0001477932-13-003854.txt : 20130816 0001477932-13-003854.hdr.sgml : 20130816 20130816160538 ACCESSION NUMBER: 0001477932-13-003854 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20130630 FILED AS OF DATE: 20130816 DATE AS OF CHANGE: 20130816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOUBLE CROWN RESOURCES INC. CENTRAL INDEX KEY: 0001366407 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 980491567 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53389 FILM NUMBER: 131045389 BUSINESS ADDRESS: STREET 1: 2312 N. GREEN VALLEY PKWY STREET 2: SUITE 1026 CITY: HENDERSON STATE: NV ZIP: 89014 BUSINESS PHONE: 707-961-6016 MAIL ADDRESS: STREET 1: 2312 N. GREEN VALLEY PKWY STREET 2: SUITE 1026 CITY: HENDERSON STATE: NV ZIP: 89014 FORMER COMPANY: FORMER CONFORMED NAME: Denarii Resources Inc. DATE OF NAME CHANGE: 20060616 10-Q 1 ddcc_10q.htm FORM 10-Q ddcc_10q.htm


U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
 
Mark One
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File No. 000-53389
 
Double Crown Resources, Inc.
(Name of small business issuer in its charter)
 
Nevada
 
20-5386829
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
2312 N. Green Valley Pkwy, Suite 1026, Henderson, Nevada 89014
(Address of principal executive offices)
 
(707) 961-6016
(Issuer’s telephone number)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Name of each exchange on which registered:
None
 
 
 
 
 
Securities registered pursuant to Section 12(g) of the Act:
   
 
Common Stock, $0.001
 
 
(Title of Class)
 
 
 
Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o
 
Indicate by checkmark 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 (Section 229.405 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 o
 
Indicate by checkmark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
 
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x
 
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.
 
N/A
 
Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes o No o
 
Applicable Only to Corporate Registrants
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:
 
Class
Outstanding as of August 2, 2013
Common Stock, $0.001
333,115,065
 


 
 

 

DOUBLE CROWN RESOURCES INC.
 
Form 10-Q
 
Part 1.
FINANCIAL INFORMATION
 
Page
 
 
 
     
Item 1.
Financial Statements
    3  
 
 
       
 
Balance Sheets (Unaudited)
    3  
 
 
       
 
Statements of Operations (Unaudited)
    4  
 
 
       
 
Statements of Cash Flows (Unaudited)
    5  
 
 
       
 
Notes to Financial Statements (Unaudited)
    6  
 
 
       
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    13  
 
 
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    19  
 
 
       
Item 4.
Controls and Procedures
    20  
 
 
       
Part II.
OTHER INFORMATION
       
 
 
       
Item 1.
Legal Proceedings
    22  
 
 
       
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    22  
 
 
       
Item 3.
Defaults Upon Senior Securities
    23  
 
 
       
Item 4
Mine Safety Disclosure
    23  
 
 
       
Item 5.
Other Information
    24  
 
 
       
Item 6
Exhibits
    24  

 
2

 
 
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.
 
DOUBLE CROWN RESOURCES, INC.
(formerly "Denarii Resources, Inc.")
(An Exploration Stage Company)
BALANCE SHEETS
 
   
June 30,
   
December 31,
 
   
2013
   
2012
 
   
(Unaudited)
   
(Audited)
 
ASSETS
           
Current assets:
           
Cash
  $ 4,875     $ 3,273  
Deposit
    15,550       -  
Total current assets
    20,425       3,273  
                 
Total current assets
  $ 20,425     $ 3,273  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Liabilities:
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 41,752     $ 43,150  
Accounts payable- disputed
    83,497       77,998  
Disputed liability - related party (Notes 7)
    563,206       563,206  
Accrued interest - related party (Notes 7)
    147,340       105,604  
Note payable- related party (Note 7)
    132,382       132,382  
Debt- related parties (Note 5)
    159,387       156,211  
 
               
Total current liabilities
    1,127,564       1,078,551  
                 
Non-current liabilities:
               
Mineral prospect obligation (Note 4)
    131,539       149,087  
Debt- long term (Note 4)
    25,000       30,000  
Total non-current liabilities
    156,539       179,087  
                 
Total liabilities
    1,284,103       1,257,638  
                 
Stockholders' deficit
               
Common stock; 500,000,000 shares authorized at $0.001 par
               
value, 314,615,065 and 180,301,125 shares issued and
               
outstanding at June 30, 2013 and December 31, 2012, respectively
    314,615       180,301  
Stock subscription payable
    1,000       -  
Additional paid-in capital
    4,309,157       2,026,771  
Deficit accumulated during exploration stage
    (5,888,450 )     (3,461,437 )
Total Stockholders' Deficit
    (1,263,678 )     (1,254,365 )
                 
Total Liabilities and Stockholders' Deficit
  $ 20,425     $ 3,273  
 
The accompanying footnotes are an integral part of these financial statements.
 
 
3

 
 
DOUBLE CROWN RESOURCES, INC.
(formerly "Denarii Resources, Inc.")
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
 
   
Three Months Ended
   
Six Months Ended
   
From Inception
March 23, 2006 to
 
   
June 30,
   
June 30,
   
June 30,
 
   
2013
   
2012
   
2013
   
2012
   
2013
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
       
Revenues
  $ -     $ -     $ -     $ -     $ -  
Cost of Services
    -       -       -       -       -  
Gross Margin
    -       -       -       -       -  
                                         
Operating Expenses:
                                       
Impairment of mineral property acquisition costs
    -       -       -       -       70,250  
Impairment of prepaid royalties
    -       -       -       -       124,795  
Professional fees
    2,041,461       140,334       2,112,298       753,417       3,881,326  
Office - general expenses
    113,536       20,224       214,276       55,650       386,024  
General expenses - related party
    45,875       -       45,875               777,723  
Total Operating Expenses
    2,200,872       160,558       2,372,449       809,067       5,240,118  
                                         
Operating Loss
    (2,200,872 )     (160,558 )     (2,372,449 )     (809,067 )     (5,240,118 )
                                         
Other (Income) Expenses
                                       
Interest Expense
    3,726       3,726       7,452       7,452       33,772  
Interest Expense - related party
    23,556       24,025       47,112       46,855       167,936  
Civil Claim Contingency
    -       -       -               286,875  
Financing cost - related party
    -       -       -       120,034       159,749  
Total Other Expenses
    27,282       27,751       54,564       174,341       648,332  
                                         
Net Loss Before Income Taxes
    (2,228,154 )     (188,309 )     (2,427,013 )     (983,408 )     (5,888,450 )
                                         
Income Tax
    -       -       -       -       -  
                                         
Net Loss
  $ (2,228,154 )   $ (188,309 )   $ (2,427,013 )   $ (983,408 )   $ (5,888,450 )
                                         
Loss per Share, Basic & Diluted
  $ (0.01 )   $ (0.00 )   $ (0.01 )   $ (0.01 )        
                                         
Weighted Average Shares Outstanding
    259,800,907       158,882,569       229,117,938       165,530,803          
 
The accompanying notes are an integral part of these financial statements.
 
 
4

 
 
DOUBLE CROWN RESOURCES, INC.
(formerly "Denarii Resources, Inc.")
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
 
               
From inception
 
               
(March 23,
 
                2006)  
   
Six Months Ended
   
through
 
   
June 30,
   
June 30,
   
June 30,
 
   
2013
   
2012
    2013  
   
(Unaudited)
   
(Unaudited)
         
CASH FLOW FROM OPERATING ACTIVITIES:
                   
Net loss for the period
  $ (2,427,013 )   $ (983,408 )   $ (5,888,450 )
Adjustments to reconcile net loss from operations:
                       
Shares issued
    2,011,350       708,700       3,623,767  
Impairment of mineral property acquisition costs
    -       -       60,250  
Impairment of prepaid royalties
    -       -       134,200  
Beneficial conversion feature
    -       -       39,715  
Civil claim contingency
    -       -       286,875  
Financing cost of warrants issued
    -       120,034       120,034  
Change in Operating Assets and Liabilities: Deposits
    (15,550 )             (15,550 )
Increase (decrease) in accounts payable
    4,101       394       125,249  
Increase in accrued interest
    8,235       -       36,848  
Increase in accrued interest to a related party
    39,129       -       111,387  
Increase (decrease) in accounts payable- related party
    -       46,856       563,206  
Increase (decrease) in debt
    (25,000 )     -       (88,926 )
Net cash used in operating activities
    (404,748 )     (107,424 )     (891,395 )
                         
CASH FLOW FROM INVESTING ACTIVITIES:
                       
Purchase of mineral claim
    -       -       (10,000 )
Net Cash used in investing activities
    -       -       (10,000 )
                         
CASH FLOW FROM FINANCING ACTIVITIES:
                       
Proceed from convertible debt
    -                  
Proceeds from subscriptions payable
    -       7,700       45,000  
Proceeds from issuance of common stock
    406,350       55,700       861,270  
Proceeds from subscriptions receivable
    -       10,000          
Net Cash provided by financing activities
    406,350       73,400       906,270  
                         
Net Increase (Decrease) in Cash
    1,602       (34,024 )     4,875  
Cash at Beginning of Period
    3,273       38,120       -  
Cash at End of Period
  $ 4,875     $ 4,096     $ 4,875  
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                       
Cash paid for interest
  $ -     $ -     $ -  
Cash paid for franchise and income taxes
  $ -     $ -     $ -  
                         
NON-CASH INVESTING AND FINANCING ACTIVITIES:
                       
Accounts payable for mineral property
  $ -     $ -     $ 5,000  
Convertible debt issued for mineral property
  $ -     $ -     $ 50,000  
Expenses paid on company's behalf by related parties
  $ -     $ -     $ 357,956  
Proceeds from private placement (paid to related parties)
  $ -     $ -     $ 40,000  
Shares payable for mineral property
  $ -     $ -     $ 5,250  
Shares issued for subscription receivable
  $ -     $ -     $ -  
Shares issued for services
  $ 1,980,500     $ -     $ 3,527,717  
Shares issued for conversion of debt
  $ 30,850     $ -     $ 96,050  
 
The accompanying notes are an integral part of these financial statements.
 
 
5

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013
 
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Double Crown Resources, Inc. (Formerly “Denarii Resources, Inc.”) ("Double Crown Resources" or the "Company") was organized under the laws of the State of Nevada on March 23, 2006 to explore mining claims and property in North America.

Basis of Presentation
 
These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.
 
NOTE 2 – GOING CONCERN

The Company’s financial statements as of June 30, 2013 have been prepared using generally accepted accounting principles 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 revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company has incurred a cumulative net loss from inception (March 23, 2006) through June 30, 2013 of $5,888,450.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.
 
 
6

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable.

In Management's opinion all adjustments necessary for a fair statement of the results for the interim periods have been made. All adjustments are normal and recurring.

Reclassifications

Certain prior year balances have been reclassified to conform to the current year presentation.

Revenue Recognition

The Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.

Fair value of financial instruments
 
The carrying value of cash equivalents and accrued expenses approximates fair value due to the short period of time to maturity.

Stock-based compensation

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

Recent Accounting Pronouncements

The Company has evaluated all of the recent accounting pronouncements through the filing date of these financial statements and feels that none of them will have a material effect on the Company’s interim financial statements.
 
 
7

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013

NOTE 4 – DEBT

Mineral Prospect Obligation

Effective on February 9, 2011 the company entered into an agreement between the Company and Richard and Gloria Kwiatkowski (“the Seller”). The Option provides for the development of 136 claim units covering a series of nickel-colbalt-gold-platinum group element prospects, which prospects are located 35 kilometers northwest of Thunder Bay, Ontario (the “Prospects”).

In accordance with the terms and provisions of the Option: (i) upon execution of certain documentation and transfer of title, the Company has paid $5,000 and has issued 250,000 shares of common stock to the Kwiatkowskis; (ii) at the end of year one, February 9, 2012, the Company issued Kwiatkowskis 512,821 shares as payment which was valued at $20,000 (fair market value $0.039/share). (iii) At the end of year two, February 9, 2013, the Company will pay to Kwiatkowskis a further $30,000 either in half cash and half shares or all shares at the option of the Kwiatkowskis; (iv) each anniversary thereafter, the Company shall pay to Kwiatkowskis $25,000 as advance royalty payment until the sum of $200,000 has been paid; (v) the Company shall further make payment to Kwiatkowskis of 3% NSR royalty on all production from the Prospects, which royalty may be purchased by the Company as to 1.5% of the 3% for the sum of $1,500,000 in increments of $500,000 per 0.5% NSR; and (vi) the Company shall commit to expenditures of $200,000 on the Prospects.

The Company in February 2013 paid the $30,000 liability via stock by issuing 2,727,300 shares of stock.

As part of the original agreement, the Company issued a convertible debt of $20,000 to the Seller. In conjunction with this debt, there was no debt discount or beneficial conversion feature recorded since the conversion privilege was contingent on the current market value of the shares at the date of the notice of conversion. Accordingly, on February 9, 2012 the Company issued to Gloria and Richard Kwiatkowski 256,411 and 256,410 shares respectively at the market price of $0.0390 to satisfy the $20,000 Debt.

The prepaid royalty of $124,200 has been analyzed for impairment and has been fully impaired.

This liability is presented at the present value of expected future cash flow requirements.

Interest on the discounted royalty claim has been accrued at 12%. Accrued interest was $21,161 as of June 30, 2013 which brings the liability balance to $156,539.
 
 
8

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013

NOTE 5 – RELATED PARTY TRANSACTIONS

Debt – Related Party

Debt to Dr. Jackson

In the year ended December 31, 2010 the company entered into a five-year consulting agreement dated October 1, 2010 with Dr. Stewart Jackson (“Jackson”), pursuant to which Jackson, as the chief executive officer and a member of the board of directors, will provide certain consulting services to the Company including, but not limited to, contact with precious metal assets for acquisition in North America. After the change in management, the Company recognized the future remaining obligation based on the contract to Mr. Jackson and accrued it at its present value using a 12% discount rate over fifty-one months. This resulted in an $89,596 being recorded as a related party debt.

Interest expense on this debt to Jackson of $21,791 has been recorded through June 30, 2013, for a total debt of $111,387. The Company is disputing this liability.

Loans from Shareholder

A former officer of the Company has made loans to the Company totally $48,000 as of June 30, 2013. The loans are non-interest bearing and payable on demand.

The debt-related parties liability on the balance sheet of $159,387 is comprised of $111,387, due to Jackson, plus the $48,000 due to a former officer.

Share Issuances

During the quarter ended March 31, 2013 the Company issued 3,000,000 shares to directors for services valued at $30,000.

Director Compensation

For the six months ended June 30, 2013 the Company has paid $45,875 in fees to a director for services rendered.
 
NOTE 6 – STOCKHOLDERS' DEFICIT

Authorized

500,000,000 common shares with a par value of $0.001.

During the quarter ended March 31, 2013 the company issued 26,336,640 shares of stock. Of this amount 3,000,000 was issued for services valued at $30,000, 2,727,300 was issued for debt of $30,000 and 26,336,640 was issued for cash of $134,350. The Company also received $51,000 in cash for shares to be issued in the amount of 10,200,000 shares.

During the quarter ended June 30, 2013 the Company issued 102,250,000 shares of stock. Of this amount 61,350,000 were issued for completed services valued at market which was between .03 and .04 per share;
 
 
9

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013

NOTE 6 – STOCKHOLDERS' DEFICIT (continued)

Shares Issued (continued)

29,200,000 for cash of $221,000; 1,700,000 shares of stock for debt satisfaction of a $850.00 loan; and 10,000,000 shares in satisfaction of the first quarter 2013 subscription payable of $50,000.
 
Stock Warrants

The following is a summary of warrants balance as of June 30, 2013

 
 
Number of Shares
   
Weighted Average Exercise Price
 
 
 
Expiration Date
Balance, December 31, 2011
    1,966,666       0.04  
June 30, 2012
 
               
 
Warrants granted and assumed
    10,000,000       0.005  
January 9, 2012
Warrants expired
    (8,000,000 )     0.005  
January 31, 2012
Warrants canceled
    (1,966,666 )     0.005  
June 30, 2012
Warrants exercised
    (2,000,000 )     0.005  
Exercised by the expiration date of January 31, 2012
 
               
 
Balance, June 30, 2013
    -          
 
 
NOTE 7 – DISPUTED LIABILITIES

As of June 15, 2011 the former management signed a resolution approving the issuance of promissory notes in the amount of $271,331 to Falco Investments, Inc. New management believes that the old management was not acting in the best interest of the company when they authorized these expenses and subsequently approved the issuance of the notes. The Company has recorded the balance of $842,928 due to Falco Investments, Inc. of which $132,382 has been reported as note payable, $563,206 as a Disputed Liability Related Party and $ 147,340 as accrued interest to June 30, 2013. The Company has decided to contest the current balance claimed to be due to Falco. Falco Investments initiated a lawsuit in August of 2011.

While the amount is deemed frivolous, the Company has included this debt on the balance sheet until an eventual resolution is completed.
 
 
10

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013

NOTE 8 – INCOME TAX

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of June 30, 2013 and December 31, 2012:
 
   
June 30,
2013
   
December 31,
2012
 
Deferred Tax Assets – Non-current:
           
             
NOL Carryover
  $ 4,342,857     $ 1,315,476  
Payroll Accrual
    -       -  
Less valuation allowance
    (4,342,857 )     (1,315,476 )
                 
Deferred tax assets, net of valuation allowance
  $ -     $ -  

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended June 30, 2013 and December 31, 2012 due to the following:
 
   
June 30,
2013
   
December 31,
2012
 
             
Book Income
  $ (3,240,354 )   $ (1,012,200 )
Meals and Entertainment
    -       3,000  
Stock for Services
    2,011,350       662,450  
Accrued Payroll
    -       -  
Valuation allowance
    1,229,004       346,750  
    $ -     $ -  
 
At June 30, 2013, the Company had net operating loss carry forwards of approximately $34,000,000 that may be offset against future taxable income through the year 2033. No tax benefit has been reported in the June 30, 2013 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
 
 
11

 
 
DOUBLE CROWN RESOURCES, INC
(Formerly “Denarii Resources, Inc.”)
(An Exploration Stage Company)
Notes to Financial Statements
June 30, 2013
NOTE 8 – INCOME TAX (continued)

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

NOTE 9 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there is one such events that are material to the financial statements to be disclosed:

1.  
The Company in July 2013 issued 5,000,000 shares of stock for an investment of $50,000.


 
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS.

The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements involve risks and uncertainties, including statements regarding Double Crown Resources Inc.'s (the "Company") capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan”,” intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports the Company files with the SEC. These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

As used in this Quarterly Report, the terms "we," "us," "our," and "our Company" mean Double Crown Resources Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

CURRENT BUSINESS OPERATIONS

Double Crown Resources Inc. was organized under the laws of the State of Nevada on March 23, 2006, to explore mining claims and property in North America.

We are an exploration stage company that was organized to enter into the mineral industry. We previously located, explored, acquired and developed mineral properties. Our business operations had been limited to gold and mineral exploration/development of selected properties in North, South and Latin America. We will continue with this segment of our business plan. We have been developing new business ventures to supply vital minerals needed for oilfield drilling operations. There may also be expansion into the solar energy sector. Our board of directors anticipates that these new ventures will add significantly to our potential for long-term revenue and profit.

MINERAL PROPERTIES

Bateman Property Option

Effective on February 9, 2011, we entered into that certain Bateman Property Option (the “Option”) with Richard and Gloria Kwiatkowski (collectively, the “Kwiatkowski”). The Option provides for the development of 136 claim units covering a series of nickel-colbalt-gold-platinum group element prospects, which prospects are located 35 kilometers northwest of Thunder Bay, Ontario (the “Prospects”). The Prospects are owned 100% by Kwiatkowski as tenants in common. We intend to work on the Prospects, including drilling, for three types of geological conceptual targets: (i) shebandowan type high grade nickel-cobalt-gold-platinum sulphide deposits; (ii) disseminated nickel sulphides of Mount Keith type with bulk tonnage potential; and (iii) gold mineralization within an extensive conglomerate unit of potential open-pit bulk tonnage configuration.
 
 
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In accordance with the terms and provisions of the Option: (i) upon execution of certain documentation and transfer of title, we paid $5,000 and issued 250,000 shares of common stock to the Kwiatkowskis; (ii) at the end of year one, on February 9, 2012, we issued the Kwiatkowskis 512,821 shares as payment for the $20,000 due under the terms of the Option; (iii) at the end of year two, on February 9, 2013, we paid a further $30,000 by issuing 2,727,300 shares of stock; (iv) each anniversary thereafter, we shall pay to Kwiatkowskis $25,000 as advance royalty payment until the sum of $200,000 has been paid; (v) we shall further make payment to Kwiatkowski of 3% NSR royalty on all production from the Prospects, which royalty may be purchased by us as to 1.5% of the 3% for the sum of $1,500,000 in increments of $500,000 per 0.5% NSR; and (vi) we shall commit to expenditures of $200,000 on the Prospects.

As part of this agreement, we issued a convertible debt of $20,000 to the Seller. In conjunction with this debt, there was no debt discount or beneficial conversion feature recorded since the conversion privilege was contingent on the current market value of the shares at the date of the notice of conversion. Accordingly, on February 9, 2012 the Company issued to Gloria and Richard Kwiatkowski 256,411 and 256,410 shares respectively at the market price of $0.0390 to satisfy the $20,000 Debt.

The prepaid royalty of $124,200 has been analyzed for impairment and has been fully impaired.

Interest on the discounted royalty claim has been accrued at 12%. Accrued interest was $21,161 as of June 30, 2013, which brings the liability balance to $156,539.

McNab Property

We previously owned a mineral property, known as the McNab Molybdenum Property (the “McNab Property”), comprised of one mineral claim containing 1 cell claim units totaling 251.11 hectares;
 
BC Tenure #
Work Due Date Units
Total Area (Hectares)
831929
12
251.11
 
Location and Tenure
 
The McNab Property is located near the headwaters of McNab Creek, approximately 40 km northwest of Vancouver, BC. Access to the property is presently via water or helicopter. The McNab Property consists of 251.11 hectares of mineral title, valid until August 20, 2012. The property was held in the name of Stan Ford on behalf of the company pending completion of the company’s application for a British Columbia Miners License. We did not renew our mineral claim on this property when it expired in August 2012.

Guyana Prospect
 
Effective on February 28, 2011, we entered into that certain extension of a letter agreement to form a joint venture dated December 9, 2010 (the “Letter Agreement”) with Guyanex Minerals Corp. (“GMC”). The Letter Agreement provided for the development of the gold mining concessions owned by Guyanex Minerals Incorporation (“GMI”), which is the owner of a 100% interest in those certain gold mining concessions located in the Republic of Guyana, including three concessions along the Guyani River (collectively, known as the “Prospect”). In accordance with the terms and provisions of the Letter Agreement: (i) we were to purchase an undivided 50% equity interest in the Prospects by providing a payment of $5,000,000 prior to January 31, 2011 to be held in escrow (the “Option Purchase Price”); (ii) upon payment of the $5,000,000 by us, GMI was going to issue to us 1,000 common shares representing the 50% equity interest in GMI; and (iii) any capital requirements above the Option Purchase Price were to be paid on a 50-50 basis by us and GMC (the “Capital Requirements”).
 
 
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In accordance with the extension of the Letter Agreement, we and GMC agreed to a payment date of May 31, 2011 for the Option Purchase Price. The payment was never made.
 
As of November 7, 2011, our board of directors determined that pursuing the purchase of the interest in GMC and incurring the Capital Requirements associated with the gold mining concessions is not in our best interests or in the best interests of our shareholders. Therefore, we and GMC have entered into that certain rescission agreement (the “Rescission Agreement”), pursuant to which we are released from any further obligations or duties thereunder. Moreover, it was previously determined that at no time prior to May 31, 2011 was the future sacrifice of $5,000,000 associated with the Letter Agreement probable and, therefore, it is our intent to remove this liability from our financial statements and make corresponding adjustments. Therefore, our Quarterly Report on Form 10-Q for the three month period ended March 31, 2011 was restated.

PROPOSED FUTURE BUSINESS OPERATIONS

Our business plan has been focused on building a portfolio of producing mineral properties through acquisition of properties that are in production or have the potential for near-term production. Pursuit of this business strategy requires our ability to secure significant funding, which we have not secured to date.

We have also expanded our business plan to include an increased focus on the oilfield services sector. We are in the process of negotiating contracts to supply industrial quantities of commodities to on-shore oil and gas drilling operations in the United States. We believe that within the continental United States, thousands of wells are being drilled and will continue to be drilled over the next thirty years. Many of these wells require hydraulic fracturing (fracking) to access the oil and gas reserves trapped in hundreds of miles of brittle shale rock thousands of feet below the surface. The hydraulic fracturing process requires a number of specialized commodities, including a unique type of sand, known as “frac-sand” or “proppant,” that can hold its shape under intense pressure and heat and is porous enough to allow thousands of gallons of oil or millions of cubic feet of gas to seep through it to the drill pipe. A typical frac-well will use 2,200 tons of this type of frac-sand. Other materials required for hydraulic fracturing include, guar gum, barite, and a variety of industrial chemicals.

We intend to participate in negotiations and discussions with potential joint venture parties regarding sourcing frac-sand, barite, guar gum and various industrial chemicals and establishing the infrastructure to deliver these materials to oil and gas drilling sites. As part of this business strategy, in March of 2013, we became an authorized dealer for the chemicals division of American International Sealing, LLC, granting us U.S. marketing rights for a slate of industrial chemicals used in hydraulic fracturing, bioremediation and pipeline chemical cleaning functions.

Also in March 2013, we executed a Memorandum of Understanding with Synergy Natural Resources, LLC (“Synergy”), a Georgia-based industrial design and manufacturing company (the “Synergy MOU”) to acquire Synergy and its assets. The assets we intended to acquire included the PASS Box, a portable aggregate transport system, which Synergy had developed. Under the terms of the Synergy MOU, we were given a ninety-day period to conduct due diligence on Synergy and the assets to be acquired. During this due diligence period, we reached the conclusion that an acquisition of Synergy was not in the best interests of our Company and terminated the Synergy MOU. We have no further obligations or connections to Synergy as of the date of filing this Quarterly Report.

Our ability to continue to complete planned exploration activities, expand acquisitions and explore mining opportunities and further potential operations involving the oil and gas industry and frac-drilling is dependent on adequate capital resources being available and further sources of debt and equity being obtained.
 
 
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RESULTS OF OPERATIONS

Three Month Period Ended June 30, 2013 Compared to Three Month Period Ended June 30, 2012

Our net loss for the three month period ended June 30, 2013 was $2,228,154 compared to a net loss of $188,309 during the three month period ended June 30, 2012, an increase of $2,039,845. During the three month periods ended June 30 2013 and 2012, we did not generate any revenue.

During the three month period ended June 30, 2013, we incurred operating expenses of $2,200,872 compared to $160,558 incurred during the three month period ended June 30, 2012. Operating expenses incurred during the three month period ended June 30, 2013 consisted of: (i) Professional fees of $2,041,461, (ii) Office – general expenses of $113,536, and (iii) General expenses – related party of $45,875, as compared to the three month period ended June 30, 2012 consisted of: (i) Professional fees of : $140,334, (ii) Office – general expenses of $20,224, and (iii) General expenses – related party of $-0-. Our professional fees increased by $1,901,127 and our general expenses increased by $93,312 due to the increase in the scope and scale of our business operations involving identification of oilfield services opportunities and the development of a patent-pending transport container.

Other expenses incurred during the three month period ended June 30, 2013 were interest expense of $27,282 as compared to $27,751 for the three month period ended June 30, 2012.
 
Thus, our net loss from operations during the three month period ended June 30, 2013 was $2,228,154 compared to a net loss from operations during the three month period ended June 30, 2012 of $188,309. The weighted average number of shares outstanding was 259,800,907 for the three month period ended June 30, 2013 compared to 158,882,569 for the three month period ended June 30, 2012.

We anticipate that we will not earn revenues until such time as we have entered into oilfield services contracts or commercial production, if any, of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.

Six Month Period Ended June 30, 2013 Compared to Six Month Period Ended June 30, 2012

Our net loss for the six month period ended June 30, 2013 was $2,427,013 compared to a net loss of $938,408 during the six month period ended June 30, 2012, an increase of $1,488,910. During the six month periods ended June 30, 2013 and 2012, we did not generate any revenue.

During the six month period ended June 30, 2013, we incurred operating expenses of $2,372,449 compared to $809,067 incurred during the six month period ended June 30, 2012. Operating expenses incurred during the six month period ended June 30, 2013 consisted of: (i) Professional fees of $2,112,298, (ii) Office – general expenses of $214,276, and (iii) General expenses – related party of $45,875, as compared to the six month period ended June 30, 2012, which consisted of: (i) Professional fees of $753,417, (ii) Office – general expenses of $55,650, and (iii) General expenses – related party of $-0-. Our professional fees increased by $1,358,881 and our general expenses increased by $158,626 due to the increase in the scope and scale of our business operations involving identification of oilfield services opportunities and the development of a patent-pending transport container. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing and consulting costs.

Other expenses incurred during the six month period ended June 30, 2013 were interest expense of $7,452 and (ii) interest expense- related party of $47,112 resulting in total other expenses of $54,564, as compared to the six month period ended June 30, 2012 were interest expense of $7,452 and (ii) interest expense- related party of $46,855 resulting in total other expenses of $174,431.

Thus, our net loss during the six month period ended June 30, 2013 was $2,427,013, compared to a net loss from operations during the six month period ended June 30, 2012 of $983,408. The weighted average number of shares outstanding was 229,117,938 for the six month period ended June 30, 2013 compared to 165,530,803 for the six month period ended June 30, 2012.
 
 
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We anticipate that we will not earn revenues until such time as we have entered into oilfield services contracts or commercial production, if any, of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.
 
LIQUIDITY AND CAPITAL RESOURCES

Six Month Period Ended June 30, 2013

As of June 30, 2013, our current assets were $20,425 and our current liabilities were $1,127,564, which resulted in a working capital deficit of $1,107,139. As of June 30, 2013, current assets were comprised of $4,875 in cash and $15,500 in deposits. As of June 30, 2013, our current liabilities consisted of: (i) $41,752 in accounts payable and accrued expenses, (ii) $83,497 in accounts payable – disputed, (iii) $563,206 in disputed liability - related party, (iv) $147,340 in accrued interest – related party, (v) $132,382 in note payable - related party, and (vi) $159,387 in debt – related parties.

As of June 30, 2013, our total assets were $20,425 comprised of current assets. Our total assets for fiscal year ended December 31, 2012 were $3,273.
 
As of June 30, 2013, our total liabilities were $1,284,103 comprised of: (i) current liabilities of $1,127,564; (ii) mineral prospect obligation of $131,539, and (iii) debt - long term of $25,000. Our total liabilities for fiscal year ended December 31, 2012 were $1,257,638. Our total liabilities increased slightly, primarily due to the increase in accrued interest to related parties. We also recorded a disputed liability – related party. As of June 15, 2011, old management signed a board resolution approving the issuance of convertible promissory notes in the amount of $271,331 to Falco Investments, Inc. (“Falco”). We believe that old management was not acting in our best interests when they authorized these expenses and subsequently approved the issuance of the convertible debts. We have recorded the balance of $806,975 due to Falco, of which $132,382 has been reported as a note payable – related party, $563,206 as a disputed liability – related party and $111,387 as accrued interest to June 30, 2013. We have decided to contest the current balance claimed to be due to Falco. See “Part II, Item 1. Legal Proceedings”.

Stockholders’ deficit increased from ($1,254,365) as of December 31, 2012 to ($1,263,678) as of June 30, 2013.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the six month period ended June 30, 2013, net cash flows used in operating activities was ($404,748) compared to net cash flow used in operating activities of ($107,424) during the six month period ended June 30, 2012. Net cash flows used in operating activities consisted primarily of a net loss of ($2,427,013) (2012: $983,408), which was adjusted by: (i) $2,011,350 (2012: $708,700) in shares issued, and (ii) $-0- in financing cost of warrants issued (2012: $120,034). Net cash flows used in operating activities during the six-month period ended June 30, 2013 was further changed by a change in operating assets and liabilities: deposits of ($15,550) (2012: $0-) an increase of $4,101 in accounts payable (2012: $394), $39,129 in accrued interest to a related party (2012: $0-), $8,235 in accrued interest (2012: $0-), and a decrease of $25,000 in debt (2012: $-0-). Net cash flows from operating activities during the six-month period ended June 30, 2012 was further changed by a increase of $46,856 in accounts payable - related party (2013:$0-).
 
Cash Flows from Investing Activities

For the six month periods ended June 30, 2013 and June 20, 2012, net cash flows used in investing activities was $-0- .
 
 
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Cash Flows from Financing Activities

For the six month period ended June 30, 2012, net cash flows provided by financing activities was $406,350 consisting of proceeds from issuances of common stock. For the six month period ended June 30, 2012, net cash flows provided by financing activities was $73,400 consisting of $7,700 in subscriptions payable, $10,000 in subscriptions receivable and $55,700 in issuance of common stock.
 
PLAN OF OPERATION AND FUNDING

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) oil and gas operating properties; (ii) possible drilling initiatives on current properties and future properties; and (iii) future property acquisitions. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
 
MATERIAL COMMITMENTS

Consultant Agreements

Jackson Consultant Agreement

On October 1, 2010, we entered into a five year consulting agreement with Dr. Stewart Jackson, our then President/Chief Executive Officer (the “Consultant Agreement”). In accordance with the terms and provisions of the Consultant Agreement, we were to pay to Dr. Jackson a monthly compensation of $2,000, which could be paid by cash or issuance of shares of common stock priced at the ten-day average each month. After a change in management, we recognized the future remaining obligation based on the contract to Mr. Jackson and accrued it at its present value on the financial statements using a 12% discount rate over fifty-one months. This resulted in $89,596 being recorded as a related party debt. In addition to the $89,596, we have recorded interest expense of $21,791 through June 30, 2013 ($5,783 in 2013), for a total debt of $111,387. We are disputing this liability.

Figueiredo Consultant Agreement

On October 1, 2010, we entered into a one-year consulting agreement with David Figueiredo, our former President/Chief Executive Officer and member of the board of directors (the “Figueiredo Consultant Agreement”). In accordance with the terms and provisions of the Figueiredo Consultant Agreement, we were to pay to Mr. Figueiredo monthly compensation of $4,000. As of March 31, 2013, the amount owed to Mr. Figueiredo was $48,000 or the issuance of 1,600,000 shares of common stock at $0.03 per share. The company is disputing the amount owed based upon their contention that the services were not adequately performed. The company continues to accrue the liability until such time as a formal resolution is agreed upon.
 
 
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Convertible Promissory Notes – Related Party

Falco Investments Inc.

Effective on June 15, 2011 (the “Effective Date”), prior management signed a Board Resolution approving the issuance of a series of convertible promissory notes in various principal amounts (collectively, the “Convertible Promissory Notes”) with Falco Investments, Inc. (the “Creditor”), of which $271,331 represented principal. We believe prior management was not acting in the best interests of our Company when they approved the issuance of the Convertible Promissory Notes. We have recorded the balance of $806,975 due to Falco, of which $132,382 has been reported as a note payable – related party, $563,206 as a disputed liability – related party and $111,387 as accrued interest to June 30, 2013. We have decided to contest the current balance claimed to be due to Falco. See “Part II, Item 1. Legal Proceedings”.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

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 is material to stockholders.
 
GOING CONCERN

The independent auditors' report accompanying our December 31, 2012 and December 31, 2011 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates. 
 
Exchange Rate
 
Our reporting currency is United States Dollars (“USD”). In the event we acquire any properties outside of the United States, the fluctuation of exchange rates may have positive or negative impacts on our results of operations. However, since all of our properties are currently located within the United States, any potential revenue and expenses will be denominated in U.S. Dollar, and the net income effect of appreciation and devaluation of the currency against the U.S. Dollar would be limited to our costs of acquisition of property.
 
Interest Rate
 
Interest rates in the United States are generally stable. Any potential future loans will relate mainly to acquisition of properties and will be mainly short-term. However our debt may be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could become a significant impact on our operating and financing activities. We have not entered into derivative contracts either to hedge existing risks for speculative purposes.
 
 
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ITEM 4. CONTROLS AND PROCEDURES

FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president/chief executive officer and our secretary, treasurer/chief financial officer to allow for timely decisions regarding required disclosure.
 
As of June 30, 2013, the end of our fiscal quarter covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President/Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President/Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our financial reports as of the end of the period covered by this Quarterly Report. Non-effectiveness of disclosure controls was primarily a function of our increasing current scale and scope of operations.
 
Evaluation of Internal Controls and Procedures Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of June 30, 2013 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treasury Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
 
 
20

 
 
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of June 30, 2013.

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This quarterly report does not include an attestation report of the Corporation's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Corporation's registered public accounting firm pursuant to temporary rules of the SEC that permit the Corporation to provide only the management's report in this quarterly report.
 
Management’s Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

As of the date of this Quarterly Report, these initiatives have partially been implemented. We intend to have full implementation of the initiatives by December 31, 2013. Additionally, we plan to test our updated controls and remediate our deficiencies by quarter ended December 31, 2013.

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

AUDIT COMMITTEE

Our board of directors has not established an audit committee. The respective role of an audit committee has been conducted by our board of directors. We intend to establish an audit committee during fiscal year 2013. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our board of directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our b.
 
 
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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On August 9, 2011, a complaint was filed in the Supreme Court of British Columbia, File No. S-115321, by Falco Investments, Inc. ("Falco") naming us as a defendant (the "Complaint"). In the Complaint, Falco alleges that we owe $690,588 as compensation for corporate work performed by Falco through June 30, 2011. We have responded in our answer and stated that we do not owe the $690,588 for such services allegedly performed by Falco since there was no written contract between us and Falco. We have counterclaimed and named the former president/chief executive officer, Dr. Stewart Jackson and Donald Rutledge and Leslie Rutledge as defendants.

On May 13, 2013, shareholder Falco Investments and non-shareholder Leslie Rutledge filed a purported derivative lawsuit in the U.S. District Court for the District of Nevada, naming the Company as a nominal defendant and naming as defendants nine current or former officers and members of its board of directors, including Jerry Drew, Keith Tubandt, Allen Lopez, and Antonio B. Castillo, the board of directors collectively, and the company’s former outside counsel, Diane Dalmy, as defendants. The complaint alleges, among other things, that the individual defendants breached their fiduciary duties and/or wasted corporate assets or were unjustly enriched or engaged in gross mismanagement in relation to various actions, including “lowering” the company’s stock price, failing to maintain internal controls, interfering with the removal of restricted legends from certain free-trading shares, and failing to issue shares pursuant to certain convertible notes. The complaint seeks, among other things, an award of punitive damages to the plaintiffs, injunctive relief, disgorgement of compensation by the Company’s directors, and an order directing the Company to reform its corporate governance and internal procedures and attorney’s fees and costs. On August 12, 2013, certain of the defendants filed a motion to dismiss the lawsuit. However, the outcome of this litigation is uncertain.

On May 23, 2013, Double Crown Resources, Inc. initiated suit against Synergy Natural Resources, LLC in the United States District Court for the Southern District of Texas (Houston Division), requesting declaratory relief against defendant Synergy relating to alleged trade secrets and rights to patent protection on Double Crown’s transport system. Although Defendant Synergy failed to respond within the timeline provided by the Federal Rules of Civil Procedure and despite Double Crown’s request for entry of a default judgment, defendant Synergy filed an untimely answer on July 22, 2012, causing the Court to deny the request for default judgment. A pretrial and scheduling conference is presently set for September 20, 2013. 

Other than the three proceedings mentioned above, we are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

BATEMAN OPTION

In February 2013, we issued an aggregate of 2,727,300 shares of common stock to the Kwiatkowskis in accordance with the terms and provisions of the Option and conversion of a $30,000 debt. The aggregate of 2,727,300 shares of common stock were issued to non-United States resident in reliance on Regulation S promulgated under the Securities Act. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The Kwiatkowskis acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.
 
 
22

 

SHARES ISSUED

During the quarter ended March 31, 2013, we authorized the issuance of an aggregate of 26,336,640 shares of common stock to investors for $134,350 in cash at per share prices ranging from $0.005 to $0.0075. The aggregate of 26,336,640 shares of common stock were issued to United States residents in reliance on Regulation D promulgated under the Securities Act. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.

We also received $51,000 in cash during the quarter-ended March 31, 2013 for shares to be issued in the amount of 10,200,000.

During the three-month period ended June 30, 2013, we authorized the issuance of shares of our restricted common stock as follows:

During the quarter ended June 30, 2013 we issued 102,250,000 shares of stock. Of this amount 61,350,000 were issued for completed services valued at market which was between .03 and .04 per share; 29,200,000 for cash of $221,000; 1,700,000 shares of stock for debt satisfaction of $850; and 10,000,000 shares in satisfaction of the subscription payable of $50,000. The aggregate of 102,250,000 shares of common stock were issued to United States residents in reliance on Regulation D promulgated under the Securities Act. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.

SUBSEQUENT EVENTS – SHARE ISSUANCES

In July 2013, we issued 5,000,000 shares of stock for an investment of $50,000. The 5,000,000 shares of common stock were issued to United States residents in reliance on Regulation D promulgated under the Securities Act. The shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, and that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisition of the securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.
 
 
23

 
 
ITEM 5. OTHER INFORMATION.

DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

Members of Board of Directors

Effective on March 26, 2013, we accepted the resignations of Marc Duncan and Glenn Soler as members of the board of directors. Mr. Duncan and Mr. Soler did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Therefore, as of the date of this Quarterly Report, the board of directors consists of Jerry Drew, Allen Lopez, Keith Tubandt, and Antonio Castillo.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 
Exhibit Number
 
Description
 
 
 
3(i)
 
Articles of Incorporation (1)
 
 
 
3(ii) 
 
Bylaws (1)
 
 
 
10.1
 
Consulting Agreement dated October 1, 2010 between Denarii Resources Inc. and LV Media Group.(2)
 
 
 
10.2
 
Consulting Agreement dated October 1, 2010 between Denarii Resources Inc. and Paul Murphy. (2)
 
 
 
10.3
 
Consulting Agreement dated November 1, 2010 between Denarii Resources Inc. and Ariel Serrano.(2)
 
 
 
10.4
 
Consulting Agreement dated October 1, 2010 between Denarii Resources Inc. and Steve Claus. (2)
 
 
 
10.5
 
Consulting Agreement dated October 1, 2010 between Denarii Resources Inc. and David Figueiredo.(2)
 
 
 
10.6
 
Consulting Agreement dated October 1, 2010 between Denarii Resources Inc. and Stewart Jackson. (2)
 
 
 
10.7
 
Convertible Promissory Note between Denarii Resources Inc. and Falco Investments Inc. dated October 21, 2010 in the principal amount of $64,607.37. (3)
 
 
 
10.9 
 
Convertible Promissory Note between Denarii Resources Inc. and Falco Investments Inc. dated October 21, 2010 in the principal amount of $67,774.88. (3)
 
 
 
10.10 
 
Convertible Promissory Note between Denarii Resources Inc. and Falco Investments Inc. dated October 21, 2010 in the principal amount of $38,635.21. (3)
 
 
 
10.11
 
Convertible Promissory Note between Denarii Resources Inc. and Falco Investments Inc. dated October 21, 2010 in the principal amount of $60,186.33. (3)
 
 
 
10.12
 
Convertible Promissory Note between Denarii Resources Inc. and Falco Investments Inc. dated October 21, 2010 in the principal amount of $38,708.53. (3)
 
 
 
7.1
 
Letter of Agreement from Seale & Beers, CPA (4)
 
 
 
16.1
 
Letter from Seale & Beers, CPA (5)
 
 
 
99.1
 
Summary Report on the McNab Molybdenum Property, HowSound BC dated April 2006 by Greg Thomson B.Sc., P. Geo. and James Laird, Laird Exploration Ltd.
 
 
 
31.1
 
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.
 
 
 
31.2
 
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.
 
 
 
32.1
 
Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant To Section 906 of the Sarbannes-Oxley Act.
 
 
24

 
 
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
___________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
(1) Incorporated by reference from our Registration Statement on Form SB-2 filed with the Commission on June 16, 2006.

(2) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on March 21, 2011.

(3) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on November 12, 2010.

(4) Incorporated by reference from our Current Report on Form 8-K and 8-K/A filed with the Commission on April 21, 2010, May 12, 2010 and May 27, 2010.

(5) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on June 5, 2012.
 
 
25

 
 
SIGNATURES
 
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
DOUBLE CROWN RESOURCES INC.
 
 
 
 
 
Dated: August 16, 2013
By:
/s/ Jerry Drew
 
 
 
Jerry Drew
 
 
 
President/Chief Executive Officer
 
 
 
DOUBLE CROWN RESOURCES INC.
 
 
 
 
 
Dated: August 16, 2013
By:
/s/ Jerry Drew
 
 
 
Jerry Drew
 
 
 
Chief Financial Officer
 
 
 
 
 
 
 
 
 
26

EX-31.1 2 ddcc_ex311.htm CERTIFICATION ddcc_ex311.htm

EXHIBIT 31.1
 
CERTIFICATION

I, Jerry Drew, the Chief Executive Officer of Double Crown Resources, Inc. certify that:

1.
I have reviewed this report on Form 10-Q of Double Crown Resources, Inc.;
     
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     
 
a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b.
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
     
 
c.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on our evaluation; and
     
 
d.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
     
 
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: August 16, 2013
By:
/s/ Jerry Drew
 
   
Jerry Drew
 
   
Chief Executive Officer, President
 
 
EX-31.2 3 ddcc_ex312.htm CERTIFICATION ddcc_ex312.htm
EXHIBIT 31.2
 
CERTIFICATION

I, Jerry Drew, the Chief Financial Officer of Double Crown Resources, Inc. certify that:

1.
I have reviewed this report on Form 10-Q of Double Crown Resources, Inc.;
     
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     
 
a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b.
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
     
 
c.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on our evaluation; and
     
 
d.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
     
 
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: August 16, 2013
By:
/s/ Jerry Drew
 
   
Jerry Drew
 
   
Chief Financial Officer
 
 
EX-32.1 4 ddcc_ex321.htm CERTIFICATION ddcc_ex321.htm
EXHIBIT 32.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER OF
DOUBLE CROWN RESOURCES, INC.
FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2013
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Jerry Drew, am the Chief Executive and Chief Financial Officer of Double Crown Resources, Inc., a Nevada corporation (the "Company"). I am delivering this certificate in connection with the Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2013 and filed with the Securities and Exchange Commission ("Quarterly Report").
 
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I hereby certify that, to the best of my knowledge, the Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 16, 2013
By:
/s/ Jerry Drew
 
   
Jerry Drew
 
   
Chief Executive Officer and Chief Financial Officer
 
 
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