DIAMOND HOLDINGS, INC. - Quarter Report: 2020 January (Form 10-Q)

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.

BALANCE SHEETS

January 31, 2020

(Unaudited)

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

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Venture Vanadium Inc.

STATEMENTS OF OPERATIONS

Three months ended January 31, 2020 and 2019

(Unaudited)

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

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Venture Vanadium Inc.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three months ended January 31, 2020 and 2019

(Unaudited)

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

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Venture Vanadium Inc.

STATEMENTS OF CASH FLOWS

Three months ended January 31, 2020 and 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.)

NOTES TO THE FINANCIAL STATEMENTS

January 31, 2020

(UNAUDITED)

Note 1 – ORGANIZATION AND NATURE OF BUSINESS

In January 2020, we issued 100,000 shares to pursuant to a consulting agreement. The shares were initially valued at $105,000 with $35,000 being recognized as work program and technical expense and the remaining $70,000 to be recognized as expense over the remaining term of the agreement.

You should read the following discussion and analysis of our financial condition and results of operations together with our 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, 2019 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 rights and obligations under an option 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 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. On November 22, 2019, Mr. Ilsley, Venture Vanadium Inc. and Mr. Yacoub entered into the Amended and Restated Desgrosbois Option Agreement whereby certain terms of the original agreement were amended.  Under the Amended and Restated Agreement, Mr. Yacoub agreed to transfer the titles in exchange for a $70,000 cash payment, the receipt from the Company of 1,000,000 shares and a two per cent (2.0%) Net Smelter Return on all metals extracted from the property. These transactions are reflected in the accounts to January 31, 2020.

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.

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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.  Unless otherwise noted, all share amounts provided in this report reflect such reverse stock split.

Our assets comprise 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.

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 30 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.

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 avenues, the sale of equity or debt securities.

Revenue and cost of goods sold

For the three months ended January 31, 2020, we reported no revenue.

Operating expenses

Total operating expenses for the three-month period ended January 31, 2020, were $86,661 and the total operating expenses for the three-month period ended January 31, 2019, all of which related to discontinued activities, were $17,213. The operating expenses for the three-month period ended January 31, 2020 included audit fees of $4,775; legal & professional fees of $12,700; rent expense of $3,903; regulatory filing fees of $4,717; director’s fees of $15,000; geologist’s and other technical fees of $38,000; travel, entertaining and subsistence of $5,511 and sundry general and administrative expenses of $2,055. The increase in expenditure reflects the increased activity by the company due to its new operations, its exploration activities and the strengthening of the management team.

Net Loss

The net loss for the three-month period ended January 31, 2020, was $86,661 and the net loss for the three-month period ended January 31, 2019, all of which related to discontinued activities, was $17,213.

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Liquidity and Capital Resources

As of January 31, 2020, our total assets were $1,107,782 compared to $309,989 as of October 31, 2020; the increase resulting from the acquisition of the title to the 30 Desgrosbois Proerty claims which were previously under option to the company.

As of January 31, 2020, our current liabilities were $134,863 and Stockholder’s Equity was $972,919.

CASH FLOWS FROM OPERATING ACTIVITIES

For the three-month period ended January 31, 2020, net cash flows used in operating activities was negative $67,207, compared with negative $16,062 for the three-month period ended January 31, 2019. The cash flows used in in operating activities for the three-month period ended January 31, 2019 related entirely to discontinued operations. The increase in cash flows used in the three-month period ended January 31, 2020 reflects the increased activity by the company due to its new operations, its exploration activities and the strengthening of the management team.

CASH FLOWS FROM INVESTING ACTIVITIES

For the three-month period ended January 31, 2020, we used $105,000 of cash in investing activities which related to the acquisition of the title to the 30 Desgrosbois Proerty claims which were previously under option to the company. This compares with cash flows from investing activities in the corresponding period ending January 31, 2019 of $7,253 which related to the disposal of assets used in discontinued activities.

CASH FLOWS FROM FINANCING ACTIVITIES

For the three-month period ended January 31, 2020, we used $5,000 of cash in financing activities, compared to inflows of $6,000 for the three-month period ended January 31, 2019. These were in connection with changes in related party loans in both periods.

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; 

·         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

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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, 2019, 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 January 31, 2020. 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.

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

We are not a party to any material 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.

Not applicable.

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On January 8, 2020, we issued 100,000 shares to a consultant pursuant to the terms of his consultancy agreement.  This issuance of securities qualified for the exemption from registration continued in section 4(a) of the Securities Act of 1933.

None

Not applicable

None.

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

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 March 06, 2020.

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