UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-K

_________________

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

For the fiscal
year ended: August 31, 2012

or

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

For the transition
period from: _____________ to _____________

_________________

Royal Energy Resources,
Inc.

(Exact name of registrant
as specified in its charter)

_________________

|Delaware                          | 000-52547    | 11-3480036         
|--------------------------------- | ------------ | -------------------
|(State or Other Jurisdiction      | (Commission  | (I.R.S. Employer   
|of Incorporation or Organization) | File Number) | Identification No.)

543 Bedford
Ave, #176, Brooklyn, NY 11211
(Address of Principal Executive Offices) (Zip Code)

800-620-3029
(Registrant’s telephone number, including area code)

Securities registered
pursuant to Section 12(b) of the Act:

Title of each class
- None
Name of each exchange on which registered – N/A

Securities registered
pursuant to Section 12(g) of the Act:

Title of each class –
Common Stock, $0.00001 Par Value
Name of each exchange on which registered – N/A

_________________

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     YesoNoþ

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     YesoNoþ

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

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 (§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).     YesoNoþ

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     YesþNoo

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.

|Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting companyo
|------------------------ | ------------------ | ---------------------- | --------------------------



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     YesoNoþ

State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price
at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter. $216,069.

Note.—If
a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort
and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions
reasonable under the circumstances, provided that the assumptions are set forth in the Form.



(APPLICABLE ONLY
TO CORPORATE REGISTRANTS

Indicate
the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
As of December 10, 2012, the registrant had outstanding 179,527 shares of its common stock, par value of $0.00001 and 100,000
shares of its preferred stock, par value $0.00001.

DOCUMENTS INCORPORATED
BY REFERENCE

List
hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3)
Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described
for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).



















Royal Energy Resources, Inc.

Table of Contents

Form 10-K











|            |  |                                                                                                                  | Page
|----------- |  | ---------------------------------------------------------------------------------------------------------------- | ----
|            |  | PART
    I                                                                                                       |     
|Item
    1  |  | Business                                                                                                         | 2   
|Item
    1A |  | Risk
    Factors                                                                                                 | 7   
|Item
    1B |  | Unresolved
    Staff Comments                                                                                    | 7   
|Item
    2  |  | Properties                                                                                                       | 7   
|Item
    3  |  | Legal
    Proceedings                                                                                            | 9   
|Item
    4  |  | [Removed
    and Reserved]                                                                                       | 9   
|            |  |                                                                                                                  |     
|            |  | PART
    II                                                                                                      |     
|Item
    5  |  | Market
    for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 10  
|Item
    6  |  | Selected
    Financial Data                                                                                      | 11  
|Item
    7  |  | Management's
    Discussion and Analysis of Financial Condition and Results of Operations                        | 11  
|Item
    7A |  | Quantitative
    and Qualitative Disclosures About Market Risk                                                   | 14  
|Item
    8  |  | Financial
    Statements and Supplementary Data                                                                  | 14  
|Item
    9  |  | Changes
    in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 32  
|Item
    9A |  | Controls
    and Procedures                                                                                      | 32  
|Item
    9B |  | Other
    Information                                                                                            | 32  
|            |  |                                                                                                                  |     
|            |  | PART
    III                                                                                                     |     
|Item
    10 |  | Directors,
    Executive Officers and Corporate Governance                                                       | 33  
|Item
    11 |  | Executive
    Compensation                                                                                       | 33  
|Item
    12 |  | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               | 34  
|Item
    13 |  | Certain
    Relationships and Related Transactions, and Director Independence                                    | 36  
|Item
    14 |  | Principal
    Accountant Fees and Services                                                                       | 36  
|            |  |                                                                                                                  |     
|PART
    IV |  |                                                                                                                  |     
|Item
    15 |  | Exhibits
    and Financial Statement Schedules                                                                   | 37  
|            |  |                                                                                                                  |     









From
time to time, we may publish forward-looking statements relative to such matters as anticipated financial results, business prospects,
technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. The following discussion and analysis should be read in conjunction with the report on the Consolidated
Financial Statements and the accompanying Notes to Consolidated Financial Statements appearing later in this report. All statements
other than statements of historical fact included in this Annual Report on Form 10-K are, or may be deemed to be, forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of
1934, as amended. Important factors that could cause actual results to differ materially from those discussed in such forward-looking
statements include, but are not limited to, the following: our current liquidity needs, as described in our periodic reports;
changes in the economy; our inability to raise additional capital; our involvement in potential litigation; volatility of our
stock price; the variability and timing of business opportunities; changes in accounting policies and practices; the effect of
internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or
catastrophic events and terrorist acts. These factors and others involve certain risks and uncertainties that could cause actual
results or events to differ materially from management’s views and expectations. Inclusion of any information or statement
in this report does not necessarily imply that such information or statement is material. We do not undertake any obligation to
release publicly revised or updated forward-looking information, and such information included in this report is based on information
currently available and may not be reliable after this date.











PART
I



Item
1:	 Business



ORGANIZATION



Royal
Energy Resources, Inc. (“RER” or the “Company”) was originally organized in Delaware on March 22, 1999,
with the name Webmarketing, Inc. (“Webmarketing”). On July 7, 2004, the Company revived its charter and changed its
name from Webmarketing to World Marketing, Inc.



The
Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada and
mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties.



On
August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of
our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our
issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares
of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October
1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when
the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the
change took place before the date of the earliest transaction reported.



On
April 1, 2011, the Company, through its CEO completed the initial stages of forming a Romanian subsidiary to be used to acquire
and develop possible gold, silver and copper mining concessions in Romania. The subsidiary, S.C. Golden Carpathan Resources S.R.L.,
will be located in Bucharest, Romania.



On
November 5, 2007, the Company filed its Definitive Information Statement on Schedule 14C to report the following corporate actions:



|1 |  | To approve an amendment to the Company’s Articles of Incorporation to increase
the Company’s authorized capital to 110,000,000 shares comprising 100,000,000 shares of common stock par value $0.00001
per share and 10,000,000 shares of preferred stock par value $0.00001 per share;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 |  | To specifically delineate the rights of the holders of common stock $0.00001 par value
with respect to dividends, liquidation and voting rights;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

|3 |  | To confirm the right of the Company’s board of directors to designate and issue
from time to time, in one or more series, shares of preferred stock par value $0.00001 per share subject to such designations
and powers, preferences and rights, and qualifications, limitations and restrictions thereof hereinafter adopted by the Company’s
board of directors;
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4 |  | To specifically delineate the right of the Company’s board of directors to issue
shares of common and preferred stock for such consideration as may be determined by the Company’s board of directors (but
not less than par value) and to issue rights or options to acquire such shares on terms and conditions to be determined by the
Company’s board of directors; and
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5 |  | To change the name of the Company to Royal Energy Resources, Inc.f the Company to
Royal Energy Resources, Inc.
|- |  | --------------------------------------------------------------------------------------------------------------







The
foregoing became effective on December 12, 2007, upon filing the amendment with the Delaware Secretary of State.







RER
was organized in 1999 and attempted to start a web-based marketing business for health-care products. The health-care products
business had no revenue and was discontinued in 2001 and the Company remained inactive until July 22, 2005 when it commenced its
real estate business. Accordingly, the current development stage has a commencement date of July 22, 2005 and all prior losses
of $28,995 have been transferred to accumulated deficit.



BUSINESS



As
a result of the current real estate market, the Company expects to concentrate the majority of its resources in energy projects.



ENERGY
AND MINING





The
Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada and
mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties. At
August 31, 2012 and August 31, 2011, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook
County, Wyoming, respectively. There are leases for 1,280 acres pending. The rare earth and precious metals leases are approximately
5-15 miles from Bear Lodge Mountain near Sundance, Wyoming. The U.S. Geological Survey has studied Bear Lodge Mountain extensively
(USGS Prof. paper #1049-D) and has estimated it contains one of the largest deposits of disseminated rare earth elements in North
America.



In
addition, the Company holds the lease for uranium rights on approximately 960 acres in Laramie County, Wyoming as of August 31,
2012 and August 31, 2011, respectively. The uranium rights are located on a trend approximately 25-30 miles from a proposed uranium
mine in Weld County, Colorado which was estimated to have uranium reserves valued at over $500 million.





UNDEVELOPED
LEASEHOLD NOT BEING AMORTIZED



The
Company has been the successful bidder in United States Government auctions to purchase certain oil and gas lease rights. The
oil and gas leases comprised approximately 3,000 acres in Weston, Goshen, Converse, Freemont, Laramie and Platt Counties, Wyoming
as of August 31, 2011. At August 31, 2012, all leases covering oil and gas lease rights had been sold with an overriding royalty
interest retained. As of August 31, 2012, the Company had collected approximately $89,000 from sales of leases and royalty interests.



The
Company is negotiating with energy companies to develop the potential resources that may be contained in these properties. The
Company has entered into agreements and then sold, by assignment, the rights, title and interest in certain of these leases and
retained an over-riding royalty interest. Revenue from these transactions is accounted for using the full cost method of accounting.

OIL
AND GAS DRILLING PROSPECTS



During
2008, the Company prepaid $119,011 as estimated drilling and completion costs for a 25% working interest in three wells in Washington
County, Oklahoma. Two of the wells were completed in September and October 2008 and the third well was abandoned in 2010. During
2009, the Company advanced an additional $42,000, net, to apply toward workover of three additional wells. These workovers proved
unsuccessful and the wells were all abandoned.



REAL
ESTATE



Our
primary objective was to acquire, make necessary renovations and resell both residential and commercial real estate. It was anticipated
that we might lease some of the properties while they were being held for sale. We completed the acquisition of our first property
on August 25, 2005, a condominium located in Brooklyn, New York, in exchange for $25,000 in cash and 3,800 shares of our common
stock which was valued at $190,000. We received a deed to the property and there was no mortgage on the preparatory nor are there
any liens on the property.



In
March 2008, the Company entered into a rescission agreement to return the real estate that it previously held to the individual
who originally transferred the property in exchange for 3,800 shares of the Company’s common stock. The original value of
the real estate was $215,000 and upon the rescission was valued at $200,000. The Company has recorded a loss of $15,000 on this
transaction during this period, upon transferring the real estate to the original seller and canceling the 13,800 shares.



As
a result of the current real estate environment in the United States, we are currently limiting any potential acquisitions to
Eastern European countries. The real estate will be sold directly by us to the extent deemed practical. If necessary, broker services
will be used to expedite a given sale.











OTHER

Mr.
Roth, our President, Chief Executive Officer and Chief Financial Officer, is our sole active employee. Mrs. Taub, our Secretary
and Treasurer, will not be active in our day-to-day operations.



RER
does not have any plans or arrangements to merge with another company or otherwise engage in a transaction that would change the
control of RER.



The
mailing address of the Company is 543 Bedford Avenue, #176, Brooklyn, New York 11211 and our telephone number is 800-620-3029.



FINANCIAL
POSITION AND FUTURE FINANCING NEEDS



We
are a development stage company. We have not previously been in the energy business, or in the business of acquiring, renovating
and selling or leasing real estate.



We
have not established sources of revenues sufficient to fund the development of business, projected operating expenses and commitments
for our fiscal year ending August 31, 2013. We have been in the development stage since our inception, March 22, 1999, have accumulated
a net loss of $3,302,519 through August 31, 2012, and incurred a loss of $126,252 for the year then ended.

RER
was organized in 1999 and attempted to start a web-based marketing business for health-care products. The health-care products
business had no revenue and was discontinued in 2001 and the Company remained inactive until July 22, 2005 when it commenced its
real estate business. Accordingly, the current development stage has a commencement date of July 22, 2005 and all prior losses
of $28,995 have been transferred to accumulated deficit.

The
Company sold its common stock in private transactions which raised $120,500 in 2006, $80,070 in 2007, $413,172 in 2008, $3,600
in 2009 and $7,500 in 2012. The Company plans to make sales of its common stock in private transactions or to borrow funds as
needed to raise sufficient capital to fund the development of business, projected operating expenses and commitments. However,
there can be no assurance that we will be able to obtain sufficient funding to develop our current business plan.

COMPETITION



ENERGY
AND MINING

The
Company expects to concentrate the majority of its resources in oil and gas and mining by acquiring leasehold interests and either
selling or farming them out to other companies for development, while retaining an over-riding royalty interest. The Company had
elected to participate in the development of certain properties in Oklahoma. The Company is much smaller than most participants
in this industry and has limited expertise in operating energy and mining businesses.



REAL
ESTATE

The
first competitive consideration is to locate real estate for purchase that is within the Company’s pricing limitations and
is considered to be priced right for the market in that particular area. The competition for real estate is intense, and includes
firms as small as one person working out of their home to multi-national conglomerates.



Once
a property is acquired, the first task is to complete necessary repairs and renovations. When the property is available for sale,
the major risk factor is to conclude a profitable sale. In this regard, a problem with some properties is the individuals who
agree to a purchase contract may not be qualified to receive mortgage financing. The time period of removing the property from
the market and then discovering that the purchaser is not mortgage qualified is costly in terms of reduced profits when a sale
is concluded.



The
profit potential to the Company is wholly dependent upon the ability of its officers and employees to purchase property and resell
it at a price level which will provide profits to the Company. There is no assurance that these objectives will be realized. It
is reasonable to assume that any property acquired and prepared for resale will eventually be sold. However, it may be that an
eventual resale will be at a loss.



Because
of the nature of this business there are no statistics that indicate the number of investors in the business or the financial
extent of their activities. The Company will basically be in the same competitive position as any other investor seeking to purchase
real estate in our anticipated price range. The Company rescinded the purchase of the real estate property it had during the quarter
ended May 31, 2008 and currently is limiting any potential real estate acquisitions to Eastern European countries, due to the
current real estate environment in the United States.









GOVERNMENTAL
REGULATIONS, APPROVAL, COMPLIANCE



ENERGY
AND MINING

If
we elect to participate directly in development of oil and gas properties, our operations are or will be subject to various types
of regulation at the federal, state and local levels. Such regulations includes requiring permits for the drilling of wells; maintaining
bonding requirements in order to drill or operate wells; implementing spill prevention plans; submitting
notification and receiving permits relating to the presence, use and release of certain materials incidental to oil and gas operations;
and regulating the location of wells, the method of drilling and casing wells, the use, transportation, storage and disposal of
fluids and materials used in connection with drilling and production activities, surface usage and the restoration of properties
upon which wells have been drilled, the plugging and abandoning of wells and the transporting of production. Our operations are
or will be also subject to various conservation matters, including the regulation of the size of drilling and spacing units or
pro-ration units, the number of wells which may be drilled in a unit, and the unitization or pooling of oil and gas properties.
In this regard, some states allow the forced pooling or integration of tracts to facilitate exploration while other states rely
on voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas properties. In addition, state
conservation laws establish maximum rates of production from oil and gas wells, generally limit the venting or flaring of gas,
and impose certain requirements regarding the ratable purchase of production. The effect of these regulations is to limit the
amounts of oil and gas we may be able to produce from our wells and to limit the number of wells or the locations at which we
may be able to drill.



Our
business is affected by numerous laws and regulations, including energy, environmental, conservation, tax and other laws and regulations
relating to the oil and gas industry. We plan to develop internal procedures and policies to ensure that our operations are conducted
in full and substantial environmental regulatory compliance.



Failure
to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition
of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on business.
In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us,
we cannot predict the overall effect of such laws and regulations on our future operations.



We
believe that our operations comply in all material respects with applicable laws and regulations and that the existence and enforcement
of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in the energy
industry. We do not anticipate any material capital expenditures to comply with federal and state environmental requirements.



ENVIRONMENTAL



ENERGY
AND MINING

Operations
on properties in which we have an interest are subject to extensive federal, state and local environmental laws that regulate
the discharge or disposal of materials or substances into the environment and otherwise are intended to protect the environment.
Numerous governmental agencies issue rules and regulations to implement and enforce such laws, which are often difficult and costly
to comply with and which carry substantial administrative, civil and criminal penalties and in some cases injunctive relief for
failure to comply.



Some
laws, rules and regulations relating to the protection of the environment may, in certain circumstances, impose “strict
liability” for environmental contamination. These laws render a person or company liable for environmental and natural resource
damages, cleanup costs and, in the case of oil spills in certain states, consequential damages without regard to negligence or
fault. Other laws, rules and regulations may require the rate of oil and gas production to be below the economically optimal rate
or may even prohibit exploration or production activities in environmentally sensitive areas. In addition, state laws often require
some form of remedial action, such as closure of inactive pits and plugging of abandoned wells, to prevent pollution from former
or suspended operations.



Legislation
has been proposed in the past and continues to be evaluated in Congress from time to time that would reclassify certain oil and
gas exploration and production wastes as “hazardous wastes.” This reclassification would make these wastes subject
to much more stringent storage, treatment, disposal and clean-up requirements, which could have a significant adverse impact on
operating costs. Initiatives to further regulate the disposal of oil and gas wastes are also proposed in certain states from time
to time and may include initiatives at the county, municipal and local government levels. These various initiatives could have
a similar adverse impact on operating costs.



The
regulatory burden of environmental laws and regulations increases our cost and risk of doing business and consequently affects
our profitability. The federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, also known as
the “Superfund” law, imposes liability, without regard to fault, on certain classes of persons with respect to the
release of a “hazardous substance” into the environment. These persons include the current or prior owner or operator
of the disposal site or sites where the release occurred and companies that transported, disposed or arranged for the transport
or disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances
under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been
released into the environment and for damages to natural resources, and it is not uncommon for the federal or state government
to pursue such claims.



It
is also not uncommon for neighboring landowners and other third parties to file claims for personal injury or property or natural
resource damages allegedly caused by the hazardous substances released into the environment. Under CERCLA, certain oil and gas
materials and products are, by definition, excluded from the term “hazardous substances.” At least two federal courts
have held that certain wastes associated with the production of crude oil may be classified as hazardous substances under CERCLA.
Similarly, under the federal Resource, Conservation and Recovery Act, or RCRA, which governs the generation, treatment, storage
and disposal of “solid wastes” and “hazardous wastes,” certain oil and gas materials and wastes are exempt
from the definition of “hazardous wastes.” This exemption continues to be subject to judicial interpretation and increasingly
stringent state interpretation. During the normal course of operations on properties in which we have an interest, exempt and
non-exempt wastes, including hazardous wastes, that are subject to RCRA and comparable state statutes and implementing regulations
are generated or have been generated in the past. The federal Environmental Protection Agency and various state agencies continue
to promulgate regulations that limit the disposal and permitting options for certain hazardous and non-hazardous wastes.









We
plan to establish guidelines and management systems to ensure compliance with environmental laws, rules and regulations if we
participate directly in the development of oil and gas resources. The existence of these controls cannot, however, guarantee total
compliance with environmental laws, rules and regulations. We will rely on the operator of the properties in which we have an
interest to be in substantial compliance with applicable laws, rules and regulations relating to the control of air emissions
at all facilities on those properties. Although we plan to maintain insurance against some, but not all, of the risks described
above, including insuring the costs of clean-up operations, public liability and physical damage, there is no assurance that our
insurance will be adequate to cover all such costs, that the insurance will continue to be available in the future or that the
insurance will be available at premium levels that justify our purchase. The occurrence of a significant event not fully insured
or indemnified against could have a material adverse effect on our financial condition and operations. Compliance with environmental
requirements, including financial assurance requirements and the costs associated with the cleanup of any spill, could have a
material adverse effect on our capital expenditures, earnings or competitive position. We do believe, however, that our operators
are in substantial compliance with current applicable environmental laws and regulations. Nevertheless, changes in environmental
laws have the potential to adversely affect operations. At this time, we have no plans to make any material capital expenditures
for environmental control facilities.



Employees



It
is anticipated that the only active employee of this business in the near future will be its President. All other operative functions,
such as repairs and/or renovations to the real estate or acquiring energy investments will be handled by the President or independent
contractors and consultants.





Item
1A: 	RISK FACTORS



Not
applicable.



Item
2: 	PropertIES



MINING



The
Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada and
mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties. At
August 31, 2012 and August 31, 2011, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook
County, Wyoming, respectively. There are leases for 1,280 acres pending. The rare earth and precious metals leases are approximately
5-15 miles from Bear Lodge Mountain near Sundance, Wyoming. The U.S. Geological Survey has studied Bear Lodge Mountain extensively
(USGS Prof. paper #1049-D) and has estimated it contains one of the largest deposits of disseminated rare earth elements in North
America.

In
addition, the Company holds the lease for uranium rights on approximately 960 acres in Laramie County, Wyoming as of August 31,
2012 and August 31, 2011, respectively. The uranium rights are located on a trend approximately 25-30 miles from a proposed uranium
mine in Weld County, Colorado which was estimated to have uranium reserves valued at over $500 million.





UNDEVELOPED
LEASEHOLD NOT BEING AMORTIZED



The
Company has been the successful bidder in United States Government auctions to purchase certain oil and gas lease rights. The
oil and gas leases comprised approximately 3,000 acres in Weston, Goshen, Converse, Freemont, Laramie and Platt Counties, Wyoming
as of August 31, 2011. At August 31, 2012, all leases covering oil and gas lease rights had been sold with an overriding royalty
interest retained.



The
Company is negotiating with energy companies to develop the potential resources that may be contained in these properties. The
Company has entered into agreements and then sold, by assignment, the rights, title and interest in certain of these leases and
retained an over-riding royalty interest. Revenue from these transactions is accounted for using the full cost method of accounting.









OIL
AND GAS DRILLING PROSPECTS



During
2008, the Company prepaid $119,011 as estimated drilling and completion costs for a 25% working interest in three wells in Washington
County, Oklahoma. Two of the wells were completed in September and October 2008 and the third well was abandoned in 2010. During
2009, the Company advanced an additional $42,000, net, to apply toward workover of three additional wells. The work on the workover
wells was completed during 2010 without obtaining commercial production. Effective October 1, 2010, the Company's interest in
the two producing wells were sold.



Proved
Reserves and Estimated Future Net Revenue

The
SEC defines proved oil and gas reserves as the estimated quantities of crude oil and natural gas that geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and
operating conditions, i.e. prices and costs as of the date the estimate is made. Prices include consideration of changes in existing
prices provided only by contractual arrangements, but not on escalations based upon future conditions.



The
process of estimating oil and natural gas reserves is complex and requires significant judgment. Our policies regarding booking
reserves require proved reserves to be in compliance with the SEC definitions and guidance. With the sale of our only producing
reserves effective October 1, 2010, we have no proved reserves at August 31, 2012 and 2011.



Drilling
Activities

The
following table summarizes the results of our development drilling activity for the years ended August 31, 2012, 2011, 2010, 2009
and 2008. The Company has not had any exploratory drilling activity.



|Development Well Activity  |               
|-------------------------- | --------------
|                           |               
|                           | Wells Drilling
|                           | Gross (1)     
|                           |               
|Year ended August 31, 2012 | -             
|Year ended August 31, 2011 | -             
|Year ended August 31, 2010 | -             
|Year ended August 31, 2009 | 2.00          
|Year ended August 31, 2008 | 2.00          





| | (1) | Gross
                                                                                                     wells are the sum of all
                                                                                                     wells in which we own an
                                                                                                     interest.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Net
                                                                                                     wells are gross wells multiplied
                                                                                                     by our fractional working
                                                                                                     interests therein.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Both
wells drilling at August 31, 2008, were completed as productive oil wells in September and October 2008.



The
initial properties in which the Company participated involved the well bore only and did not include any acreage. The Company
had the right to participate in additional wells in this prospect until the properties were sold effective October 1, 2010.



Operation
of Properties

Currently,
the Company does not have the infrastructure necessary to operate oil and gas properties and relies on other companies to provide
operations.



Title
to Properties

Title
to properties is subject to contractual arrangements customary in the oil and gas industry, liens for current taxes not yet due
and, in some instances, other encumbrances. We believe that such burdens do not materially detract from the value of such properties
or from the respective interests therein or materially interfere with their use in the operation of the business.



As
is customary in the industry, other than a preliminary review of local records, little investigation of record title is made at
the time of acquisitions of undeveloped properties. Investigations, which generally include a title opinion of outside counsel,
are made prior to the consummation of an acquisition of producing properties and before commencement of drilling operations on
undeveloped properties.



MINING

The
Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada and
mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties. At
August 31, 2012 and August 31, 2011, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook
County, Wyoming, respectively. There are leases for 1,280 acres pending. The rare earth and precious metals leases are approximately
5-15 miles from Bear Lodge Mountain near Sundance, Wyoming. The U.S. Geological Survey has studied Bear Lodge Mountain extensively
(USGS Prof. paper #1049-D) and has estimated it contains one of the largest deposits of disseminated rare earth elements in North
America.

In
addition, the Company holds the lease for uranium rights on approximately 960 acres in Laramie County, Wyoming as of August 31,
2012 and August 31, 2011, respectively. The uranium rights are located on a trend approximately 25-30 miles from a proposed uranium
mine in Weld County, Colorado which was estimated to have uranium reserves valued at over $500 million.









UNDEVLOPED
LEASEHOLD NOT BEING AMORTIZED

These
leases are separate from those included above and are being held primarily for resale while retaining an over-riding royalty interest.
As of August 31, 2011, we owned oil and gas leases comprising approximately 3,000 acres in Wyoming,. At August 31, 2012, all leases
covering oil and gas lease rights had been sold with an overriding royalty interest retained.



REAL
ESTATE

On
August 25, 2005, we acquired our first real estate property, a residential condominium located in Brooklyn, New York, in exchange
for $25,000 in cash and 3,800 shares of our common stock which was valued at $190,000.

In
March 2008, the Company entered into a rescission agreement to return the real estate that it previously held to the individual
from whom we originally acquired the property in exchange for 3,800 shares of the Company’s common stock. The original value
of the real estate was $215,000 and upon the rescission was valued at $200,000. The Company recorded a loss of $15,000 on this
transaction during 2008.





Item
3:	LEGAL PROCEEDINGS



There
are no pending or threatened lawsuits against us.



Item
4: 	[REMOVED AND RESERVED]











PART
II



Item
5:	Market for REGISTRANT’S Common Equity, Related Stockholder Matters and issuer purchases of equity securities



|(a) |  | MARKET INFORMATION
|--- |  | ------------------



Our
$0.00001 par value per share common stock is traded in the over-the-counter market and is quoted on the National Association of
Securities Dealers (“NASD”) Over-The Counter Bulletin Board (“OTCBB”) under the symbol “ROYE.OB.”
Until we began trading on September 5, 2007, there was no public market for our common stock. Previously we traded under the symbol
WRLM.OB.



On
August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of
our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our
issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares
of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October
1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when
the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the
change took place before the date of the earliest transaction reported.



The
following table sets forth the quarterly high and low daily close for our common stock as reported by the OTCBB for the two years
ended August 31, 2012 and 2010. The bids reflect inter dealer prices without adjustments for retail mark-ups, mark-downs or commissions
and may not represent actual transactions.

|Period                              | High             |  | Low            
|----------------------------------- | ---------------- |  | ---------------
|                                    |                  |  |                
|2012                                |                  |  |                
|Quarter
    ended August 31, 2012   | $      
    2.00 |  | $     
    0.59
|Quarter
    ended May 31, 2012      | $      
    2.50 |  | $     
    1.16
|Quarter
    ended February 29, 2012 | $      
    2.50 |  | $     
    1.94
|Quarter
    ended November 30, 2011 | $      
    1.94 |  | $     
    1.94
|                                    |                  |  |                
|2011                                |                  |  |                
|Quarter
    ended August 31, 2011   | $    
    15.00  |  | $     
    5.00
|Quarter
    ended May 31, 2011      | $    
    40.00  |  | $  
    10.00  
|Quarter
    ended February 28, 2011 | $    
    55.00  |  | $     
    5.00
|Quarter
    ended November 30, 2010 | $    
    20.00  |  | $     
    5.00



The
OTCBB is a quotation service sponsored by the NASD that displays real-time quotes and volume information in over-the-counter (“OTC”)
equity securities. The OTCBB does not impose listing standards or requirements, does not provide automatic trade executions and
does not maintain relationships with quoted issuers. A company traded on the OTCBB may face loss of market makers and lack of
readily available bid and ask prices for its stock and may experience a greater spread between the bid and ask price of its stock
and a general loss of liquidity with its stock. In addition, certain investors have policies against purchasing or holding OTC
securities. Both trading volume and the market value of our securities have been, and will continue to be, materially affected
by the trading on the OTCBB.



PENNY
STOCK CONSIDERATIONS



Our
shares will be “penny stocks” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity
securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure
requirements on broker-dealers who engage in certain transactions involving a penny stock.



Under
the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited
investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written
consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net
worth in excess of $1,000,000, or annual income exceeding $100,000 individually or $300,000 together with his or her spouse, is
considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:



|1 |  | Deliver, prior to any
transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the
penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 |  | Disclose commissions
payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|3 |  | Send monthly statements
disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value
and information regarding the limited market in penny stocks; and
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4 |  | Make a special written
determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement
to the transaction, prior to conducting any penny stock transaction in the customer’s account.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because
of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may
affect the ability of selling shareholders or other holders to sell their shares in the secondary market and have the effect of
reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could
impede the sale of our securities, if our securities become publicly traded. In addition, the liquidity for our securities may
be decrease, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such
penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.







RECENT
SALES OF UNREGISTERED SECURITIES



During
the quarter ended August 31, 2012, we sold 6,000 shares of our common stock for $7,500 in cash and issued 2,000 shares of our
common stock for a consulting agreement valued at $2,500.



|(b) |  | HOLDERS
|--- |  | -------



There
are approximately 85 shareholders of record of the Company’s common stock at August 31, 2012.



|(c) |  | DIVIDENDS
|--- |  | ---------



The
Company has not paid dividends to date and has no plans to do so in the foreseeable future.



| | (d) | SECURITIES
                                                           AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
| | --- | -----------------------------------------------------------------------------------------------------------------------------



The
following table summarizes certain information as of August 31, 2012, with respect to compensation plans (including individual
compensation arrangements) under which our common stock is authorized for issuance:



|                              | Number
    of securities to be |  |                                  |  |                         
|----------------------------- | ------------------------------ |  | -------------------------------- |  | ------------------------
|                              | issued
    upon exercise of    |  | Weighted
    average exercise    |  | Number
    of securities
|                              | outstanding
    options,       |  | price
    of outstanding         |  | remaining
    available 
|Plan
    category             | warrants
    and rights        |  | options,
    warrants and rights |  | for
    future issuance 
|                              |                                |  |                                  |  |                         
|Equity
    compensation plans |                                |  |                                  |  |                         
|approved by security holders: |                                |  |                                  |  |                         
|2008 Plan                     | -                              |  |                                  |  | 8,000                   
|                              | -                              |  |                                  |  | 8,000                   



The
Royal Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on June 27, 2008 and reserves 8,000 shares
for Awards under the Plan, of which up to 6,000 may be designated as Incentive Stock Options. The Company’s Compensation
Committee is designated to administer the Plan at the direction of the Board of Directors.





Item
6:	SELECTED FINANCIAL DATA



Not
applicable.





Item
7:	Management’s Discussion and Analysis OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



This
statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking
statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including, without limitation, the matters set forth in this statement.



Oil
and gas sales

The
Company had $17,000 in oil and gas lease sales in 2012 and none in 2011.









Costs
and expenses

Costs
and expenses consist of the following for the years ended August 31, 2012 and 2011.



|                                                  |  |   | 2012    |  |  |   | 2011    | 
|------------------------------------------------- |  | - | ------- |  |  | - | ------- | 
|Cost of leases sold                               |  | $ | 13,260  |  |  | $ | —       | 
|Lease operating expense                           |  |   | —       |  |  |   | 504     | 
|Non-cash compensation                             |  |   | 55,986  |  |  |   | 175,309 | 
|Other selling, general and administrative expense |  |   | 71,761  |  |  |   | 85,268  | 
|                                                  |  | $ | 141,007 |  |  | $ | 261,081 | 



Cost
of leases sold includes the balance of the Company’s capitalized costs associated with unproved properties not being amortized
under the full cost method.



Lease
operating expense, production taxes and depreciation, depletion and amortization relate to the oil and gas revenue which ceased
in 2010.



Non-cash
compensation includes $55,986 and $175,309 in 2012 and 2011, respectively, in compensation to consultants pursuant to consulting
agreements.The agreements cover periods ranging from 2.5 months to 16.5 months and the related fair value of the shares
and options are being amortized over the life of the agreements.



Other
selling, general and administrative expense decreased from $85,268 in 2011 to $71,761 in 2012. The decrease includes a decrease
in accounting and auditing of $5,953, a decrease in bad debt expense of $9,619, a decrease in legal and professional costs of
$8,022, a decrease in website expense of $5,988 and an increase in cash consulting fees of $26,429.



Other
expense (income):

Other
expense (income) consists of the following for the years ended August 31, 2012 and 2011.



|                                     |  |   | 2012   |   |  |   | 2011   |  
|------------------------------------ |  | - | ------ | - |  | - | ------ | -
|Interest expense                     |  | $ | 8,497  |   |  | $ | 18,063 |  
|Interest income from related parties |  |   | (6,252 | ) |  |   | (8,727 | )
|                                     |  | $ | 2,245  |   |  | $ | 9,336  |  

Interest
expense decreased in 2012 from 2011, primarily due to the 2011 amount including debt with a higher average interest rate.

Interest
income was accrued on the stock subscription receivables (related parties) in 2012 and 2011.



Going
Concern Factors—Liquidity



We
are a development stage company. We have not previously been in the energy business or in the business of acquiring, renovating
and selling or leasing real estate.



We
have not established sources of revenues sufficient to fund the development of business, projected operating expenses and commitments
for our fiscal year ending August 31, 2012. The Company, has accumulated a net loss of $3,302,519 through August 31, 2012, ($28,995
in an earlier development stage business and $3,273,524 in the current development stage) and incurred losses of $126,252 for
the year then ended.



RER
was organized in 1999 and attempted to start a web-based marketing business for health-care products. The health-care products
business had no revenue and was discontinued in 2001 and the Company remained inactive until July 22, 2005 when it commenced its
real estate business. Accordingly, the current development stage has a commencement date of July 22, 2005 and all prior losses
of $28,995 have been transferred to accumulated deficit.

The
Company sold its common stock in private transactions which raised $120,500 in 2006, $80,070 in 2007, $413,172 in 2008, $3,600
in 2009 and $7,500 in 2012. The Company plans to make sales of its common stock in private transactions or to borrow funds as
needed to raise sufficient capital to fund the development of business, projected operating expenses and commitments. However,
there can be no assurance that we will be able to obtain sufficient funding to develop our current business plan.

New
Accounting Standards



There
are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not
yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe
any of these accounting pronouncements has had or will have a material impact on the Company’s financial position or operating
results. See Note 1 to the financial statements.



Critical
Accounting Policies



The
SEC issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure about Critical Accounting Policies”
(“FRR 60”), suggesting companies provide additional disclosure and commentary on their most critical accounting policies.
In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s
financial condition and operating results, and require management to make its most difficult and subjective judgments, often as
a result of the need to make estimates of matters that are inherently uncertain. Based on this definition our most critical accounting
policies are discussed below. The methods, estimates and judgments we use in applying these most critical accounting policies
have a significant impact on the results we report in our financial statements.







REVENUE
RECOGNITION –We have derived our revenue from sale of mineral interests and in the future will predominately derive
our revenue from the sale of produced crude oil and natural gas. Revenue is recorded in the month the product is delivered to
the purchaser. We receive payment from one to three months after delivery. At the end of each month, we estimate the amount of
production delivered to purchasers and the price we will receive. Variances between our estimated revenue and actual payment are
recorded in the month the payment is received; however, the differences should be insignificant.



FULL
COST METHOD OF ACCOUNTING – We account for our oil and natural gas operations using the full cost method of accounting.
Under this method, all costs associated with property acquisition, exploration and development of oil and gas reserves are capitalized.
Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties
and cost of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs.
All of our properties are currently located within the continental United States.



OIL
AND NATURAL GAS RESERVE QUANTITIES – Reserve quantities and the related estimates of future net cash flows affect our periodic
calculations of depletion and impairment of our oil and natural gas properties. Proved oil and natural gas reserves are the estimated
quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. Reserve
quantities and future cash flows included in this Annual Report are prepared in accordance with guidelines established by the
SEC and FASB. The accuracy of our reserve estimates is a function of:





|1 |  | The quality and quantity of available data;
|- |  | -------------------------------------------

|2 |  | The accuracy of various mandated economic assumptions; and
|- |  | ----------------------------------------------------------

|3 |  | The judgments of the person preparing the estimates.
|- |  | ----------------------------------------------------





Because
these estimates depend on many assumptions, all of which may differ substantially from actual results, reserve estimates may be
different from the quantities of oil and natural gas that are ultimately recovered. We will make changes to depletion rates and
impairment calculations in the same period that changes in reserve estimates are made.



All
capitalized costs of oil and gas properties, including estimated future costs to develop proved reserves and estimated future
costs of site restoration, are amortized on the unit-of-production method using our estimate of proved reserves. Investments in
unproved properties and major development projects are not amortized until proved reserves associated with the projects can be
determined.



IMPAIRMENT
OF OIL AND NATURAL GAS PROPERTIES – We review the value of our oil and natural gas properties whenever management judges
that events and circumstances indicate that the recorded carrying value of properties may not be recoverable. We provide for impairments
on undeveloped property when we determine that the property will not be developed or a permanent impairment in value has occurred.
Under the full cost method the net book value of oil and natural gas properties, less related deferred income taxes, may not exceed
the estimated after-tax future net revenues from proved oil and natural gas properties, discounted at 10% (the “Ceiling
Limitation”). In arriving at estimated future net revenues, estimated lease operating expenses, development costs, and certain
production-related taxes are deducted. In calculating future net revenues, prices and costs in effect at the time of the calculation
are held constant indefinitely, except for changes that are fixed and determinable by existing contracts. The net book value is
compared to the ceiling limitation on a quarterly and yearly basis. The excess, if any, of the net book value above the ceiling
limitation is charged to expense in the period in which it occurs and is not subsequently reinstated.











Off-Balance
Sheet Arrangements



We
do not have any material off-balance sheet arrangements.



TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS



Not
applicable.



ITEM
7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Not
applicable.



Item
8:	Financial Statements AND SUPPLEMENTARY DATA

The
Financial Statements of Royal Energy Resources, Inc. (a development stage company) together with the report thereon of Paritz
& Company, P.A. for the years ended August 31, 2012 and 2011 and the period from inception (July 22, 2005) through August
31, 2012, is set forth as follows:



Index
to Financial Statements

|                                                             | Page
|------------------------------------------------------------ | ----
|                                                             |     
|Report
    of Independent Registered Public Accounting Firm:
|Paritz & Company, P.A.                                       | 15  
|Balance
    Sheets                                           | 16  
|Statements
    of Operations                                 | 17  
|Statements
    of Stockholders' Deficit                      | 18  
|Statements
    of Cash Flows                                 | 22  
|Notes
    to Financial Statements                            | 24  















REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board
of Directors

Royal
Energy Resources, Inc.

(formerly
World Marketing, Inc.)

(a
development stage company)



We
have audited the accompanying balance sheet of Royal Energy Resources, Inc (formerly World Marketing, Inc.) (a development stage
company) as of August 31, 2012 and 2011 and the related statements of operations and cash flows for the years ended August 31,
2012 and 2011 and the period from inception (July 22, 2005) through August 31, 2012 and the statement of stockholders’ equity
for the period from inception (July 22, 2005) through August 31, 2012. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.



We
conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Royal
Energy Resources, Inc.., (formerly World Marketing, Inc.) (a development stage company) as of August 31, 2012 and 2011, and the
results of its operations and its cash flows for the years ended August 31, 2012 and 2011 and the period from inception (July
22, 2005) through August 31, 2012 in conformity with accounting principles generally accepted in the United States of America.



The
financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company is in the development stage, and has no established source of revenue and is
dependent on its ability to raise capital from shareholders or other sources to sustain operations. These factors along with other
matters as set forth in Note 1, raise substantial doubt that the Company will be able to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.







|                                       
|---------------------------------------
|By: /s/
Paritz & Company, P.A.         
|Hackensack,
New JerseyDecember 13, 2012









|ROYAL ENERGY RESOURCES, INC.                                  |  |      |            |     
|------------------------------------------------------------- |  | ---- | ---------- | ----
|(A Development Stage Company)                                 |  |      |            |     
|Balance Sheets                                                |  |      |            |     
|August 31, 2012 and 2011                                      |  |      |            |     
|                                                              |  | 2012 |            | 2011
|Assets                                                        |  |      |            |     
|Current assets                                                |  |      |            |     
|Cash                                                          |  | $    | 18,386     |     
|Accounts receivable                                           |  |      | —          |     
|Total current assets                                          |  |      | 18,386     |     
|Properties                                                    |  |      |            |     
|Mining properties                                             |  |      | 12,949     |     
|Unproved properties not being amortized (full cost method)    |  |      | —          |     
|                                                              |  |      | 12,949     |     
|Accumulated depreciation, depletion and amortization          |  |      | —          |     
|Total properties                                              |  |      | 12,949     |     
|Total assets                                                  |  | $    | 31,335     |     
|                                                              |  |      |            |     
|Liabilities and Stockholders' Equity                          |  |      |            |     
|Current liabilities                                           |  |      |            |     
|Accounts payable                                              |  | $    | 73,590     |     
|Accrued expenses                                              |  |      | 8,497      |     
|Notes payable                                                 |  |      | 49,400     |     
|Convertible note and debenture payable                        |  |      | 65,600     |     
|Due to shareholder                                            |  |      | 8,132      |     
|Total current liabilities                                     |  |      | 205,219    |     
|                                                              |  |      |            |     
|Commitments and contingencies                                 |  |      |            |     
|                                                              |  |      |            |     
|Stockholders' equity                                          |  |      |            |     
|Preferred stock: $0.00001 par value; authorized               |  |      |            |     
|10,000,000 shares; issued and outstanding - 100,000 shares at |  |      |            |     
|August 31, 2012 and August 31, 2011                           |  |      | 1          |     
|Common stock: $0.00001 par value; authorized                  |  |      |            |     
|500,000,000 shares; 179,527 and 171,527 shares issued         |  |      |            |     
|and outstanding at August 31, 2012 and 2011, respectively     |  |      | 2          |     
|Additional paid-in capital                                    |  |      | 3,510,452  |     
|Deferred option and stock compensation                        |  |      | (1,964     | )   
|Common stock subscription receivable                          |  |      | (379,856   | )   
|Deficit accumulated during the development stage              |  |      | (3,302,519 | )   
|Total stockholders' equity                                    |  |      | (173,884   | )   
|Total liabilities and stockholders' equity                    |  | $    | 31,335     |     
|                                                              |  |      |            |     
|See accompanying notes to financial statements.               |  |      |            |     







|ROYAL ENERGY RESOURCES, INC.                           |  |                        |          |            |  |                
|------------------------------------------------------ |  | ---------------------- | -------- | ---------- |  | ---------------
|(A Development Stage Company)                          |  |                        |          |            |  |                
|Statements of Operations                               |  |                        |          |            |  |                
|Years Ended August 31, 2012 and 2011 and               |  |                        |          |            |  |                
|from inception (July 22, 2005) through August 31, 2012 |  |                        |          |           
|                                                       |  |                        |          |            |  |                
|                                                       |  |                        |          |            |  | Inception      
|                                                       |  |                        |          |            |  | (July 22, 2005)
|                                                       |  |                        |          |            |  | Through        
|                                                       |  | Years Ended August 31, |          | August 31,
|                                                       |  | 2012                   |          | 2011       |  | 2012           
|                                                       |  |                        |          |            |  |                
|Oil and gas sales                                      |  | $                      | 17,000   |            |  | $              
|Costs and expenses:                                    |  |                        |          |            |  |                
|Cost of leases sold                                    |  |                        | 13,260   |            |  |                
|Lease operating expense                                |  |                        | —        |            |  |                
|Production taxes                                       |  |                        | —        |            |  |                
|Depreciation, depletion and amortization               |  |                        | —        |            |  |                
|Asset impairment                                       |  |                        | —        |            |  |                
|Non-cash compensation                                  |  |                        | 55,986   |            |  |                
|Other selling, general and administrative expense      |  |                        | 71,761   |            |  |                
|Total costs and expenses                               |  |                        | 141,007  |            |  |                
|Loss from operations                                   |  |                        | (124,007 | )          |  |                
|Other expenses (income):                               |  |                        |          |            |  |                
|Loss on disposition by rescission agreement            |  |                        |          |            |  |                
|on condominium                                         |  |                        | —        |            |  |                
|Commodities trading losses                             |  |                        | —        |            |  |                
|Interest expense                                       |  |                        | 8,497    |            |  |                
|Interest income from related party                     |  |                        | (6,252   | )          |  |                
|Interest income                                        |  |                        | —        |            |  |                
|                                                       |  |                        | 2,245    |            |  |                
|Net loss                                               |  | $                      | (126,252 | )          |  | $              
|                                                       |  |                        |          |            |  |                
|                                                       |  |                        |          |            |  |                
|Net loss per share, basic and diluted                  |  | $                      | (0.73    | )          |  | $              
|                                                       |  |                        |          |            |  |                
|Weighted average shares outstanding,                   |  |                        |          |            |  |                
|basic and diluted                                      |  |                        | 172,517  |            |  |                
|                                                       |  |                        |          |            |  |                
|See accompanying notes to financial statements.        |  |                        |          |            |  |                









|ROYAL ENERGY RESOURCES, INC.                                           |                 |                 |         |                
|---------------------------------------------------------------------- | --------------- | --------------- | ------- | ---------------
|(A Development Stage Company)                                          |                 |                 |         |                
|Statements of Stockholders' Equity                                     |                 |                 |         |                
|Inception of Development Stage, July 22, 2005, through August 31, 2012 |                
|                                                                       |                 |                 |         |                
|                                                                       | Preferred stock | Common stock    | Paid-in
|                                                                       | Shares          | Amount          | Shares  | Amount         
|                                                                       |                 |                 |         |                
|Inception, July 22, 2005                                               | -               | -               | 11,861  | 1              
|Sale of common stock for cash                                          | -               | -               | 640     | -              
|Common stock issued for                                                |                 |                 |         |                
|real estate investment                                                 | -               | -               | 3,800   | -              
|Contribution to capital                                                | -               | -               | -       | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance August 31, 2005                                                | -               | -               | 16,301  | 1              
|Sale of common stock for cash                                          | -               | -               | 2,173   | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance, August 31, 2006                                               | -               | -               | 18,474  | 1              
|Sale of common stock                                                   | -               | -               | 9,340   | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance, August 31, 2007                                               | -               | -               | 27,814  | 1              
|Sale of preferred stock                                                | 100,000         | 1               | -       | -              
|Sale of common stock                                                   | -               | -               | 4,591   | -              
|Common stock issued for                                                |                 |                 |         |                
|consulting contracts                                                   | -               | -               | 5,930   | -              
|Cash portion of consulting                                             |                 |                 |         |                
|contracts                                                              | -               | -               | -       | -              
|Rescission of real estate                                              |                 |                 |         |                
|purchase                                                               | -               | -               | (3,800) | -              
|Amortization of prepaid                                                |                 |                 |         |                
|consulting contracts:                                                  |                 |                 |         |                
|Non-cash portion                                                       | -               | -               | -       | -              
|Cash portion                                                           | -               | -               | -       | -              
|Stock subscription receivable:                                         |                 |                 |         |                
|Payments received                                                      | -               | -               | -       | -              
|Interest accrued                                                       | -               | -               | -       | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance, August 31, 2008                                               | 100,000         | 1               | 34,535  | 1              
|Sale of common stock for cash                                          | -               | -               | 40      | -              
|Common stock issued for                                                |                 |                 |         |                
|consulting contracts                                                   | -               | -               | 7,102   | -              
|Cash portion of consulting contracts                                   | -               | -               | -       | -              
|Amortization of prepaid                                                |                 |                 |         |                
|consulting contracts:                                                  |                 |                 |         |                
|Non-cash portion                                                       | -               | -               | -       | -              
|Cash portion                                                           | -               | -               | -       | -              
|Stock subscription receivable:                                         |                 |                 |         |                
|Sold                                                                   | -               | -               | 3,100   | -              
|Payments received                                                      | -               | -               | -       | -              
|Interest accrued                                                       | -               | -               | -       | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance, August 31, 2009                                               | 100,000         | $             1 | 44,777  | $             1
|                                                                       |                 |                 |         |                
|See accompanying notes to financial statements.                        |                 |                 |        















|ROYAL ENERGY RESOURCES, INC.                                           |  |   |              |   |  |   |           |   |  |  
|---------------------------------------------------------------------- |  | - | ------------ | - |  | - | --------- | - |  | -
|(A Development Stage Company)                                          |  |   |              |   |  |   |           |   |  |  
|Statements of Stockholders' Equity, continued                          |  |   |              |   |  |   |           |  
|Inception of Development Stage, July 22, 2005, through August 31, 2012 |  |   |              |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   | Subscription |   |  |   | Deferred  |   |  |  
|                                                                       |  |   | Receivable   |   |  |   | Expenses  |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|                                                                       |  |   |              |   |  |   |           |   |  |  
|Inception, July 22, 2005                                               |  |   | —            |   |  |   | —         |   |  |  
|Sale of common stock for cash                                          |  |   | —            |   |  |   | —         |   |  |  
|Common stock issued for                                                |  |   |              |   |  |   |           |   |  |  
|real estate investment                                                 |  |   | —            |   |  |   | —         |   |  |  
|Contribution to capital                                                |  |   | —            |   |  |   | —         |   |  |  
|Net loss                                                               |  |   | —            |   |  |   | —         |   |  |  
|Balance August 31, 2005                                                |  |   | —            |   |  |   | —         |   |  |  
|Sale of common stock for cash                                          |  |   | —            |   |  |   | —         |   |  |  
|Net loss                                                               |  |   | —            |   |  |   | —         |   |  |  
|Balance, August 31, 2006                                               |  |   | —            |   |  |   | —         |   |  |  
|Sale of common stock                                                   |  |   | (81,590      | ) |  |   | —         |   |  |  
|Net loss                                                               |  |   | —            |   |  |   | —         |   |  |  
|Balance, August 31, 2007                                               |  |   | (81,590      | ) |  |   | —         |   |  |  
|Sale of preferred stock                                                |  |   | —            |   |  |   | —         |   |  |  
|Sale of common stock                                                   |  |   | —            |   |  |   | —         |   |  |  
|Common stock issued for                                                |  |   |              |   |  |   |           |   |  |  
|consulting contracts                                                   |  |   | —            |   |  |   | (977,775  | ) |  |  
|Cash portion of consulting                                             |  |   |              |   |  |   |           |   |  |  
|contracts                                                              |  |   | —            |   |  |   | (85,000   | ) |  |  
|Rescission of real estate                                              |  |   |              |   |  |   |           |   |  |  
|purchase                                                               |  |   | —            |   |  |   | —         |   |  |  
|Amortization of prepaid                                                |  |   |              |   |  |   |           |   |  |  
|consulting contracts:                                                  |  |   |              |   |  |   |           |   |  |  
|Non-cash portion                                                       |  |   | —            |   |  |   | 338,547   |   |  |  
|Cash portion                                                           |  |   | —            |   |  |   | 43,529    |   |  |  
|Stock subscription receivable:                                         |  |   |              |   |  |   |           |   |  |  
|Payments received                                                      |  |   | 13,400       |   |  |   | —         |   |  |  
|Interest accrued                                                       |  |   | (3,902       | ) |  |   | —         |   |  |  
|Net loss                                                               |  |   | —            |   |  |   | —         |   |  |  
|Balance, August 31, 2008                                               |  |   | (72,092      | ) |  |   | (680,699  | ) |  |  
|Sale of common stock for cash                                          |  |   | —            |   |  |   | —         |   |  |  
|Common stock issued for                                                |  |   |              |   |  |   |           |   |  |  
|consulting contracts                                                   |  |   | —            |   |  |   | (887,440  | ) |  |  
|Cash portion of consulting contracts                                   |  |   | —            |   |  |   | (40,901   | ) |  |  
|Amortization of prepaid                                                |  |   |              |   |  |   |           |   |  |  
|consulting contracts:                                                  |  |   |              |   |  |   |           |   |  |  
|Non-cash portion                                                       |  |   | —            |   |  |   | 1,252,861 |   |  |  
|Cash portion                                                           |  |   | —            |   |  |   | 82,371    |   |  |  
|Stock subscription receivable:                                         |  |   |              |   |  |   |           |   |  |  
|Sold                                                                   |  |   | (77,500      | ) |  |   | —         |   |  |  
|Payments received                                                      |  |   | 1,168        |   |  |   |           |   |  |  
|Interest accrued                                                       |  |   | (3,545       | ) |  |   |           |   |  |  
|Net loss                                                               |  |   | —            |   |  |   | —         |   |  |  
|Balance, August 31, 2009                                               |  | $ | (151,969     | ) |  | $ | (273,808  | ) |  | $
|                                                                       |  |   |              |   |  |   |           |   |  |  
|See accompanying notes to financial statements.                        |  |  



















|Statements of Stockholders' Equity                                     |                 |                 |         |                
|---------------------------------------------------------------------- | --------------- | --------------- | ------- | ---------------
|(A Development Stage Company)                                          |                 |                 |         |                
|Statements of Stockholders' Equity                                     |                 |                 |         |                
|Inception of Development Stage, July 22, 2005, through August 31, 2012 |                
|                                                                       |                 |                 |         |                
|                                                                       | Preferred stock | Common stock    | Paid-in
|                                                                       | Shares          | Amount          | Shares  | Amount         
|                                                                       |                 |                 |         |                
|Balance August 31, 2009                                                | 100,000         | $             1 | 44,777  | $             1
|Common stock issued for:                                               |                 |                 |         |                
|Consulting contracts                                                   | -               | -               | 5,050   | -              
|Drilling program participation                                         | -               | -               | 200     | -              
|Loan extension                                                         | -               | -               | 1,400   | -              
|Amortization of prepaid                                                |                 |                 |         |                
|Consulting contracts                                                   | -               | -               | -       | -              
|Beneficial conversion feature                                          |                 |                 |         |                
|of convertible debt                                                    | -               | -               | -       | -              
|Stock subscription receivable:                                         |                 |                 |         |                
|Sold                                                                   | -               | -               | 28,000  | -              
|Payments received                                                      | -               | -               | -       | -              
|Interest accrued                                                       | -               | -               | -       | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance August 31, 2010                                                | 100,000         | 1               | 79,427  | 1              
|Amortization of deferred                                               |                 |                 |         |                
|expenses                                                               | -               | -               | -       | -              
|Common stock issued for:                                               |                 |                 |         |                
|Consulting contracts                                                   | -               | -               | 4,000   | -              
|Loan and extension fee                                                 | -               | -               | 10,800  | -              
|Beneficial conversion feature                                          |                 |                 |         |                
|of convertible debt                                                    | -               | -               | -       | -              
|Stock subscription receivable:                                         |                 |                 |         |                
|Sold                                                                   | -               | -               | 86,000  | 1              
|Cancelled                                                              | -               | -               | (8,500) | -              
|Payments received                                                      | -               | -               | -       | -              
|Interest accrued                                                       | -               | -               | -       | -              
|Common stock cancelled for                                             |                 |                 |         |                
|rescinded drilling program                                             | -               | -               | (200)   | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance August, 31, 2011                                               | 100,000         | 1               | 171,527 | 2              
|Stock subscription receivable:                                         |                 |                 |         |                
|Payments received                                                      | -               | -               | -       | -              
|Interest accrued                                                       | -               | -               | -       | -              
|Common stock issued for:                                               |                 |                 |         |                
|Cash                                                                   | -               | -               | 6,000   | -              
|Consulting contract                                                    | -               | -               | 2,000   | -              
|Amortization of deferred expense                                       | -               | -               | -       | -              
|Net loss                                                               | -               | -               | -       | -              
|Balance August, 31, 2012                                               | 100,000         | $             1 | 179,527 | $             2
|                                                                       |                 |                 |         |                
|See accompanying notes to financial statements.                        |                 |                 |        













|ROYAL ENERGY RESOURCES, INC.                                               |  |   |              |   |  |   |          |   |  |  
|-------------------------------------------------------------------------- |  | - | ------------ | - |  | - | -------- | - |  | -
|(A Development Stage Company)                                              |  |   |              |   |  |   |          |   |  |  
|Statements of Stockholders' Equity, continued                              |  |   |              |   |  |   |          |  
|Inception of Development Stage, July 22, 2005,
    through August 31, 2012 |  |   |              |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|                                                                           |  |   | Subscription |   |  |   | Deferred |   |  |  
|                                                                           |  |   | Receivable   |   |  |   | Expenses |   |  |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|Balance, August 31, 2009                                                   |  | $ | (151,969     | ) |  | $ | (273,807 | ) |  | $
|Common stock issued for:                                                   |  |   |              |   |  |   |          |   |  |  
|Consulting contracts                                                       |  |   | —            |   |  |   | (81,500  | ) |  |  
|Drilling program participation                                             |  |   | —            |   |  |   | —        |   |  |  
|Loan extension                                                             |  |   | —            |   |  |   | —        |   |  |  
|Amortization of prepaid                                                    |  |   |              |   |  |   |          |   |  |  
|consulting contracts:                                                      |  |   | —            |   |  |   | 326,498  |   |  |  
|Beneficial conversion feature                                              |  |   |              |   |  |   |          |   |  |  
|of convertible debt                                                        |  |   | —            |   |  |   | —        |   |  |  
|Stock subscription receivable:                                             |  |   |              |   |  |   |          |   |  |  
|Sold                                                                       |  |   | (285,000     | ) |  |   | —        |   |  |  
|Payments received                                                          |  |   | 21,239       |   |  |   |          |   |  |  
|Interest accrued                                                           |  |   | (6,610       | ) |  |   |          |   |  |  
|Net loss                                                                   |  |   | —            |   |  |   | —        |   |  |  
|Balance August 31, 2010                                                    |  |   | (422,340     | ) |  |   | (28,809  | ) |  |  
|Amortization of deferred                                                   |  |   |              |   |  |   |          |   |  |  
|expenses                                                                   |  |   | —            |   |  |   | 152,809  |   |  |  
|Common stock issued for:                                                   |  |   |              |   |  |   |          |   |  |  
|Consulting contracts                                                       |  |   | —            |   |  |   | (20,000  | ) |  |  
|Loan and extension fee                                                     |  |   | —            |   |  |   | (156,000 | ) |  |  
|Beneficial conversion feature                                              |  |   |              |   |  |   |          |   |  |  
|of convertible debt                                                        |  |   | —            |   |  |   | —        |   |  |  
|Stock subscription receivable:                                             |  |   |              |   |  |   |          |   |  |  
|Sold                                                                       |  |   | (172,000     | ) |  |   | —        |   |  |  
|Cancelled                                                                  |  |   | 147,336      |   |  |   | —        |   |  |  
|Payments received                                                          |  |   | 58,477       |   |  |   | —        |   |  |  
|Interest accrued                                                           |  |   | (8,727       | ) |  |   | —        |   |  |  
|Common stock cancelled for                                                 |  |   |              |   |  |   |          |   |  |  
|rescinded drilling program                                                 |  |   | —            |   |  |   | —        |   |  |  
|Net loss                                                                   |  |   | —            |   |  |   | —        |   |  |  
|Balance August, 31, 2011                                                   |  |   | (397,254     | ) |  |   | (52,000  | ) |  |  
|Stock subscription receivable:                                             |  |   |              |   |  |   |          |   |  |  
|Payments received                                                          |  |   | 23,650       |   |  |   | —        |   |  |  
|Interest accrued                                                           |  |   | (6,252       | ) |  |   | —        |   |  |  
|Common stock issued for:                                                   |  |   |              |   |  |   |          |   |  |  
|Cash                                                                       |  |   | —            |   |  |   | —        |   |  |  
|Consulting contract                                                        |  |   | —            |   |  |   | (2,500   | ) |  |  
|Amortization of deferred expense                                           |  |   | —            |   |  |   | 52,536   |   |  |  
|Net loss                                                                   |  |   | —            |   |  |   | —        |   |  |  
|Balance August, 31, 2012                                                   |  | $ | (379,856     | ) |  | $ | (1,964   | ) |  | $
|                                                                           |  |   |              |   |  |   |          |   |  |  
|                                                                           |  |   |              |   |  |   |          |   |  |  
|See accompanying notes to financial statements.                            |  |  













|ROYAL ENERGY RESOURCES, INC.                                        |  |                        |          |            |  |               
|------------------------------------------------------------------- |  | ---------------------- | -------- | ---------- |  | --------------
|(A Development Stage Company)                                       |  |                        |          |            |  |               
|Statements of Cash Flows                                            |  |                        |          |            |  |               
|Years Ended August 31, 2012 and 2011, and                           |  |                        |          |            |  |               
|the period from inception (July 22, 2005) through August 31, 2012   |  |                        |          |           
|                                                                    |  |                        |          |            |  |               
|                                                                    |  |                        |          |            |  | From inception
|                                                                    |  |                        |          |            |  | July 22, 2005 
|                                                                    |  |                        |          |            |  | through       
|                                                                    |  | Years Ended August 31, |          | August 31,
|                                                                    |  | 2012                   |          | 2011       |  | 2012          
|                                                                    |  |                        |          |            |  |               
|Cash flows from operating activities                                |  |                        |          |            |  |               
|Net loss                                                            |  | $                      | (126,252 | )          |  | $             
|Adjustment to reconcile net loss to net cash used                   |  |                        |          |            |  |               
|in operating activities:                                            |  |                        |          |            |  |               
|Depreciation, depletion and amortization                            |  |                        | —        |            |  |               
|Value of common shares issued for services                          |  |                        | 55,986   |            |  |               
|Loss on rescission of condominium purchase                          |  |                        | —        |            |  |               
|Interest accrued on stock subscription                              |  |                        | (6,252   | )          |  |               
|Asset impairment                                                    |  |                        | —        |            |  |               
|Loan extension paid with common stock                               |  |                        | —        |            |  |               
|Beneficial conversion feature of convertible                        |  |                        |          |            |  |               
|note payable                                                        |  |                        | —        |            |  |               
|Bad debt expense                                                    |  |                        | —        |            |  |               
|Change in other assets and liablities:                              |  |                        |          |            |  |               
|Accounts receivable                                                 |  |                        | 8,000    |            |  |               
|Prepaid expenses and other assets                                   |  |                        | —        |            |  |               
|Accounts payable                                                    |  |                        | 48,248   |            |  |               
|Accrued expenses                                                    |  |                        | 8,497    |            |  |               
|Net cash used in operations                                         |  |                        | (11,773  | )          |  |               
|                                                                    |  |                        |          |            |  |               
|Cash flows from investing activities                                |  |                        |          |            |  |               
|Investment in real estate                                           |  |                        | —        |            |  |               
|Oil and gas property expenditures                                   |  |                        | (8,538   | )          |  |               
|Proceeds from sales of undeveloped leasehold                        |  |                        | 17,000   |            |  |               
|Proceeds from sale of oil and gas properties                        |  |                        | —        |            |  |               
|Investment in uranium and rare earth and precious metals properties |  |                        | (3,220   | )          |  |               
|Net cash provided by (used in) investing activities                 |  |                        | 5,242    |            |  |               
|                                                                    |  |                        |          |            |  |               
|Cash flows from financing activities                                |  |                        |          |            |  |               
|Proceeds of stockholder loans                                       |  |                        | 8,132    |            |  |               
|Proceeds from subscription receivable                               |  |                        | 23,650   |            |  |               
|Loan proceeds                                                       |  |                        | —        |            |  |               
|Loan repayment                                                      |  |                        | (14,400  | )          |  |               
|Proceeds from sale of common stock                                  |  |                        | 7,500    |            |  |               
|Proceeds from sale of preferred stock                               |  |                        | —        |            |  |               
|Net cash provided by (used in) financing activities                 |  |                        | 24,882   |            |  |               
|                                                                    |  |                        |          |            |  |               
|Net increase (decrease) in cash                                     |  |                        | 18,351   |            |  |               
|Cash, beginning of period                                           |  |                        | 35       |            |  |               
|Cash, end of period                                                 |  | $                      | 18,386   |            |  | $             
|                                                                    |  |                        |          |            |  |               
|                                                                    |  |                        |          |            |  |               
|                                                                    |  |                        |          |            |  |               
|See accompanying notes to financial statements.                     |  |                        |          |            |  |               







|ROYAL ENERGY RESOURCES, INC.                                          |  |                        |   |            |  |               
|--------------------------------------------------------------------- |  | ---------------------- | - | ---------- |  | --------------
|(A Development Stage Company)                                         |  |                        |   |            |  |               
|Statements of Cash Flows, Continued                                   |  |                        |   |            |  |               
|Years Ended August 31, 2012 and 2011, and                             |  |                        |   |            |  |               
|the period from inception (July 22, 2005) through
    August 31, 2012 |  |                        |   |           
|                                                                      |  |                        |   |            |  |               
|                                                                      |  |                        |   |            |  | From inception
|                                                                      |  |                        |   |            |  | July 22, 2005 
|                                                                      |  |                        |   |            |  | through       
|                                                                      |  | Years Ended August 31, |   | August 31,
|                                                                      |  | 2012                   |   | 2011       |  | 2012          
|                                                                      |  |                        |   |            |  |               
|                                                                      |  |                        |   |            |  |               
|Supplemental cash flow information                                    |  |                        |   |            |  |               
|Cash paid for interest                                                |  | $                      | — |            |  | $             
|Cash paid for income taxes                                            |  |                        | — |            |  |               
|                                                                      |  |                        |   |            |  |               
|Non-cash investing and financing activities:                          |  |                        |   |            |  |               
|Issuance of common stock for real estate                              |  | $                      | — |            |  | $             
|Contribution of stockholder loan to capital                           |  |                        | — |            |  |               
|Disposition of real estate per stock rescission                       |  |                        |   |            |  |               
|agreement                                                             |  |                        | — |            |  |               
|Common stock issued for participation in drilling                     |  |                        |   |            |  |               
|program                                                               |  |                        | — |            |  |               
|Common stock issued for stock subscription                            |  |                        |   |            |  |               
|receivables                                                           |  |                        | — |            |  |               
|Stock subscription receivables cancelled and common                   |  |                        |   |            |  |               
|stock retired                                                         |  |                        | — |            |  |               
|                                                                      |  |                        |   |            |  |               
|                                                                      |  |                        |   |            |  |               
|                                                                      |  |                        |   |            |  |               
|See accompanying notes to financial statements.                       |  |                        |   |            |  |               





ROYAL
ENERGY RESOURCES, INC.

(A
Development Stage Company)



NOTES
TO FINANCIAL STATEMENTS



AUGUST
31, 2012



|
|



| | 1 | ORGANIZATION
                                                                AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | - | ---------------------------------------------------------------------------------------------------------------------------



Basis
of presentation



These
financial statements include the accounts of Royal Energy Resources, Inc. (“RER”) (formerly known as World Marketing,
Inc. ("WMI"). RER is a development stage enterprise within the meaning of Financial Accounting Standards Board Topic
915.

RER
was organized in 1999 and attempted to start a web-based marketing business for health-care products. The health-care products
business had no revenue and was discontinued in 2001 and the Company remained inactive until July 22, 2005 when it commenced its
real estate business. Accordingly, the current development stage has a commencement date of July 22, 2005 and all prior losses
of $28,995 have been transferred to accumulated deficit.

In
preparing the accompanying financial statements, the Company has reviewed, as determined necessary by the Company's management,
events that have occurred after August 31, 2012, up until the issuance of the financial statements, which occurred on December
13, 2012.

On
August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of
our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our
issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares
of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October
1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when
the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the
change took place before the date of the earliest transaction reported.





Organization
and nature of business



RER
is a Delaware corporation which was incorporated on March 22, 1999, under the name Webmarketing, Inc. ("Webmarketing").
On July 7, 2004, the Company revived its charter and changed its name from Webmarketing to World Marketing, Inc. In December 2007
the Company changed its name to Royal Energy Resources, Inc.



In
2011, the Company began pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada
and mining leases in the United States.

At
the end of August 2006, the Company began acquiring oil and gas and uranium leases and has since resold some of its leases and
retained an overriding royalty interest. During 2008 the Company prepaid the estimated drilling and completion costs for interests
in three oil & gas drilling prospects in Washington County, Oklahoma. Two of the wells were completed in September and October
2008 and the third well was abandoned after testing in 2010. During 2009, the Company advanced another $42,000, net, to apply
toward workover of three additional wells. All workover attempts were abandoned in 2010. Effective October 1, 2010, the Company
sold its interest in its remaining proved reserves.



On
July 22, 2005, the Company began selling its common stock to obtain the funds necessary to begin implementation of its new business
plan. The primary objective of the new business plan was to acquire, make necessary renovations and resell both residential and
commercial real estate. The Company expected to acquire real estate using cash, mortgage financing or its common stock, or any
combination thereof, and anticipated that the majority of the properties acquired would be in the New York City area. The real
estate would be sold directly by the Company to the extent deemed practical. If necessary, broker services will be used to expedite
a given sale. The Company rescinded the purchase of the real estate property it had during the quarter ended May 31, 2008 and
currently is limiting any potential real estate acquisitions to Eastern European countries, due to the current real estate environment
in the United States.



Webmarketing
attempted to establish a web-based marketing business for health care products from its inception in 1999 until 2001. However,
the Company did not establish any revenues and discontinued these operations in 2001.









Going
Concern

The
Company has not established sources of revenues sufficient to fund the development of business, projected operating expenses and
commitments for fiscal year 2012. The Company, has accumulated a net loss of $3,302,519 through August 31, 2012, ($28,995 in an
earlier development stage business and $3,273,524 in the current development stage) and incurred losses of $126,252 for the year
then ended.



RER
was organized in 1999 and attempted to start a web-based marketing business for health-care products. The health-care products
business had no revenue and was discontinued in 2001 and the Company remained inactive until July 22, 2005 when it commenced its
real estate business. Accordingly, the current development stage has a commencement date of July 22, 2005 and all prior losses
of $28,995 have been transferred to accumulated deficit.

In
March 2006, the Company sold 1,300 shares of its common stock for $65,000 to provide a portion of the cash required to purchase
its first real estate investment. Subsequently, the Company continued to sell its common stock to raise capital to continue operations.
In the previous fiscal year, the Company revised its business plan, rescinded its real estate purchase and began investing in
energy leases and oil and gas drilling prospects. However, the energy business has a high degree of risk and there can be no assurance
that the Company will be able to obtain sufficient funding to develop the Company's current business plan.



Cash
and cash equivalents



The
Company considers all cash on hand, cash in banks and all highly liquid debt instruments purchased with a maturity of three months
or less to be cash and cash equivalents.



Revenue
recognition



Revenue
from the sale of oil and gas leases is recognized in accordance with the full cost method of accounting.



Oil
and gas production income will be recognized when the product is delivered to the purchaser. We will receive payment from one
to three months after delivery. At the end of each month, we will estimate the amount of production delivered to purchasers and
the price we will receive. Variances between our estimated revenue and actual payment are recorded in the month the payment is
received; however, differences should be insignificant.



Revenue
from real estate sales is recognized when the related property is subject to a binding contract and all significant obligations
have been satisfied.



Stock
option plans



The
compensation cost relating to share-based payment transactions (including the cost of all employee stock options) is required
to be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability
instruments issued. The accounting literature covers a wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.



The
Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting
restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Company's options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate,
in management's opinion, the existing models may not necessarily provide a reliable single measure of the fair value of its options.
However, the Black-Scholes option valuation model provides the best available estimate for this purpose.



There
are no options outstanding at August 31, 2012.



Property
and equipment



The
Company follows the full cost method of accounting for oil and natural gas operations. Under this method all productive and nonproductive
costs incurred in connection with the acquisition, exploration and development of oil and natural gas reserves are capitalized.
No gains or losses are recognized upon the sale or other disposition of oil and natural gas properties except in transactions
that would significantly alter the relationship between capitalized costs and proved reserves. The costs of unevaluated oil and
natural gas properties are excluded from the amortizable base until the time that either proven reserves are found or it has determined
that such properties are impaired. The Company had $8,462 in capitalized costs relating to unevaluated properties and leases at
August 31, 2011 and none at August 31, 2012. As properties are evaluated, the related costs would be transferred to proven oil
and natural gas properties using full cost accounting. There are no capitalized costs for proved properties as of August 31, 2012
and 2011.









Under
the full cost method the net book value of oil and natural gas properties, less related deferred income taxes, may not exceed
the estimated after-tax future net revenues from proved oil and natural gas properties, discounted at 10% (the “Ceiling
Limitation”). In arriving at estimated future net revenues, estimated lease operating expenses, development costs, and certain
production-related taxes are deducted. In calculating future net revenues, prices and costs in effect at the time of the calculation
are held constant indefinitely, except for changes that are fixed and determinable by existing contracts. The net book value is
compared to the ceiling limitation on a quarterly and yearly basis. The excess, if any, of the net book value above the ceiling
limitation is charged to expense in the period in which it occurs and is not subsequently reinstated.

The
Company assesses the recoverability of the carrying value of its non-oil and gas long-lived assets when events occur that indicate
an impairment in value may exist. An impairment loss is indicated if the sum of the expected undiscounted future net cash flows
is less than the carrying amount of the assets. If this occurs, an impairment loss is recognized for the amount by which the carrying
amount of the assets exceeds the estimated fair value of the asset. No impairments of other assets were recorded in 2012 or 2011.

Depreciation
and amortization



All
capitalized costs of oil and natural gas properties and equipment, including the estimated future costs to develop proved reserves,
are amortized using the unit-of-production method based on total proved reserves. Depreciation of other equipment is computed
on the straight line method over the estimated useful lives of the assets, which range from three to twenty-five years.



Natural
gas sales and gas imbalances

The
Company follows the entitlement method of accounting for natural gas sales, recognizing as revenues only its net interest share
of all production sold. Any amount attributable to the sale of production in excess of or less than the Company’s net interest
is recorded as a gas balancing asset or liability. At August 31, 2012 and 2011, there were no natural gas imbalances

Investments
in real estate



Costs
associated with the acquisition, development and construction of real estate properties are capitalized when incurred. The carrying
value of the properties will be reviewed, at least annually, for impairment. In the event the property is leased, depreciation
will be recorded based upon a thirty-year life. The Company rescinded the purchase of the real estate property it had during the
quarter ended May 31, 2008.

Oil
and natural gas reserve estimates



Proved
reserves, estimated future net revenues and the present value of our reserves are estimated based upon a combination of historical
data and estimates of future activity. The reserve estimates are used in calculating depletion, depreciation and amortization
and in the assessment of the Company’s Ceiling Limitation. Significant assumptions are required in the valuation of proved
oil and natural gas reserves which may affect the amount at which oil and natural gas properties are recorded. Actual results
could differ materially from these estimates. The Company had no proved reserves at August 31, 2012 and 2011.

Income
taxes



Provisions
for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided
on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax
carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates
applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in
tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Earnings
(loss) per common share



The
Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding,
and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential
dilutive shares outstanding. At August 31, 2012 and 2011, there were no potentially dilutive common stock equivalents. Accordingly,
basic and diluted earnings (loss) per share are the same for each of the periods presented.

Use
of estimates in the preparation of financial statements



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 assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Credit
risk



In
2012 and 2011, the Company had cash deposits in certain banks that at times may have exceeded the maximum insured by the Federal
Deposit Insurance Corporation. The Company monitors the financial condition of the banks and has experienced no losses on these
accounts.









Contingencies

Certain
conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will
only be resolved when one or more future events occur or fail to occur. Company management and its legal counsel assess such contingencies
related to legal proceeding that are pending against the Company or unasserted claims that may result in such proceedings, the
Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is
probably that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency
is not probable but is reasonably possible, or if probable but cannot be estimated, then the nature of the contingent liability,
together with an estimate of the range of possible loss if determinable would be disclosed.



Asset
retirement obligations



The
fair value of a liability for an asset retirement obligation is required to be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made, and that the associated retirement costs be capitalized as part of the carrying
amount of the long-lived asset. The Company determines its asset retirement obligation by calculating the present value of the
estimated cash flows related to the liability. Periodic accretion of the discount of the estimated liability would be recorded
in the statement of operations. At August 31, 2012 and 2011, the Company had no proved producing properties and no asset retirement
obligation.



Fair
value determination



Financial
instruments consist of cash, marketable securities, promissory notes receivable, accounts payable, accrued expenses and short-term
borrowings. The carrying amount of these financial instruments approximates fair value due to their short-term nature or the current
rates at which the Company could borrow funds with similar remaining maturities.



Recent
accounting pronouncements



There
are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not
yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of October 31, 2012,
none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows
of the Company.



Fiscal
years



The
year ended August 31, 2012 is referred to herein as 2012, the year ended August 31, 2011 is referred to herein as 2011 and the
year ended August 31, 2010 is referred to herein as 2010.







| | 2 | INVESTMENT
                                                                IN ENERGY PROPERTIES
| | - | -----------------------------------------------------------------------------------------------



Property
costs are summarized as follows at August 31, 2012 and 2011.



|                                                     |  |   | 2012   |  |  |   | 2011   | 
|---------------------------------------------------- |  | - | ------ |  |  | - | ------ | 
|                                                     |  |   |        |  |  |   |        | 
|Gold, silver, copper and rare earth metals mining    |  | $ | 8,620  |  |  | $ | 5,400  | 
|Uranium rights                                       |  |   | 4,329  |  |  |   | 4,329  | 
|Mining properties                                    |  |   | 12,949 |  |  |   | 9,729  | 
|Unproved properties not being amortized              |  |   | —      |  |  |   | 8,462  | 
|Total                                                |  |   | 12,949 |  |  |   | 18,191 | 
|Accumulated depreciation, depletion and amortization |  |   | —      |  |  |   | —      | 
|                                                     |  | $ | 12,949 |  |  | $ | 18,191 | 



MINING



The
Company is currently pursuing gold, silver, copper and rare earth metals mining concessions in Romania, Bulgaria and Canada and
mining leases in the United States. If successful, the Company plans to concentrate its efforts to develop these properties. At
August 31, 2012 and August 31, 2011, the Company held the lease for 2,100 acres of rare earth and precious metals leases in Crook
County, Wyoming, respectively. There are leases for 1,280 acres pending. The rare earth and precious metals leases are approximately
5-15 miles from Bear Lodge Mountain near Sundance, Wyoming. The U.S. Geological Survey has studied Bear Lodge Mountain extensively
(USGS Prof. paper #1049-D) and has estimated it contains one of the largest deposits of disseminated rare earth elements in North
America.



In
addition, the Company holds the lease for uranium rights on approximately 960 acres in Laramie County, Wyoming as of August 31,
2012 and August 31, 2011, respectively. The uranium rights are located on a trend approximately 25-30 miles from a proposed uranium
mine in Weld County, Colorado which was estimated to have uranium reserves valued at over $500 million.



UNDEVELOPED
LEASEHOLD NOT BEING AMORTIZED



The
Company has been the successful bidder in United States Government auctions to purchase certain oil and gas lease rights. The
oil and gas leases comprised approximately 3,000 acres in Weston, Goshen, Niobrara, Converse, Campbell, Freemont, Laramie, Sublette
and Platt Counties, Wyoming as of August 31, 2011. At August 31, 2012, the Company had sold all of its remaining mineral leases
and retained a 1% overriding royalty interest. As of August 31, 2012, the Company had collected approximately $89,000 from sales
of leases and royalty interests.



The
Company is negotiating with energy companies to develop the potential resources that may be contained in these properties. The
Company has entered into agreements and then sold, by assignment, the rights, title and interest in certain of these leases and
retained an over-riding royalty interest. Revenue from these transactions is recorded in accordance with the requirements for
full cost accounting.









| | 3 | CONVERTIBLE
                                                                NOTE PAYABLE
| | - | ----------------------------------------------------------------------------------------



The
Company has a loan with an individual in the original amount of $140,000, with interest payable monthly at 15% and which was extended
to January 1, 2010 and revised to be convertible into common stock at a conversion price to be reasonably agreed upon by the parties.
On March 10, 2011, the Company issued 7,800 shares of its common stock to the note holder and the due date of the note with a
balance of $80,000 was extended nine months, to December 10, 2011. The Company issued 42,000 shares of the Company's common stock
to a group of individuals who agreed to repay the balance of the $80,000 loan. The sale of the shares is being accounted for as
a stock subscription until the note is repaid. At August 31, 2012 and August 31, 2011, the loan balance was $65,600 and $80,000,
respectively.





| | 4 | NOTES
                                                                PAYABLE
| | - | -----------------------------------------------------------------------------



Effective
September 1, 2011, the Company exchanged accounts payable in the amount of $49,400 for two promissory notes in the same amount.
The notes bear interest at 2% per annum and were due on October 31, 2011. The notes are currently past due.



| | 5 | INCOME
                                                                TAXES
| | - | ----------------------------------------------------------------------------



RER
has not recorded a deferred tax benefit or expense for all prior periods through August 31, 2012, as all net deferred benefits
have a full valuation allowance.



Actual
income tax expense applicable to earnings before discontinued operations and income taxes is reconciled with the “normally
expected” Federal income tax for the year ended August 31, 2012 and 2011 as follows:



|                                            |  |   | 2012    |   |  |   | 2011     |  
|------------------------------------------- |  | - | ------- | - |  | - | -------- | -
|                                            |  |   |         |   |  |   |          |  
|"Normally expected" income tax benefit      |  | $ | 42,900  |   |  | $ | 91,900   |  
|State income taxes less federal tax benefit |  |   | 5,100   |   |  |   | 10,800   |  
|Valuation allowance                         |  |   | (48,000 | ) |  |   | (102,700 | )
|Actual income tax expense                   |  | $ | —       |   |  | $ | —        |  

RER
has available unused net operating loss carryforwards of approximately $3,303,000 which will expire in various periods from 2019
to 2031, some of which may be limited as to the amount available on an annual basis.



The
Company’s income tax provision was computed based on the federal statutory rate and the average state rates, net of the
related federal benefit. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components
of the Company’s deferred tax assets and liabilities are as follows:

|                                |  |   | 2012       |   |  |   | 2011       |  
|------------------------------- |  | - | ---------- | - |  | - | ---------- | -
|                                |  |   |            |   |  |   |            |  
|Net operating loss carryforward |  | $ | 1,074,900  |   |  | $ | 1,206,900  |  
|Valuation allowance             |  |   | (1,074,900 | ) |  |   | (1,206,900 | )
|Total                           |  | $ | —          |   |  | $ | —          |  



| | 6 | STOCKHOLDERS’
                                                                EQUITY
| | - | ------------------------------------------------------------------------------------



Common
stock

In
October 2012, the Company amended its charter to authorize issuance of up to 500,000,000 shares of common stock with a par value
of $.00001. The amendment became effective on December 12, 2007, upon filing with the Delaware secretary of state. At August 31,
2012 and 2011, 179,527 and 171,527 shares were issued and outstanding, respectively.



Reverse
stock split and increase in authorized shares

On
August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of
our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our
issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares
of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October
1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when
the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the
change took place before the date of the earliest transaction reported.







Series
A preferred stock

In
November 2007, the Company amended its charter to authorize issuance of up to 10,000,000 shares of its $0.00001 preferred stock.
The amendment became effective on December 12, 2007, upon filing with the Delaware secretary of state. In December 2007 the Company
issued 100,000 shares of its Series A preferred stock to its President and Chief Executive Officer for $1,000. The certificate
of designation of the Series A preferred stock provides: the holders of Series A preferred stock shall be entitled to receive
dividends when, as and if declared by the board of directors of the Company; participates with common stock upon liquidation;
convertible into one share of common stock; and has voting rights such that the Series A preferred stock shall have an aggregate
voting right for 54% of the total shares entitled to vote.



Stock
option plan

The
Royal Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on June 27, 2008 and reserves 8,000 shares
for Awards under the Plan, of which up to 6,000 may be designated as Incentive Stock Options. The Company’s Compensation
Committee is designated to administer the Plan at the direction of the Board of Directors. No options are outstanding under the
Plan at August 31, 2012.



Consulting
and financial services agreements

During
2011 and 2010, the Company entered into various consulting and financial services agreements as well as new loan agreements and
amendments to an existing loan agreement.  The following table summarizes the agreements.



|                                  |  |   | 2012   |  |  |   | 2011    | 
|--------------------------------- |  | - | ------ |  |  | - | ------- | 
|Shares issued                     |  |   | 2,000  |  |  |   | 11,800  | 
|Value of common stock and options |  | $ | 2,500  |  |  | $ | 176,000 | 
|Unamortized balance, end of year  |  | $ | 1,964  |  |  | $ | 52,000  | 
|Terms of agreements               |  |   | 7      |  |  |   | 2.5-9   | 
|                                  |  |   | months |  |  |   | months  | 







| | 7 | STOCK
                                                                SUBSCRIPTION RECEIVABLE
| | - | ---------------------------------------------------------------------------------------------



The
officers and directors of the Company have acquired common stock from the Company pursuant to note agreements, summarized as follows.



|                    |  |  |        |  |  |  |            |  |  |  | Original |  |  |  | Interest |   |  |   | Balance   |  |  |   | Balance   | 
|------------------- |  |  | ------ |  |  |  | ---------- |  |  |  | -------- |  |  |  | -------- | - |  | - | --------- |  |  | - | --------- | 
|Name                |  |  | Shares |  |  |  | Date       |  |  |  | Balance  |  |  |  | Rate     |   |  |   | 8/31/2012 |  |  |   | 8/31/2011 | 
|                    |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   |           |  |  |   |           | 
|Jacob Roth          |  |  | 14,000 |  |  |  | 6/1/2010   |  |  |  | 105,000  |  |  |  | 2        | % |  | $ | 101,285   |  |  | $ | 70,495    | 
|Jacob Roth          |  |  | 12,000 |  |  |  | 6/24/2010  |  |  |  | 120,000  |  |  |  | 2        | % |  |   | 119,940   |  |  |   | 119,940   | 
|Jacob Roth          |  |  | 24,000 |  |  |  | 11/30/2010 |  |  |  | 60,000   |  |  |  | 2        | % |  |   | 60,000    |  |  |   | 60,000    | 
|Jacob Roth          |  |  | 20,000 |  |  |  | 2/17/2011  |  |  |  | 31,900   |  |  |  | 2        | % |  |   | —         |  |  |   | 31,900    | 
|Frimet Taub         |  |  | 1,200  |  |  |  | 7/28/2009  |  |  |  | 29,937   |  |  |  | 2        | % |  |   | 29,937    |  |  |   | 29,937    | 
|                    |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   | 311,162   |  |  |   | 312,272   | 
|Accrued interest    |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   | 3,094     |  |  |   | 4,982     | 
|Related party total |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   | 314,256   |  |  |   | 317,254   | 
|Debt retirement     |  |  | 42,000 |  |  |  |            |  |  |  | 80,000   |  |  |  |          |   |  |   | 65,600    |  |  |   | 80,000    | 
|                    |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  | $ | 379,856   |  |  | $ | 397,254   | 



| | 8 | RELATED
                                                                PARTY TRANSACTIONS
| | - | ------------------------------------------------------------------------------------------



The
President and Chief Executive Officer of the Company made loans and advances to the Company since its inception. During fiscal
2005, the total amount of $6,560 was contributed to the capital of the Company.



In
December 2007 the Company issued 100,000 shares of its Series A preferred stock to its President and Chief Executive Officer for
$1,000. The certificate of designation of the Series A preferred stock provides: the holders of Series A preferred stock shall
be entitled to receive dividends when, as and if declared by the board of directors of the Company; participates with common stock
upon liquidation; convertible into one share of common stock; and has voting rights such that the Series A preferred stock shall
have an aggregate voting right for 54% of the total shares entitled to vote.



The
President and Chief Executive Officer of the Company was paid approximately $10,000 and $14,600 for office and travel expense
reimbursements during the years ended August 31, 2012 and 2011, respectively.



See
Note 6 above regarding stock subscription receivables.



| | 9 | supplementary
                                                                                                               oil and gas reserve
                                                                                                               information (unaudited)
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company had no interests in proved oil and natural gas properties during 2012 and 2011. Accordingly, no supplementary oil and
gas reserve information is presented.









| | 10 | SUBSEQUENT
                                                                                                                EVENT
| | -- | --------------------------------------------------------------------------------------------------------------------------------



On
August 7, 2012, the Company received approval by written consent, in lieu of a special meeting, of the holders of a majority of
our outstanding voting power authorizing the Board of Directors of the Company to: (i) effectuate the reverse stock split of our
issued and outstanding shares of common stock, par value $0.00001, on a 1 for 500 basis and (ii) increase the authorized shares
of common stock, par value $0.00001, from 100,000,000 shares to 500,000,000 shares. The stock split was effectuated on October
1, 2012 upon filing appropriate documentation with FINRA. The increase in authorized shares was completed on October 9, 2012 when
the amendment was filed with the Delaware Secretary of State. All share references included herein have been adjusted as if the
change took place before the date of the earliest transaction reported.



ITEM
9: 	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



Not
applicable.



ITEM
9A:	CONTROLS AND PROCEDURES



|(a) |  | Evaluation of Disclosure Controls
and Procedures
|--- |  | ------------------------------------------------



Under
the PCAOB standards, a control deficiency exists when the design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe
than a material weakness, yet important enough to merit the attention by those responsible for oversight of the company's financial
reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements
will not be prevented or detected on a timely basis.



Under
the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of August 31, 2012. Our management
has determined that, as of August 31, 2012, the Company's disclosure controls and procedures are effective.



|(b) |  | Changes in Internal Controls
|--- |  | ----------------------------



There
were no changes in our internal control over financial reporting during the quarter ended August 31, 2012 that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.



|(c) |  | Management’s Annual Report
on Internal Control Over Financial Reporting
|--- |  | -----------------------------------------------------------------------



Management
of the Company is responsible for establishing and maintaining effective internal control over financial reporting, as defined
in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable
assurance to the Company's management and Board of Directors regarding the preparation and fair presentation of published financial
statements in accordance with the United States' generally accepted accounting principles (US GAAP), including those policies
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and disposition of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in
accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use or disposition of the Company's 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. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.



Under
the supervision and with the participation of our management, including our chief executive officer and our chief financial officer,
we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in its Internal Control - Integrated
Framework. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management has concluded
that our internal control over financial reporting was effective as of August 31, 2012.

This
annual report does not include an audit or attestation report of our registered public accounting firm regarding our internal
control over financial reporting. Our management's report was not subject to audit or attestation by our registered public accounting
firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.

ITEM
9B:	OTHER INFORMATION



Pursuant
to General Instruction B of Form 8-K, any reports previously or in the future submitted under Item 2.02 (Results of Operations
and Financial Condition) are not deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act
of 1934 and the Company is not subject to the liabilities of that section, unless the Company specifically states that the information
is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Securities
Act or Exchange Act. If a report on Form 8-K contains disclosures under Item 2.02, whether or not the report contains disclosures
regarding other items, all exhibits to such report relating to Item 2.02 will be deemed furnished, and not filed, unless the registrant
specifies, under Item 9.01 (Financial Statements and Exhibits), which exhibits, or portions of exhibits, are intended to be deemed
filed rather than furnished pursuant to this instruction. The Company is not incorporating, and will not incorporate, by reference
these reports into a filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.







PART
III



Item
10:	Directors, Executive Officers and corporate governance



Executive
Officers and Directors



The
following section sets forth the names, ages and current positions with the Company held by the Directors, Executive Officers
and Significant Employees; together with the year such positions were assumed. Frimet Taub is the daughter of Jacob Roth. We are
not aware of any arrangement or understanding between any Director or Executive Officer and any other person pursuant to which
he was elected to his current position. Each Executive Officer will serve until he or she resigns or is removed or otherwise disqualified
to serve, or until his or her successor is elected and qualified.



Each
Director will serve until he or she resigns or is removed or otherwise disqualified to serve or until his or her successor is
elected. The Company currently has two Directors. The Board of Directors does not expect to appoint additional Directors until
a potential acquisition is identified.





|            |  |  |     |  |  |                                                                          |  | DATE FIRST       
|----------- |  |  | --- |  |  | ------------------------------------------------------------------------ |  | -----------------
|NAME        |  |  | AGE |  |  | POSITION                                                                 |  | ELECTED/APPOINTED
|            |  |  |     |  |  |                                                                          |  |                  
|Jacob Roth  |  |  | 65  |  |  | President, Chief Executive Officer, Chief Financial Officer and Director |  | March 22, 1999   
|            |  |  |     |  |  |                                                                          |  |                  
|Frimet Taub |  |  | 32  |  |  | Secretary, Treasurer and Director                                        |  | March 22, 1999   



JACOB
ROTH was named President, Chief Executive Officer, Chief Financial Officer and Director of RER on March 22, 1999. Previously,
Mr. Roth was Chief Executive Officer of Virilitec Industries, Inc., a public company engaged in attempting to distribute a line
of bioengineered virility nutritional supplements, from July 1, 2002, until December 1, 2003. Additionally, Mr. Roth was the President
of JR Consulting, a public company engaged in consulting for other corporations, from 1982 until 1995. When not otherwise employed,
Mr. Roth is a financial consultant to corporations.



FRIMET
TAUB was named Secretary, Treasurer and Director of the Company on March 22, 1999. Mrs. Taub was a teacher at UTA in Brooklyn,
New York from 1999 through 2002 and is not currently employed outside her home.



Audit
Committee



The
Board of Directors of the Company serves as the audit committee.

Compliance
with Section 16(a) Of the Exchange Act

Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers, directors and persons
who own more than ten percent of the Company’s common stock to file initial reports of ownership and changes in ownership
with the SEC. Additionally, SEC regulations require that the Company identify any individuals for whom one of the referenced reports
was not filed on a timely basis during the most recent fiscal year or prior fiscal years. To the Company’s knowledge, based
solely on a review of reports furnished to it, all required reports have been filed when due.

Code
of Ethics

The
Company has not yet adopted a code of ethics to apply to its principal executive officer, principal financial officer, principal
accounting officer and controller, or persons performing similar functions



Item
11:	 Executive Compensation



Jacob
Roth currently serves as President, Chief Executive Officer and Chief Financial Officer of the Company and Frimet Taub serves
as Secretary and Treasurer of the Company. There are no other individuals involved in the management or administration of the
Company. Neither Mr. Roth nor Mrs. Taub previously received any form of compensation, either direct or indirect, and no compensation
is being accrued on the books of the Company.

In
2009, Mr. Roth acquired 1,900 shares of the Company's common stock for $47,500 ($0.05 per share) at a time when the closing price
for the stock was $0.17 per share. The difference of $114,000 was included in non-cash compensation in the statement of operations.

In
2009, Mrs. Taub acquired 1,200 shares of the Company's common stock for $30,000 (0.05 per share) at a time when the closing price
for the stock was $0.17 per share. The difference of $72,000 was included in non-cash compensation in the statement of operations









Item
12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters



| | (a) | SECURITY
                                                           OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
| | --- | ----------------------------------------------------------------------------------------------------------



The
table below lists the beneficial ownership of the Company’s voting securities by each person known to be the beneficial
owner of more than 5% of such securities. As of August 31, 2012, there were 179,527 shares of the Company’s common stock
issued and outstanding. To the best of our knowledge, the persons named have sole voting and investment power with respect to
such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.

The
information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the
rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these
rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote
or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to
own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within
60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may
be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular
date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as
to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60
days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. We believe
that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.
There are currently no outstanding convertible securities, warrants, options or other rights.









|             |  |                                                     |  |                  |  |             
|------------ |  | --------------------------------------------------- |  | ---------------- |  | ------------
|             |  |                                                     |  | Amount
    and   |  |             
|Title        |  |                                                     |  | nature     of    |  | Percent     
|of
    class |  | Name
    and address
    of beneficial owner     ** |  | beneficial owner |  | of
    class
|             |  |                                                     |  |                  |  |             
|Common       |  | Jacob
    Roth                                      |  | 83,400           |  | 46.46%      
|             |  |                                                     |  |                  |  |             
|Series
    A |  | Jacob
    Roth                                      |  | 100,000          |  | 100.00%     
|Preferred    |  |                                                     |  |                  |  |             



**
The address for each of the named is in care of the Company at 543 Bedford Ave., #176, Brooklyn, New York 11211.





| | (b) | SECURITY
                                                          OWNERSHIP OF MANAGEMENT
| | --- | ------------------------------------------------------------------------------------------



The
following information lists, as to each class, equity securities beneficially owned by all officers and directors, and of the
directors and officers of the issuer, as a group as of August 31, 2011.



|             |  |                                                     |  |                  |  |             
|------------ |  | --------------------------------------------------- |  | ---------------- |  | ------------
|             |  |                                                     |  | Amount
    and   |  |             
|Title        |  |                                                     |  | nature     of    |  | Percent     
|of
    class |  | Name
    and address
    of beneficial owner     ** |  | beneficial owner |  | of
    class
|             |  |                                                     |  |                  |  |             
|Common       |  | Jacob
    Roth                                      |  | 83,400           |  | 46.46%      
|             |  |                                                     |  |                  |  |             
|Common       |  | Frimet
    Taub                                     |  | 1,700            |  | 0.94%       
|             |  |                                                     |  |                  |  |             
|Common       |  | All
    officers and directors                      |  | 85,100           |  | 47.40%      
|             |  | as
    a group (2 persons)                          |  |                  |  |             
|             |  |                                                     |  |                  |  |             
|Series
    A |  | Jacob
    Roth                                      |  | 100,000          |  | 100.00%     
|Preferred    |  |                                                     |  |                  |  |             



**
The address for each of the named is in care of the Company at 543 Bedford Ave., #176, Brooklyn, New York 11211.



#
Convertible into one common share and has voting rights such that the Series A preferred stock shall have an aggregate voting
right for 54% of the total shares entitled to vote.







Equity
Compensation Plan Information



|                                    |                                |  |                               |  | Number
    of securities   
|----------------------------------- | ------------------------------ |  | ----------------------------- |  | ---------------------------
|                                    |                                |  |                               |  | remaining
    available for
|                                    |                                |  |                               |  | future
    issuance under  
|                                    | Number
    of securities to be |  | Weighted-average
    exercise |  | equity
    compensation    
|                                    | issued
    upon exercise of    |  | price
    of outstanding      |  | plans
    (excluding       
|                                    | outstanding
    options,       |  | options,
    warrants         |  | securities
    reflected   
|Plan
    category                   | warrants
    and rights        |  | and
    rights                |  | in
    the first column    
|                                    |                                |  |                               |  |                            
|Equity
    compensation plans       |                                |  |                               |  |                            
|approved
    by security holders    | -                              |  |                               |  | 8,000                      
|                                    |                                |  |                               |  |                            
|Equity
    compensation plans       |                                |  |                               |  |                            
|not
    approve by security holders | -                              |  |                               |  | -                          
|                                    |                                |  |                               |  |                            
|Total                               | -                              |  |                               |  | 8,000                      



The
Royal Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on June 27, 2008 and reserves 8,000 shares
for Awards under the Plan, of which up to 6,000 may be designated as Incentive Stock Options. The Company’s Compensation
Committee is designated to administer the Plan at the direction of the Board of Directors.



Item
13: 	Certain Relationships and Related Transactions and director independence



The
officers and directors of the Company have acquired common stock from the Company pursuant to note agreements, summarized as follows.



|                 |  |  |        |  |  |  |            |  |  |  | Original |  |  |  | Interest |   |  |   | Balance   |  |  |   | Balance   | 
|---------------- |  |  | ------ |  |  |  | ---------- |  |  |  | -------- |  |  |  | -------- | - |  | - | --------- |  |  | - | --------- | 
|Name             |  |  | Shares |  |  |  | Date       |  |  |  | Balance  |  |  |  | Rate     |   |  |   | 8/31/2012 |  |  |   | 8/31/2011 | 
|                 |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   |           |  |  |   |           | 
|Jacob Roth       |  |  | 14,000 |  |  |  | 6/1/2010   |  |  |  | 105,000  |  |  |  | 2        | % |  | $ | 101,285   |  |  | $ | 70,495    | 
|Jacob Roth       |  |  | 12,000 |  |  |  | 6/24/2010  |  |  |  | 120,000  |  |  |  | 2        | % |  |   | 119,940   |  |  |   | 119,940   | 
|Jacob Roth       |  |  | 24,000 |  |  |  | 11/30/2010 |  |  |  | 60,000   |  |  |  | 2        | % |  |   | 60,000    |  |  |   | 60,000    | 
|Jacob Roth       |  |  | 20,000 |  |  |  | 2/17/2011  |  |  |  | 31,900   |  |  |  | 2        | % |  |   | —         |  |  |   | 31,900    | 
|Frimet Taub      |  |  | 1,200  |  |  |  | 7/28/2009  |  |  |  | 29,937   |  |  |  | 2        | % |  |   | 29,937    |  |  |   | 29,937    | 
|                 |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   | 311,162   |  |  |   | 312,272   | 
|Accrued interest |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  |   | 3,094     |  |  |   | 4,982     | 
|                 |  |  |        |  |  |  |            |  |  |  |          |  |  |  |          |   |  | $ | 314,256   |  |  | $ | 317,254   | 



Jacob
Roth is our only promoter. He has never received anything of value, tangible or intangible, directly or indirectly, from us, other
than reimbursements of expenses incurred in the ordinary course of business. Mr. Roth acquired 9,800 shares of our common stock
for a total consideration of $490 in March 1999. Subsequently, Mr. Roth has acquired shares pursuant to stock subscription agreements
as summarized above.



On
April 14, 2011, the Company's CEO returned 8,500 shares of the Company's common stock to the Company and it was cancelled, along
with the related stock subscription notes with a combined principal balance of $144,866 and accrued interest of $2,470.



In
December 2007 the Company issued 100,000 shares of its Series A preferred stock to its President and Chief Executive Officer for
$1,000. The certificate of designation of the Series A preferred stock provides: the holders of Series A preferred stock shall
be entitled to receive dividends when, as and if declared by the board of directors of the Company; participates with common stock
upon liquidation; convertible into one share of common stock; and has voting rights such that the Series A preferred stock shall
have an aggregate voting right for 54% of the total shares entitled to vote.



Mrs.
Taub is the daughter of Mr. Roth. Mrs. Taub acquired 500 shares of our common stock for a total consideration of $25 ($.0001 per
share) in March 1999. In July 2009, Mrs. Taub acquired 1,200 shares of common stock in exchange for cash of $63 and a note receivable
in the amount of $29,937, as summarized above.



The
President and Chief Executive Officer of the Company was paid approximately $10,000 and $14,000 for office and travel expense
reimbursements during the years ended August 31, 2012 and 2011, respectively.



ITEM
14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES



Audit
Fees – The aggregate fees billed as of October 31, 2012 and 2011 for professional services rendered by the Company’s
accountant was approximately $6,685 and $8,915 for the audit of the Company’s annual financial statements and the quarterly
reviews for the fiscal years ended August 31, 2012 and 2011, respectively. The 2011 audit is included in the 2012 amount and the
2010 audit is included in the 2011 amount.



Audit-Related
Fees – None.



Tax
Fees – None.



All
Other Fees – Other than the services described above, no other fees were billed for services rendered by the principal accountant.



Audit
Committee Policies and Procedures – Not applicable.

If
greater than 50 percent, disclose the percentage of hours expended on the principal accountant’s engagement to audit the
registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other
than the principal accountant’s full-time, permanent employees – Not applicable.







part
iv



ITEM
15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES



|(a) |  | The
    following documents are filed as part of this report:
|--- |  | -------------------------------------------------------------
|    |  | 1                                                            
|    |  |                                                              
|    |  |                                                              
|    |  |                                                              
|    |  |                                                              
|    |  |                                                              
|    |  |                                                              
|    |  |                                                              
|    |  | 2                                                            
|    |  | 3                                                            



|        |  |  |                                                                                                                                                                                                                          
|------- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |  | Description                                                                                                                                                                                                              
|3.1     |  |  | Restated
    Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Form SB-2 Registration
    Statement dated May 19, 2006)                                             
|3.2     |  |  | Amended
    and Restated By Laws of the Company (incorporated by reference to Exhibit 3.2 to the Company's Form SB-2 Registration Statement
    dated May 19, 2006)                                                      
|10.1    |  |  | Real
    estate purchase agreement from Mermelstein dated August 25, 2005 (incorporated by reference to Exhibit 10.1 to the Company's
    Form SB-2 A/4 Registration Statement dated May 19, 2006)                       
|10.2    |  |  | Amendment
    to agreement to purchase real estate dated February 28, 2006 (incorporated by reference to Exhibit 10.2 to the Company's Form
    SB-2 A/4 Registration Statement dated may 19, 2006)                      
|10.3    |  |  | Form
    of Non-Qualified Stock Option Agreement used by the Company in connection with the Company's 2008 Stock Option Plan (incorporated
    by reference to Exhibit 4.1 to the Company's Form S-8 filed July 14, 2008)
|31.1    |  |  | Certification
    of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934                                                                              
|32.1    |  |  | Certification
    of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
    Section 1350                                                       













SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) 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.



|Date:  December
14, 201 | Royal
    Energy Resources, Inc.     
|----------------------- | -------------------------------------
|                        | By: /s/
    Jacob Roth               
|                        | Jacob
    Roth President, CEO and CFO

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.



|Signature                                              |  | Title                                                     |  | Date                                                       
|------------------------------------------------------ |  | --------------------------------------------------------- |  | -----------------------------------------------------------
|/s/
        Jacob Roth
        /s/
        Frimet Taub |  | Director,
        President, CEO and CFO
        Director |  | December
        13, 2012
        December
        13, 2012