DIAMOND HOLDINGS, INC. - Quarter Report: 2019 July (Form 10-Q)

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

Form 10-Q

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended July 31, 2019

[   ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 333-215459

Venture Vanadium Inc.

 (Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	2400 (Primary Standard Industrial Classification Code Number)	32-0507158 (I.R.S. Employer Identification Number)

One Oxford Centre, 301 Grant Street, Suite 4300, Pittsburgh, 15219

(Address of principal executive offices)

412-577-2499  

(Telephone number, including area code)

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

Title of each class	Symbol	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X)       No ( )

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

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☒
			Emerging growth company	☒

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

Yes (X)       No (   )

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  54,430,000 common shares issued and outstanding as of September 4, 2019.

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)  

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

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PART 1 – FINANCIAL INFORMATION

Item 1.  Financial Statements

The accompanying interim financial statements of Venture Vanadium Inc. (the “Company”, “we”, “us” or “our”) have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

The interim financial statements are condensed and should be read in conjunction with our latest annual financial statements.

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly our financial condition, results of operations, and cash flows for the interim periods presented.

 

 

 

 

 

 

 

 

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

BALANCE SHEETS

July 31, 2019

(Unaudited)

ASSETS		July 31, 2019		October 31, 2018
Current Assets
Cash and cash equivalents	$	-	$	5,719
Prepaid expense		-		4,338
Total Current Assets		-		10,057
Fixed Assets
Exploration License Options		66,150		8,836
Total Non-current Assets		-		8,836
Total Assets	$	66,150	$	18,893
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Current Liabilities     Accounts Payable		1,700		-
Related Party Loans	$	122,981	$	25,900
Total Current Liabilities		124,681		25,900
Total Liabilities		124,681		25,900
Stockholders’ Equity
Common stock, par value $0.001; 750,000,000 shares authorized, 54,430,000 and 52,800,000 shares issued and outstanding respectively		54,430		4,440
Discount on common stock		(21,800)		-
Additional paid in capital		36,741		27,040
Retained earnings (accumulated deficit)		(127,902)		(38,487)
Total Stockholders’ Deficit		(58,531)		(7,007)
Total Liabilities and Stockholders’ Equity	$	66,150	$	18,893

In February 2019, we enacted a 1:12 forward share split and all references to number of shares have been retroactively adjusted.

See accompanying notes, which are an integral part of these financial statements

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

STATEMENTS OF OPERATIONS

Three and nine months ended July 31, 2019 and 2018

(Unaudited)

		Three Months Ended July 31,				Nine Months Ended July 31,
		2019		2018		2019		2018
Revenue	$	-	$	-	$	-	$	17,756
Cost of goods sold		-		-		-		2,207
Gross Profit		-		-		-		15,549
OPERATING EXPENSES
General and Administrative Expenses	$	59,808		10,181	$	89,415		26,793
TOTAL OPERATING EXPENSES		59,808		10,181		89,415		26,793
EARNINGS/LOSS FROM OPERATIONS		(59,808)		(10,181)		(89,415)		(11,244)
PROVISION FOR INCOME TAXES		-		-		-		-
NET INCOME/LOSS	$	(59,808)	$	(10,181)	$	(89,415)	$	(11,244)
NET LOSS PER SHARE: BASIC AND DILUTED	$	(0.00)	$	0.00	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		54,430,000		52,800,000		54,430,000		52,800,000

In February 2019, we enacted a 1:12 forward share split and all references to number of shares have been retroactively adjusted.

 

See accompanying notes, which are an integral part of these financial statements

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Nine months ended July 31, 2019

(Unaudited)

 

 

See accompanying notes, which are an integral part of these financial statements

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

STATEMENTS OF CASH FLOWS

Nine months ended July 31, 2019 and 2018

(Unaudited)

		Nine Months Ended July 31,
		2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES Net loss	$	(89,415)	$	(11,244)
Depreciation expense		447		2,635
Adjustments to reconcile net loss to net cash (used in) operating activities:
Inventory		-		2208
Prepaid rent		4,338		-
CASH FLOWS USED IN OPERATING ACTIVITIES		(84,630)		(6,401)
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal of Fixed Assets		7,253		-
Purchase of Fixed Assets		(66,150)		-
Payment of rent deposits		-		(5,809)
Retired property		1,136		-
CASH FLOWS USED IN INVESTING ACTIVITIES		(57,761)		(5,809)
CASH FLOWS FROM FINANCING ACTIVITIES Accounts Payable Capital Stock		1,700 1,150		- -
Additional Paid In Capital Related Party Loans		36741 97,081		- 6,000
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		136,672		6,000
NET DECREASE IN CASH		(5,719)		(6,210)
Cash, beginning of period		5,719		7,415
Cash, end of period	$	-	$	1,205
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	-	$	-
Income taxes paid	$	-	$	-

See accompanying notes, which are an integral part of these financial statements

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Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

NOTES TO THE FINANCIAL STATEMENTS

July 31, 2019

(UNAUDITED)

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

Venture Vanadium Inc. (the “Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on September 26, 2016. Venture Vanadium Inc. (Formerly Aura Energy Inc.) and was previously engaged in the production of wood-manufactured bow ties in China, Hunan Province. This has now ceased. On June 12, 2019, we entered into an assignment agreement with Ian Ilsley to assign his the rights and obligations under an option agreement to acquire a 100% interest in over 30 mineral claims (The Desgrobois Vanadium/Titanium Property) representing 1,789.80 hectares (4,422.69 acres) situated in Quebec. We now intend to focus on the minerals and resources sector.

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with our financial statements for the fiscal year ended October 31, 2018 and the notes thereto contained in our Annual Report on Form 10-K.

Note 2 – GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. We had no revenues for the nine months ended July 31, 2019. We currently have losses and have not completed our efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about our ability to continue as a going concern. Management anticipates that we will depend, for the near future, on additional investment capital to fund operating expenses. We intend to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that we will be successful in this or any of our endeavors or become financially viable and continue as a going concern.

Note 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America. Our year-end is October 31.

Use of Estimates

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

Recently Issued Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on us.

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued by the FASB (including its Emerging Issues Task Force), the AICPA or the SEC would, if adopted, have a material effect on the accompanying financial statements

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Note 4 – RELATED PARTY LOANS

Related Party Loans are not covered by a formal loan agreement and are interest free with no fixed repayment date. They are due to Ian Ilsley, the company’s sole director and controlling shareholder and were made following the change of control on May 29, 2019.

Note 5 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10), we have analyzed our operations subsequent to July 31, 2019 to the date these financial statements were issued and have determined that we do not have any material subsequent events to disclose in these financial statements

Note 6 – MINERAL PROPERTIES

The Company will expense mineral property exploration expenditures when incurred.  When it has established that a mineral deposit is commercially mineable and following a decision to commence development, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized and will be amortized against production following commencement of commercial production, or written off if the property is sold, allowed to lapse or abandoned. Mineral property acquisition costs are initially capitalized when incurred. Option payments and expenditures required to earn an interest in the properties are capitalized. The Company assesses the carrying costs for impairment. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report for the year ended October 31, 2018 for a discussion of some of the important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Forward looking statement notice

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

Corporate History

Venture Vanadium Inc., formerly known as Aura Energy Inc. and as Arcom (the “Company”), was incorporated under the laws of the State of Nevada on September 26, 2016. Venture Vanadium Inc. has only one officer and director who is Ian Ilsley. We were engaged in the production of wood-manufactured bow ties in China, Hunan Province. This activity has now ceased. On June 12, 2019, we entered into an assignment agreement with Ian Ilsley to assign his the rights and obligations under an option

 

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agreement to acquire exploration rights over 30 mineral claims (The Desgrobois Vanadium/Titanium Property) representing 1,789.80 hectares (4,422.69 acres) situated in Quebec.

Under the terms of the assignment agreement, we issued 50,000 shares to Ian Ilsley on June 21, 2019 and will issue a further 50,000 shares ninety days thereafter in consideration for him having entered into the assignment agreement.

Under the terms of the option agreement, payments totaling $65,000 were made to the Optionor and 1,150,000 shares were issued to the Optionor. These payments are reflected in the accounts to July 31, 2019. In addition, we will make the following payments and share issuances to the Optionor:

·

500,000 shares on or before November 6, 2019

·

500,000 shares on or before April 20, 2020

·

500,000 shares on or before November 6, 2020

·

$35,000 on or before November 6, 2020

We are currently a shell company (as defined in Rule 12b-2 of the Exchange Act).

  

On February 1, 2019, we filed a Certificate of Change with the Secretary of State of Nevada to effect a 12-for-1 forward split which increased the number of outstanding shares of common stock from 4,440,000 to 53,280,000.

RESEARCH AND DEVELOPMENT EXPENDITURES

We have not incurred any research expenditures since our incorporation.

  

BANKRUPTCY OR SIMILAR PROCEEDINGS

  

There has been no bankruptcy, receivership or similar proceeding entered into either voluntarily by us and involuntarily against us.

  

REORGANIZATIONS, PURCHASE OR SALE OF ASSETS

  

On February 1, 2019, we filed a Certificate of Change with the Secretary of State of Nevada to effect a 12-for-1 forward split which increased the number of outstanding shares of common stock from 4,440,000 to 53,280,000.

On May 29, 2019, we entered into a split-off agreement (the “Split-Off Agreement”) with Hui Liu Ping, our then current sole director and officer, and Ian Ilsley, our Secretary (and now our sole director, President and Treasurer), pursuant to which we sold all of our assets and properties in exchange for her acquisition of all of our debts, adverse claims, liabilities, judgments and obligations.  As of January 31, 2019, our assets totaled approximately $7,700 and our liabilities consisted of $31,900 of related party loans.  The obligations under those related-party loans were assigned to Ms. Ping as part of the assignment of liabilities.  Our assets comprise an option to acquire a 100% interest in over 30 mineral claims (The Desgrobois Vanadium/Titanium Property) representing 1,789.80 hectares (4,422.69 acres) situated in Quebec. However, we are a “shell company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

  

COMPLIANCE WITH GOVERNMENT REGULATION

  

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities.

EMPLOYEES AND EMPLOYMENT AGREEMENTS

  

We have no employees, except our sole officer and director Ian Ilsley, as of the date of this report. We have no employment agreement with Mr. Ilsley. Our sole officer and director, Ian Ilsley, currently devotes approximately 20 hours per week to company matters. As our business and operations increase, we will assess the need for full-time management and administrative support personnel.

 

 

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LEGAL PROCEEDINGS

  

 

There are no pending legal proceedings to which we are a party or in which any of our directors, officers or affiliates (any owners of record or beneficially of more than 5% of any class of our voting securities) is a party adverse to us or has a material interest adverse to us.

RESULTS OF OPERATIONS

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Revenue and cost of goods sold

For the nine months ended July 31, 2019, we reported no revenue.

Operating expenses

Total operating expenses for the nine-month period ended July 31, 2019 and 2018 were $89,415 and $26,793. The operating expenses for the nine-month period ended July 31, 2019 included Gain/Loss on Asset Sale of $1,953; Bank Service Charges of $953; depreciation expense of $446; audit fees of $22,750; legal fees of $28,394; professional fees of $3,204; rent expense of $2925; regulatory filing fees of $2,960; Retired property of $1,136; utilities of $133; miscellaneous $3,204; geologist and  other technical fees of $7,203

Net Loss

The net loss for the nine-month period ended July 31, 2019, and 2018 was $89,415 and $11,244.

LIQUIDITY AND CAPITAL RESOURCES

As of July 31, 2019, our total assets were $66,150.

As of July 31, 2019, our current liabilities were $124,681 and Stockholders’ deficit was $58,531.

CASH FLOWS FROM OPERATING ACTIVITIES

For the nine months ended July 31, 2019, net cash flows provided by operating activities was negative $84,630.

CASH FLOWS FROM INVESTING ACTIVITIES

For the nine months ended July 31, 2019, we spent $57,761 of cash in investing activities.

CASH FLOWS FROM FINANCING ACTIVITIES

For the nine months ended July 31, 2019, we used $136,672 of cash in financing activities.

Emerging Growth Company

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

  

·      

Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

·        

Provide an auditor attestation with respect to management’s report on the effectiveness of our internal controls over financial reporting;

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·        

Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

·        

Submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

·        

Disclose certain executive compensation related items such as the correlation between executive compensation and performance comparisons of the CEO’s compensation to median employee compensation.

  

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

  

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. However, even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or the auditor attestation of internal controls over financial reporting.

Our independent registered public accountant has issued a going concern opinion for our fiscal year ended October 31, 2018, and we anticipate that they will issue another going concern opinion in connection with this fiscal year. This means that there is doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.

  

OFF-BALANCE SHEET ARRANGEMENTS

  

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

  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2019. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

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Changes in Internal Controls over Financial Reporting

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

PART II.  OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS

There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.

ITEM 1A.	RISK FACTORS

Not applicable.

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

None

ITEM 3.	DEFAULTS UPON SENIOR SECURITES

None

ITEM 4.	MINE SAFTEY DISCLOSURE

Not applicable

ITEM 5.	OTHER INFORMATION

None.

ITEM 6.	EXHIBITS

The following exhibits are included as part of this report by reference:

31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

SIGNATURES

  

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on September 19, 2019.

  

	Venture Vanadium Inc.
	By:	/s/	Ian Ilsley
		Name:	Ian Ilsley
		Title:	President, Treasurer, Secretary and Director
			(Principal Executive, Financial and Accounting Officer)

  

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