/acre lease payment.

Total leasehold expenses payable are $131,333 and $60,000 at September 30, 2013 and December 31, 2012, respectively. 

NOTE 7.  OTHER CURRENT LIABILITIES

Other current liabilities totaled $45,000 and $20,000 at September 30, 2013 and December 31, 2012.  The balance at September 30, 2013 consisted of $10,000 for the  mineral rights property and a $35,000 note payable with no repayment terms.

The balance of other current liabilities at December 31, 2012, consisted solely of $20,000 for the  mineral rights property acquisition.

NOTE 8.  RELATED PARTY TRANSACTIONS

Related party transactions totaled $7,203 at September 30, 2013 and December 31, 2012 and consisted of advances from the Company’s sole officer.

NOTE 9. SHAREHOLDERS' EQUITY (DEFICIT)

PREFERRED STOCK

The Company has 250,000,000 authorized preferred shares with a par value of $0.0000001 per share.  The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes.

There was one (1) preferred share issued and outstanding as of September 30, 2013 and December 31, 2012.

COMMON STOCK

The Company has 300,000,000 authorized common shares with a par value of $0.0000001 per share.  Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

There were 125,690,000 and 124,575,000 common shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively. 

During the period ended September 30, 2013, we issued the following amounts of common stock:

Stock issued for advisory services and employee compensation:

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Stock issued for cash:

·         On May 16, 2013, the Company entered into a Subscription Agreement with Evpatoria Holdings, Ltd., to issue 360,000 Units of the Company’s unregistered Securities at the aggregate price of $90,000 ($0.25 per Unit). Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment.  One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of May 16, 2013, at a price per Warrant Share of $1.25 per Warrant Share. 

WARRANTS

As of September 30, 2013, the Company has issued 1,760,000 warrants that remain outstanding. The following is a breakdown of the warrants:

The Company has no stock option plan or other potentially dilutive securities.

NOTE 8. COMMITMENTS AND CONTINGENCIES

WYOMING MINERAL PROPERTY

On July 27, 2011, Powder River Coal Corp. entered into a Property Purchase Agreement with Powder River Coal Investments, Inc. (“PRCI”) Under the terms of the agreement the Company will pay PRCI an annual advance royalty of twenty thousand dollars ($20,000) per section ($60,000 total) as annual payment to keep the leases in full force and effect. This payment is subject to an annual increase based on inflation. Finally, the Company will provide a payment to PRCI equal to the State of Wyoming annual $2/acre lease payment (due annually on February 1^st) at least 60 days before the amount is due. If PRCI makes the payment on behalf of the Company, double the amount is due back to PRCI within 30 days of notice or the lease is null and void. Notice must be served to the Company by PRCI.  

OFFICER AND DIRECTOR ARRANGEMENTS

On December 15, 2011, the Company hired two Advisors for the Advisory Committee.  The agreement provides for pro-rata payment of $1,000 per day for Advisory Board Meetings attendance.  Additionally, each advisor is granted 20,000 restricted common shares in advance for each quarter served from the signing of this agreement and until terminated by either party.  

On February 29, 2012, the Company entered into an employment agreement with a new Chairman of the Board of Directors.  The agreement automatically extends beyond the initial one-year term. The agreement provided for a monthly salary of $3,000 and 25,000 restricted common shares for each quarter served which are granted in arrears.  As of March 2013, the agreement was modified and no longer provides for a monthly salary of $3,000.

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NOTE 9.  SUBSEQUENT EVENTS

On October 30, 2013, the Company issued 560,000 shares of its restricted common stock, valued at $10,000, to Powder River Coal Investments,  per the terms of the Property Purchase Agreement (see Note 5).

On November 30, 2013, we issued 25,000 shares of restricted common stock, valued at $6,250, for employee compensation.

On December 14, 2013, we issued 40,000 shares of restricted common stock, valued at $10,000, for board of directors’ advisory services.

Management has evaluated subsequent events through the date the financial statements were issued.  Management is not aware of any other significant events that occurred subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.

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ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors, which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital

Cash Flows

Results of Operations for the three months ended September 30, 2013 and 2012.

Revenues

The Company has not generated any revenues from July 5, 2011 (date of exploration stage) through the period ended September 30, 2013.

Operating Expenses

The Company’s operating expenses for three months ended September 30, 2013 and 2012 were $64,638 and $91,001, respectively.   Operating expenses for the three months ended September 30, 2013 decreased approximately 29% from the same period in 2012.  The decrease for the three months ended was primarily due to a reduction in both professional fees and general and administrative costs. We anticipate incurring increased expenses once we begin exploration activities and will require additional funding to support our working capital needs.

Professional fees for the three months ended September 30, 2013 and 2012 were $25,520 and $41,882, respectively. Professional fees for the three months ended September 30, 2013 decreased approximately 39% from the same period in 2012.  The drop was primarily from lower legal fees in the current period.  Fees are associated with filing the appropriate forms with the Securities and Exchange Commission. We anticipate that these fees, as incurred in the period ended September 30, 2013, will remain constant in future periods.

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Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2013 and 2012 were $21,855 and $32,769, respectively. SG&A expenses for the three months ended September 30, 2013 decreased $10,914 or approximately 33% from the same period in 2012.  The drop was primarily from a decrease in payroll expense of $12,000 from the same period in 2012. This decrease in payroll was offset somewhat by increases of approximately $3,000 from office expenses not incurred in 2012.

Net loss for the three months ended September 30, 2013 and 2012 was $64,638 and $91,001, respectively.  Net loss for the three months ended September 30, 2013 decreased approximately 29% from the same period in 2012.  This decrease was primarily from the decrease of SG&A and professional fees for the three months ended September 30, 2013, as compared to the same period in 2012.

Results of Operations for the nine months ended September 30, 2013 and 2012.

Operating Expenses

The Company’s operating expenses for nine months ended September 30, 2013 and 2012 were $266,622 and $265,717, respectively.  Operating expenses for the nine months ended September 30, 2013 was relatively unchanged, from the same period in 2012.  The decrease in professional fees was offset by increases in general and administrative costs and royalty expense. We anticipate incurring increased expenses once we begin exploration activities and will require additional funding to support our working capital needs.

Professional fees for the nine months ended September 30, 2013 and 2012 were $109,718 and $137,727, respectively. Professional fees for the nine months ended September 30, 2013 decreased approximately 20%, from the same period in 2012.  The drop was primarily from lower legal fees in the current period.  Fees are associated with filing the appropriate forms with the Securities and Exchange Commission. We anticipate that these fees, as incurred in the period ended September 30, 2013, will remain constant in future periods.

Selling, general and administrative fees for the nine months ended September 30, 2013 and 2012 were $99,261 and $78,437, respectively. Selling, general and administrative fees for the nine months ended September 30, 2013 increased approximately 27%, from the same period in 2012.  The increase was primarily from website fees of approximately $12,000 in the current period.  

Net loss for the nine months ended September 30, 2013 and 2012 was $266,757 and $265,717, respectively.  For the nine months ended September 30, 2013 operating expenses were relatively unchanged from the same period ended 2012.  During the last quarter both SG&A and professional fees dropped significantly as compared to the same quarter in 2012, however, these savings were not realized over the entire nine-month period ended September 30, 2013.  For the nine-months ended September 30, 2013, professional fees decreased as compared to 2012, however, SG&A increased at a greater rate to offset any savings.

Financial Condition

Total assets. Total assets at September 30, 2013, and December 31, 2012, were $124,877 and $136,252, respectively.  The decrease of approximately 8% is due to normal operating expenses but with minimal cash funds. Total assets consist of cash, prepaid expenses and mineral properties.

Total liabilities.  Total liabilities at September 30, 2013, and December 31, 2012, were $209,197 and $102,565, respectively. The increase, of approximately 104% was primarily attributable to an increase in lease expenses payable by the current amount owing of $63,653 and a short term non-interest bearing loan of $35,000. 

Liquidity and Capital Resources  

Liquidity

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The Company has a net loss from operations for the nine months ended September 30, 2013, and 2012, of $266,622 and $265,717, respectively.  Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products.

We have no known demands or commitments and are not aware of any events or uncertainties as of September 30, 2013 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

Capital Resources

We had no material commitments for capital expenditures as of September 30, 2013 and December 31, 2012.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions.  On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed financial statements. 

While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2012 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2013, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Material weaknesses noted were: lack of a functioning audit committee; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and, management is dominated by a single individual/small group without adequate compensating controls.

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Please refer to our Annual Report on Form 10-K as filed with the SEC on April 11, 2013, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A.  RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1. Quarterly Issuances:

During the quarter ended September 30 2013, the Company issued 20,000 shares of its restricted common stock to each of the two advisors to the board, for advisory services, as per the terms of the Advisory Agreement.

During the quarter ended September 30 2013, the Company issued 20,000 shares of its restricted common stock to the Advisor to the Board, for advisory services totaling 40,000 shares and per terms of their advisory agreements.

During the quarter ended September 30 2013, the Company issued 25,000 shares of its restricted common stock to an employee, per his employment agreement.

2. Subsequent Issuances:

Subsequent issuances totaled 625,000 shares of restricted common stock.

On October 30, 2013, the Company issued 560,000 shares of its restricted common stock, to Powder River Coal Investments, per the terms of the Property Purchase Agreement, dated July 27, 2011(see note 5).

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On November 30, 2013 and December 14, 2013, we issued 40,000 and 25,000 shares of restricted common stock, respectively, per terms of advisory and employment agreements. 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

                Not Applicable.

ITEM 5. OTHER INFORMATION

                None.

ITEM 6. EXHIBITS

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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