Golden Royal Development Inc. 2024 10-K Review

Introduction

Golden Royal Development Inc. ("Golden Royal") is a company engaged in the business of purchasing and selling mineral leases and other interests in mineral rights. The company was organized in 2016 and has since been involved in acquiring oil, gas, and mining properties. This review will delve into the company's 2024 10-K filing, examining its business operations, financial performance, risk factors, and overall investment potential.

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Business Overview

Golden Royal's primary business involves acquiring mineral leases, with a focus on oil, gas, and precious metals. The company holds several mineral interests in Wyoming, including leases in Converse County, Laramie County, and Crooks County. These leases grant Golden Royal the right to prospect for, develop, and market minerals such as oil, gas, gold, silver, and other precious metals.

However, the company currently lacks the resources, personnel, and infrastructure necessary to engage in active drilling or mining operations. As a result, Golden Royal's strategy is to hold these mineral interests as investments, hoping to capitalize on potential increases in their value due to factors like higher global energy prices or technological advancements.

Financial Performance

Golden Royal's financial performance for the fiscal year ended September 30, 2024, was marked by a net loss of $31,593, compared to a net loss of $60,308 in the previous year. The company recorded no revenue during this period, as it has not yet initiated any revenue-producing operations. Operating expenses for the year totaled $31,593, primarily consisting of professional fees and general administrative costs.

The company's balance sheet reveals a working capital deficit of $289,567 as of September 30, 2024, an increase from the previous year's deficit of $257,974. Golden Royal's cash position is precarious, with only $273 in cash on hand at the end of the fiscal year.

Cash Flow and Liquidity

Golden Royal's operations used $16,360 in cash during the fiscal year, with the cash shortfall primarily covered by advances from Jacob Roth, the company's Chief Executive Officer. The company has a significant reliance on Mr. Roth for financial support, as it lacks other sources of funding.

To initiate participation in mineral exploration projects, Golden Royal estimates it will require approximately $2.5 million in capital. The company plans to raise this capital through the issuance of equity securities, but as of the filing date, no commitments for funds have been secured.

Risk Factors

Golden Royal faces several significant risk factors that could impact its business and financial condition:

1. Going Concern Doubt: The company's auditor has expressed substantial doubt about Golden Royal's ability to continue as a going concern due to its recurring losses and lack of revenue.
2. Dependence on Financing: Golden Royal's ability to sustain operations and expand its mineral interests is heavily dependent on securing additional financing. Without it, the company may not be able to continue its business development.
3. Market Competition: The mineral exploration and mining industry is highly competitive, with many companies possessing greater resources and capabilities than Golden Royal.
4. Regulatory Risks: Changes in government regulations or policies could adversely affect the company's ability to operate and its profitability.
5. Concentration of Ownership: Jacob Roth, the company's CEO, owns a majority of the outstanding common stock, giving him significant control over corporate matters.

Conclusion

Golden Royal Development Inc. presents a high-risk investment opportunity. The company's lack of revenue, significant financial deficits, and reliance on external financing pose substantial challenges to its long-term viability. While the potential for increased mineral lease values exists, the company's current financial condition and operational limitations make it a speculative investment.

Investors should carefully consider these factors and the associated risks before deciding to invest in Golden Royal. The company's future success hinges on its ability to secure financing, develop its mineral interests, and generate revenue from its operations.