---

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, DC. 20549

 

FORM 10-Q

 

 

For the quarterly period ended March 31, 2014

 

OR

 

 

For the transition period from_______to________

 

Commission File Number: 000-55010

 

(Exact name of registrant as specified in its charter)

 

3131 E. Camelback Road, Suite 215

(Address of principal executive offices, including zip code)

 

(Registrants telephone number, including area code)

 

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 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 o No x

 

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 during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a “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 x  No o

 

At March 31, 2014 there were 11,081,618 shares of the registrants Common Stock outstanding.

---

---

EXPLANATORY NOTE

 

On September 20, 2012, an Exchange Agreement was executed between Clark Scott LLC and the company. The key provisions of the Exchange involved a 200 to 1 reverse split of the Company’s outstanding Common Stock, the outstanding Preferred Shares of the Company being surrendered, and the Company’s name and stock symbol would be changed.

 

On November 27, 2013, the Board of Directors approved an amendment to the Articles of Incorporation to reflect a change in par value from $.001 to $.0001.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Statements in this Registration Statement or in the documents incorporated by reference herein that are not descriptions of historical facts are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Reference is made in particular to the descriptions of our plans to, and objectives for, future acquisitions and operations underlying such plans and objectives and other forward looking terminology such as “may”, “expects”, “believes”, “anticipates”, “intends”, “projects” or similar terms, variations of such terms or the negative of such terms. Forward –looking statements are based on management’s current expectations. Actual results could differ materially from those currently anticipated due to a number of factors, including those set forth under “Risk Factors” including, in particular, risks related to the following:

 

•	We have no history of operations or revenues

 

•	The oil and gas industry is highly competitive in all aspects.

 

•	We anticipate that we will incur operating losses and negative cash flows until a sufficient number of acquisitions can be completed.

 

•	Our ability to become profitable is highly dependent on the continued availability of financing.

 

•	We anticipate undergoing a period of significant growth and our failure to manage that growth could have an adverse impact on our business.

 

•	Market prices for oil and gas are highly volatile and a prolonged bear market for the commodity could impact our ability to service the debt component of our capital structure.

 

•	We are subject to “Shell” regulations for reverse merger companies.

 

•	Our common stock is subject to the Penny Stock Regulations

 

•	We are dependent on our Directors, officers and advisors for identifying suitable acquisition prospects and continued access to the capital markets.

 

•	We are subject to a number of Local, State and Federal Regulations, and failure to observe such regulations could have an adverse impact on the Company.

 

•	The majority of our common stock is held by pre-merger shareholders and insiders.

 

•	Conflicts of interest between the Company and its officers and directors may impede the operational ability of the Company.

 

•	The Company intends to issue more shares in possible mergers and acquisitions, which will result in substantial dilution.

We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any changes in our expectations or any changes in events, conditions or circumstances on which any such statement is based.

---

TABLE OF CONTENTS

PART 1 – FINANCIAL INFORMATION

---

---

TABLE OF CONTENTS

---

---

CONDENSED CONSOLIDATED BALANCE SHEETS

---

 

---

---

---

 

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “CRMI,” “Core Resource Management,” “Company,” “we,” “us,” and “our” are to Core Resource Management, Inc. as a whole.

 

Core Resource Management, Inc. (formerly known as Direct Pet Health Holdings, Inc.) (the “Company”) was incorporated in Nevada as Apex Sports.com, Inc. on February 17, 1999, as a Development Stage Company. The Company was renamed to Quad X Sports.com, Inc. in March 1999. The Company’s business strategy was to make acquisitions within the extreme sports industry. The Company was unable to make any acquisitions, ceasing operations in 2000. The Company was renamed to Bethel Holdings in August 2001.  The business strategy involved seeking attractive business combinations. No operations commenced or acquisitions completed during this time. The Company was renamed to Direct Pet Health Holdings, Inc. in June 2006. The Company’s strategy was to seek combinations in online pet health products. The Company has an authorized capital of 100,000,000 commons shares with a par value of $0.0001. The Company’s year-end is December 31.

 

The Company per Plan of Merger dated September 20, 2012 deemed it advisable that Clark Scott LLC, Inc. (“Clark Scott”) be merged into Direct Pet Health Holdings, Inc. Clark Scott was the surviving Corporation and subsequent to merger was renamed to “Core Resource Management, Inc.”. The Company filed the appropriate state filings with the State of Nevada on September 20, 2012

The Company will engage in the acquisition of existing oil and gas production in partnership with established oil and gas operators in Texas and the Southwest. The Company itself will not engage in exploration but will acquire positions of up to 50% in current oil & gas production from well established operators, seeking from time to time, to sell a percentage of their existing production in order to recycle their capital into new leases and wells. Management believes it can maximize value for its shareholders while also negotiating fair and reasonable valuations for its drilling partners.

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiary Core-Chiltepin Holdings, Inc.

 

 

The accompanying condensed financial statements as of March 31, 2014 and December 31, 2013, and for the period from April 25, 2012 (inception) through March 31, 2014; include all transactions occurring during the period from the Company’s incorporation to its fiscal year end.  These condensed financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

The accompanying condensed financial statements include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This includes all normal and recurring adjustments. References to GAAP are done using the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC” or “Codification”) 105, Generally Accepted Accounting Principles (“ASC 105”).

---

The accompanying condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These condensed financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 (including the notes thereto) set forth in Form 10-K.

 

 

The Company follows the full cost method of accounting for oil and gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on an aggregate (one cost center) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities.

 

Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated net proved reserves. Petroleum products and reserves are converted to a common unit of measure, using six (6) MCF of natural gas to one barrel of oil.

 

Costs of acquiring and evaluating unproved properties are initially excluded from depletion calculations. These unevaluated properties are assessed annually to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

 

Future net cash flows from proved reserves using average monthly prices, non-escalated and net of future operating and development costs are discounted to present value and compared to the carrying value of oil and gas properties.

 

Proceeds from a sale of petroleum and natural gas properties are applied against capitalized costs, with no gain or loss recognized, unless such a sale would alter the rate of depletion.

 

 

The preparation of the condensed financial statements in conformity with generally accepted accounting principles requires 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

 

The Company recognizes oil and gas revenues for its ownership percentage of total production under the entitlement method, whereby the working interest owner records revenue based on its share of entitled production, regardless of whether the Company has taken its ownership share of such volumes. An over-produced owner would record the excess of the amount taken over its entitled share as a reduction in revenues and a payable while the under-produced owner records revenue and a receivable for the imbalance amount.

 

 

Basic net loss per share is computed by dividing the net loss available to common shareholders (the numerator) for the period by the weighted average number of common shares outstanding (the denominator) during the period. The computation of diluted earnings is similar to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. For the periods ended March 31, 2014 and December 31, 2013, basic and fully diluted loss per share are the same since the calculation of diluted per share amounts would result in an anti-dilutive calculation.

---

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

 

 

 

The Company accounts for stock-based employee compensation arrangements using the fair value method in accordance with the provisions of ASC Topic 718, Compensation – Stock Compensation (“ASC 718”).

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services in accordance with the provisions of ASC 505-50 "Equity - Based Payments to Non-Employees." Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable.

 

The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by these accounting standards. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

 

 

The Company does not expect recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

 

The Company complies with ASC 915 Development Stage Entities and the Securities and Exchange Commission Exchange Act 7 for its characterization of the Company as development stage.

For purposes of the statement of cash flows, cash includes demand deposits with original maturities of three months or less when purchased. The Federal Deposit Insurance Corporation provides coverage for interest bearing accounts of up to $250,000 and unlimited coverage for non-interest bearing transaction accounts through December 31, 2012. As of March 31, 2014 and December 31, 2013, none of the Company’s cash accounts was in excess of federally insured limits.

The Company's financial instruments consist primarily of cash and cash equivalents, investments, accounts payable, certificate of deposits, and long-term debt.  The carrying values of cash and cash equivalents, investments, accounts payable, certificate of deposits, and long-term debt are representative of their fair values due to their short-term maturities. The Company's Convertible Note is recorded at cost and the fair value is disclosed in Note 10 – Long-Term Debt.

 

The ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. Impairment analyses will be made of all assets using future cash flow analysis. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

---

The Company held investments in equity securities that are required to be measured at fair value on a recurring basis. The Company’s investments consist of common stock of publicly traded company for which market prices are readily available.

 

The Company held investments in convertible notes that are required to be measured at fair value on a recurring basis. Currently these investments are valued at amortized cost due to there is no active market for these investments. The Company performed qualitative and quantitative analysis of these investments as of March 31, 2014 and determined that the investments balances are not impaired.

 

The fair value measurements of the Company’s investments consisted of the following:

There were no transfers between the three levels during the year ended March 31, 2014. The Changes in Level 3 assets measured at fair value for the year ended March 31, 2014 were:

 

The Company’s investments in equity securities are classified as trading securities and as such are carried at fair value based on quoted market prices. Realized and unrealized gains and losses for trading securities are included as earnings in statements of operations.

 

Investments in equity securities as of March 31, 2014:

 

Equity Securities Name and Symbol		Numbers of Shares Held				Cost				Market Value				Accumulated Unrealized  Loss
Nitro Petroleum (NTRO)			92,050			$	47,317			$	21,788			$	(25,529	)

---

 

The accompanying condensed financial statements have been prepared underlying that the Company will continue as a going concern. As shown in the accompanying condensed financial statements, the Company has begun operations and has started to generate revenues. The condensed financial statements do not include any adjustments. Management intends to finance operations by initially funding any company related expenses internally and will continue to raise capital, and receive revenue streams from investment activities.

 

 

As of the period ending March 31, 2014 there were 11,081,618 shares of common stock outstanding.

 

There are no outstanding warrants for the Company Stock.

 

The Company has an obligation under an operating lease agreement for rent of its office space in Phoenix, Arizona. The term of the lease is from 2012 through 2017. The average monthly base lease payment over the remaining term of the lease is $4,196.

 

Following is a schedule of lease payments by year:

Rent expense for the period from April 25, 2012 (inception) through March 31, 2014 was $109,301

 

As of December 31, 2013, the officers of the Company advanced $20,000 to the Company. This advance was paid off in 2014.

In 2013, the Company guarantees a personal loan to one of the officers of the Company. The Company pledges the certificate of deposit as collateral for this loan. On April 2014, the certificate of deposit has been released and the Company has been released from its position as loan guarantee for the officer.

 

 

The Company accounts for income taxes under ASC Topic 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. 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. There was no current or deferred income tax expense or benefits for the three months ended March 31, 2014 and for the period from April 25, 2012 (inception) through March 31, 2014.

---

 

The former director of the Company is a managing director of Pegasus Funds, LLC (“Pegasus”). As of March 31, 2014, Pegasus and Assigns owned approximately 3,000,000 common shares.

 

One of the managing director of Pegasus was paid a consulting fee in the amount of $9,000 for the three months ended March 31, 2014.

 

The Company leases an office space with Pegasus on a month-to-month basis. The monthly lease payment is $1,000 per month.

 

The Company issued 40,000 shares for services to the outside directors.

 

One of the shareholder advances funds for the Company’s operations. These advances have no formal agreement, no stated interest rate and due on demand. This amount was paid in 2014. The amount due as of December 31, 2013 was $20,000.

 

The Company executed a promissory note in the amount of $300,000 payable in twenty four equal installments to Pegasus following the completion of raising $2,000,000 in capital. The note is secured by the certificate of deposits. The amount due as of March 31, 2014 and December 31, 2013 was $100,000 and $125,000, respectively.

 

The Company guarantees a personal loan to one of the officers of the Company. The Company pledges the certificate of deposit as collateral guarantee for this loan. On April 2014, the certificate of deposit has been released and the Company has been released from its position as loan guarantee for the officer.

 

 

The Company’s long-term debt consisted of the following:

Related Party Note

 

In December 2012, the Company entered into a note agreement with Pegasus Funds, LLC (“Pegasus”) in which the Company agrees to pay Pegasus $300,000 in twenty four equal monthly installments. The note is secured by the certificate of deposits. This collateral will be reduced by 50% on the first anniversary of the initial monthly installment and released on the second anniversary of the initial monthly installment. Please refer to note 9 for additional information.

---

Convertible Note

 

The Company raised $3,753,000 in senior convertible debentures (‘The Note”) that matures in 2017. The Note is convertible into shares of the Company’s common stock, at an initial conversion price of $3.00 per share or 1,251,000 shares as of March 31, 2014. The Note accrues interest at a rate of 7.0% per annum and effective interest rate of 15%, compounded quarterly, to be paid on each April 15, July 15, October 15, and January 15. Total accrued interest as of March 31, 2014 was $52,977.

 

The Company evaluated the Note for derivatives and determined that they do not qualify for derivative treatment for financial reporting purpose. The Company then evaluated the Note for beneficial conversion features and determined that some do contain beneficial conversion features. The aggregate intrinsic value of the beneficial conversion features was determined to be $1,299,316. This amount was recorded as a debt discount at the date of issuance that is being amortized over the life of the notes. Total debt discount amortization during the three months ended March 31, 2014 was $76,343.

 

Future maturities of long-term debt as of March 31, 2014 are as follows:

 

The Company approved a non-qualified stock option plan in November 2013 to provide directors, officers, and employees and under which 40,000 shares of common stock have been reserved for issuance. The options are non-qualified stock options and are valued at the fair market value of the stock on the date of grant. The options expire 5 years after the date of grant.

 

The Company accounts for stock-based compensation under the provisions of FASB ASC 718-10-55. This statement requires the Company to record an expense associated with the fair value of stock-based compensation. The Company uses the Black- Scholes option valuation model to calculate stock-based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. The Company used the simplified method to determine the expected term of the options due to the lack of sufficient historical data. Changes in these assumptions can materially affect the fair value estimate. The total fair value of the options is recognized as compensation over the vesting period.

---

A summary of the status of the Company’s option grants as of March 31, 2014 and the changes during the periods then ended is presented below:

 

The weighted average fair value at date of grant for options year ended December 31, 2013 was estimated using the Black-Scholes option valuation model with the following inputs:

 

Risk-free interest rates for the options were taken from the Daily Federal Yield Curve Rates on the grant dates for the expected life of the options as published by the Federal Reserve. The expected volatility was based upon historical data and other relevant factors such as the Company’s changes in historical volatility, capital structure, and its daily trading volumes.

 

In calculating the expected life of stock options, the Company determines the amount of time from grant date to contractual term date for vested options. In developing the expected life assumption, all amounts of time are weighted by the number of underlying options.

 

A summary of the status of the Company’s vested and non-vested option grants at March 31, 2014 and the weighted average grant date fair value is presented below:

As of March 31, 2014, there were $74,992 of unrecognized compensation expenses related to the non-vested stock grant.

---

 

Subsequent to period end, the Company issued $1,025,000 in senior convertible debentures.

 

Subsequent to period end, the Company converted $2,933,000 of convertible note into equity with a conversion price of $2.00 per share.

 

The Company has evaluated subsequent events through May 13, 2014  the date the condensed financial statements were available to be issued. No events have occurred which would have a material effect on the condensed financial statements of the Company as of that date.

---

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The Company is engaged in the acquisition of existing oil and gas production and properties from established oil and gas operators and may, from time to time, acquire positions in smaller publicly traded exploration and production companies and funding the acquisitions via a combination of common equity and senior notes. The Company does not currently engage in direct exploration but will acquire positions of up to 30% in current oil and gas production from established operators, seeking from time to time, to sell a percentage of their existing production in order to recycle their capital into new leases and wells. Management believes it can maximize value for its shareholders while also negotiating fair and reasonable valuations for its acquisitions.

 

We are continuing our efforts to identify and assess investment opportunities in oil and natural gas properties, utilizing our directors and stockholders until such time as funding is sourced from the capital markets. It is anticipated that additional funding from those sources for the next twelve months will be required to maintain the Company. We have raised certain funds through private placements of our equity and convertible debenture securities, and attempts are ongoing to raise additional funds through private placements, and said attempts will continue throughout 2014. We may also use other various debt instruments to raise needed capital during 2014. We have also entered into an exclusive placement agreement with Casimir Capital whereby Casimir will raise up to Fifty Million Dollars ($50,000,000) for the Company through a combination of debt and equity.

 

As oil and gas properties become available and appear attractive to our management, funds, when and if they become available, will be spent on due diligence and research to determine if said prospects could be purchased to provide income for the Company. Established oil companies continue to strive to reduce costs and debt. This causes significant market opportunities for us to possibly position ourselves with sellers that wish to divest themselves of production in order to provide liquidity. Our management believes that current market conditions are creating situations that could result in the opportunity for such production acquisitions.

 

Our operating expenses may increase as we undertake our plan of operations. The increase will be attributable to the additional cost of operations associated with operations, raising additional capital, sourcing acquisitions, road show expenses and continued professional fees that will be incurred.

 

The financial information with respect to the three month periods ended March 31, 2014 that is discussed below is unaudited. In the opinion of management, this information contains all adjustments, consisting only of normal recurring accruals, necessary to state fairly the unaudited financial statements. The results of operations for the interim periods are not necessarily indicative of the results of operations for the full fiscal year.

 

Financial Condition and Results of Operations

 

Revenues

 

The Company’s business plan is to maximize cash flow and shareholder value by acquiring current oil and gas production via suitable Working Interests and Royalty Interests in North American oil and gas production and fund those acquisitions via a combination of common equity and senior notes. The Company may also, from time to time, acquire positions in publicly traded oil and gas companies when management believes it can trade those positions for current production. The Company initiated acquisitions during the second quarter of this year and has completed acquisitions in Texas, Oklahoma and Kansas having acquired working or royalty interests in 17 producing well and   2 saltwater disposal wells.

 

Oil and Gas Production

 

Revenue from oil and gas production from purchased interests commenced during the first quarter and was $59,277 for the three months ended March 31, 2014 with no revenue comparable to 2013

---

Interest Income

 

Interest income from investments and cash held was $5,250 for the three months ended March 31, 2014 with no income comparable to 2013

 

Unrealized gain on investment in equity securities

 

The company had an unrealized gain of $17,177 for the three months ended March 31, 2014 with no gains comparable to 2013.

 

Operating Expenses

 

Our operating expenses for the three months ended March 31, 2014 were $596,182 of which none represented organizational and registration expenses, $407,870 represents general and administration expense, and $139,756 represent interest expense. The comparable numbers for the same period in 2013 are operational expenses of $350,723 of which there were no organization and registration expenses, $273,699 represents general and administration expense, and $74,427 represents Interest expense.

 

Liquidity and Capital Resources

 

We have continued to fund the bulk of our operating expenses through the issuance of equity investments and convertible debentures.  As of the date of this disclosure statement, in excess of $5.1 million in new capital has been raised, consisting of a combination of equity and convertible notes.   The Company currently has three employees and intends to maintain minimal overhead until such time as its monthly cash flows from acquired production exceeds $200,000. Management believes that by acquiring producing properties and partnering with professional operators, it can keep the Company’s headcount to ten or fewer employees. Management believes it has sufficient liquidity to maintain its current level of operations and service the coupon on its convertible notes through the end of 2014 without the need for additional capital.

 

Future Capital Requirements

 

The Company has no commitments for material capital expenditures beyond installing its accounting system, which has already been contracted and paid for. Management believes that the Company has more than adequate liquidity to fund its operations at current levels through year-end 2014.

 

We expect to continue to rely on sales of our common shares and securities convertible into our common shares, in order to continue to fund our operations.  Issuance of additional shares will result in dilution to existing stockholders.  There is no assurance that we will achieve any additional sales of such securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

 

On February 21, 2014 we entered into an exclusive agreement with Casimir Capital LP (“Casimir”) to raise up to $50,000,000 through a combination of debt and equity.  The exclusive agreement is for one year and is on a best efforts basis.  Casimir is a full service natural resource investment bank headquartered in New York with offices, affiliates and personnel in Toronto, Ontario, Calgary, Alberta, Melbourne, Australia and San Paulo, Brazil.

 

Off Balance Sheet Arrangements

 

Pegasus Funds, LLC, a consultant to the Company, provided office space, telephones, internet and fax to the Company without charge. Commencing February 1, 2013, the Company began paying $1,000 per month to Pegasus for use of Pegasus’s offices and facilities. The Company guaranteed a personal loan of Mr. Glenn, a principal in Pegasus, by pledging a certificate of deposit as collateral for this loan. In April 2014, the certificate of deposit was released and the Company was also released from its position as a guarantor of Mr. Glenn's indebtedness.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Not applicable

---

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

The company has initiated and continues to monitor its disclosure controls and procedures that are designed to ensure that information required to be disclosed by it in the reports that it files or submits to the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to the Company’s management, including its principal executive and principle financial officer (referred to in this report as the Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. The Company’s management evaluated, with the participation of its Certifying Officer, the effectiveness of the Company’s disclosure controls and procedures as of March 31,2014, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Our Certifying Officer concluding these controls are effective.

 

Changes in Internal Controls

 

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

Presently, there are not any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

 

ITEM 1.A.

 

Not applicable

 

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

 

During the three months ended March 31, 2013, the Company did not issue any share of the Company’s common stock to any investor.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. OTHER INFORMATION

 

None

 

ITEM 5. EXHIBITS

 

31.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Account Officer).

 

32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Account Officer).

 

 

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CORE RESOURCE MANAGEMENT, INC.

 

DATED: May 13, 2014

---

Number

---

 

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

 

* filed herewith

 

 

24

---