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 January 31, 2020

 

[   ] 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)

 

1090

(Primary Standard Industrial Classification Code Number)

 

 

32-0507158

(I.R.S. Employer Identification Number)

 

One Oxford Centre, 301 Grant Street, Suite 4300, Pittsburgh, PA 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 (  )       No ( X )

 

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  56,047,470 common shares issued and outstanding as of February 19, 2020.

 

 

 

Venture Vanadium Inc.

 

 

QUARTERLY REPORT ON FORM 10-Q

 

TABLE OF CONTENTS

 

Page

PART I

 FINANCIAL INFORMATION:

3

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

 

 

 

Balance Sheets (Unaudited) as of January 31, 2020 and October 31, 2019

 

Interim Unaudited Statements of Operations for the three months ended January 31, 2020, and 2019

 

4

 

5

 

Unaudited Statements of Changes in Stockholders’ Equity for the three months ended January 31, 2020 and 2019

 

Interim Unaudited Statements of Cash Flows for the three months ended January 31, 2020, and 2019

 

6

 

7

 

Notes to the Interim Unaudited Financial Statements

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

11

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

14

 

 

 

Item 4.

Controls and Procedures

14

 

 

 

PART II

OTHER INFORMATION:

 

 

 

 

Item 1.

Legal Proceedings

14

 

 

 

Item 1A

Risk Factors

14

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

15

 

 

 

Item 3.

Defaults Upon Senior Securities

15

 

 

 

Item 4.

Mine Safety Disclosure

15

 

 

 

Item 5.

Other Information

15

 

 

 

Item 6.

Exhibits

15

 

 

 

 

 Signatures

15

 

 

 

 

2

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

Venture Vanadium Inc.

BALANCE SHEETS

January 31, 2020

(Unaudited)

 

ASSETS

 

January 31, 2020

 

October 31, 2019

Current Assets

 

 

 

 

Cash and cash equivalents

$

7,732

$

184,939

Prepaid expense

 

70,000

 

-

Total Current Assets

 

77,732

 

184,939

Fixed Assets

 

 

 

 

Exploration Licenses (2019 Options)

 

1,030,050

 

125,050

Total Non-current Assets

 

1,030,050

 

125,050

Total Assets

$

1,107,782

$

309,989

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Liabilities

 

 

 

 

Current Liabilities

   Accounts Payable

 

33,382

 

48,928

   Related Party Loans

$

101,481

$

106,481

Total Current Liabilities

 

134,863

 

155,409

 

 

 

 

 

Total Liabilities

 

134,863

 

155,409

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

Common stock, par value $0.001; 75,000,000 shares authorized, 56,047,470 and 54,947,470

shares issued and outstanding respectively

 

56,047

 

54,947

Discount on common stock

 

(21,800)

 

(21,800)

Additional paid in capital

 

1,249,024

 

345,124

Retained earnings (accumulated deficit)

 

(310,352)

 

(223,691)

Total Stockholder’s Equity

 

972,919

 

154,580

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

$

1,107,782

$

309,989

 

 

 

 

 

 

 

 

 

 

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

 

 

4

 

 

 

Venture Vanadium Inc.

STATEMENTS OF OPERATIONS

Three months ended January 31, 2020 and 2019

(Unaudited)

 

 

 

 

 

Three Months Ended January 31,

 

 

2020

 

2019

Revenue

 

$

                                 -

$

-

Cost of goods sold

 

-

 

-

Gross Profit

 

-

 

-

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

Work Program & Technical

 

38,000

 

-

Legal & Professional

 

22,192

 

-

Website design & Development

 

778

 

-

General and Administrative Expenses

 

25,691

 

-

TOTAL OPERATING EXPENSES

 

86,661

 

-

 

 

 

 

 

LOSS FROM CONTINUING OPERATIONS

 

(86,661)

 

-

LOSS FROM DISCONTINUED OPERATIONS

 

-

 

(17,213)

LOSS FROM OPERATIONS

$

(86,661)

$

(17,213)

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

-

 

-

 

 

 

 

 

NET LOSS

$

(86,661)

$

(17,213)

 

 

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

$

(0.00)

$

(0.00)

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

55,701,818

 

52,800,000

 

 

 

 

 

 

 

 

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

 

 

 

5

 

 

 

 

Venture Vanadium Inc.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three months ended January 31, 2020 and 2019

(Unaudited)

 

 

 

 

 

Common Stock

 

Additional Paid-in

 

Discount on common stock

 

Accumulated Deficit

 

Total Stockholders’

 

Shares

Amount

 

Capital

 

 

 

 

 

Equity

Balance, October 31, 2018

53,280,000

$

53,280

$

-

$

(21,800)

$

(38,487)

$

(7,007)

Shares issued for cash

-

 

-

 

-

 

-

 

-

 

-

Net loss

-

 

-

 

-

 

-

 

(17,214)

 

(17,214)

Balance, January 31, 2019

53,280,000

$

53,280

$

27,040

$

(21,800)

$

(55,701)

$

(24,221)

Shares issued for cash

-

 

-

 

-

 

-

 

-

 

-

Net loss

-

 

-

 

-

 

-

 

(12,393)

 

(12,393)

Balance, April 30, 2019

53,280,000

$

53,280

$

-

$

(21,800)

$

(68,094)

$

(36,614)

Shares issued for non-cash consideration

1,150,000

 

1,150

 

36,741

 

 

 

-

 

37,891

-

Net loss

-

 

-

 

-

 

-

 

(59,808)

 

(59,808)

Balance, July 31, 2019

54,430,000

$

54,430

$

36,741

$

(21,800)

$

(127,902)

$

(58,531)

Shares issued for cash

367,470

 

367

 

249,633

 

-

 

-

 

250,000

Shares issued for non-cash consideration

150,000

 

150

 

58,750

 

 

 

-

 

58,900

-

Net loss

-

 

-

 

-

 

-

 

(95,789)

 

(95,789)

Balance, October 31, 2019

54,947,470

$

   54,947

$

345,124

$

(21,800)

$

    (223,691)

$

154,580

Shares issued for cash

-

 

-

 

-

 

-

 

-

 

-

Shares issued for non-cash consideration for license acquistions

1,000,000

 

 

 

1,000

 

799,000

 

 

 

-

 

800,000

 

 

 

 

 

 

 

-

 

 

Shares issued for non-cash consideration to a senior consultant

100,000

 

100

 

104,900

 

 

 

-

 

105,000

 

 

 

 

 

 

 

 

 

-

 

 

Net loss

-

 

-

 

-

 

-

 

(86,661)

 

(86,661)

Balance, January 31, 2020

56,047,470

$

56,047

$

1,249,024

$

(21,800)

$

(310,352)

$

972,919

 

 

 

 

 

 

 

 

 

 

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

 

 

6

 

 

Venture Vanadium Inc.

STATEMENTS OF CASH FLOWS

Three months ended January 31, 2020 and 2019

(Unaudited)

 

 

Three Months Ended January 31,

 

 

2020

 

2019

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss – continuing operations

 

              (86,661)

 

-

Stock based compensation

 

35,000

 

-

Adjustments to reconcile net loss to net cash (used in) operating activities:

 

 

 

 

Accounts payable and accrued expenses

 

(15,546)

 

-

CASH FLOWS USED IN OPERATING ACTIVITIES OF CONTINUING OPERATIONS

 

(67,207)

 

-

CASH FLOWS USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS

 

-

 

 

(16,062)

CASH FLOWS USED IN OPERATING ACTIVITIES

 

(67,207)

 

(16,062)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Disposal of Fixed Assets

 

-

 

-

Purchase of Fixed Assets

 

(105,000)

 

-

Payment of rent deposits

 

-

 

-

Retired property

 

-

 

-

CASH FLOWS PROVIDED/(USED) IN INVESTING ACTIVITIES OF CONTINUING OPERATIONS

 

(105,000)

 

-

CASH FLOWS PROVIDED/(USED) IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS

 

 

 

 

7,253

CASH FLOWS PROVIDED/(USED) IN INVESTING ACTIVITIES

 

 

 

 

(105,000)

7,253

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from sale of common stock

 

 

-

 

 

-

Related party loans

 

(5,000)

 

-

CASH FLOWS PROVIDED/(USED) BY FINANCING ACTIVITIES OF CONTINUING OPERATIONS

 

(5,000)

 

 

-

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS

 

-

 

 

6,000

CASH FLOWS PROVIDED/USED BY FINANCING ACTIVITIES

 

(5,000)

 

 

6,000

 

 

 

 

 

NET DECREASE IN CASH

 

(177,207)

 

(2,809)

 

 

 

 

 

Cash, beginning of period

 

184,939

 

5,719

 

 

 

 

 

Cash, end of period

$

7,732

$

2,910

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

Interest paid

$

                        -

$

-

Income taxes paid

$

                        -

$

-

NON CASH ACTIVITY:

 

 

 

 

Shares issued as prepaid expenses 

$

70,000

$

-

 

 

 

 

 

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

 

 

 

7

 

 

 

Venture Vanadium Inc.

(Formerly Aura Energy Inc.)

NOTES TO THE FINANCIAL STATEMENTS

January 31, 2020

(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.) 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 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. 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. 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 U.S. 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, 2019 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 three months ended January 31, 2020. 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 SIGNIFICANT 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

 

 

8

 

 

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 for the three months to January 31, 2020.

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.

 

Stock-based compensation

In June 2018, the FASB issued ASU No. 2018-07, "Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting", an update that expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance was adopted by Venture Vanadium Inc for the financial year ended October 31, 2019. There was no material effect on the financial statements as a result of this adoption.

 

Revenue Recognition 

The Company recognizes revenue in accordance with Accounting Standards Codification 606, “Revenue from Contracts with Customers”. ASC 606 adoption is on February 1, 2018. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Specifically, Section 606-10-50 requires an entity to provide information about: a. Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; b. Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities; c. Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; d. Significant judgments, and changes in judgments, made in applying the requirements to those contracts.

 

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 January 31, 2020 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

 

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

 

 

9

 

 

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. This transaction is reflected in the financial statements to January 31, 2020 and have been capitalized in accordance with the company’s accounting policy noted in note 2 above.

 

Note 7 – DISCONTINUED OPERATIONS

 

Further to the company entering into the Split-Off Agreement dated May 29, 2019, pursuant to current accounting guidelines, the business component relating to the assets and liabilities taken over is reported as a discontinued operations. 

 

Note 8 – INCOME/(LOSS) PER SHARE

Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income (loss) of the Company. In computing diluted income (loss) per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants may have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants. As of January 31, 2020 and 2019, there were no outstanding warrants or options.

 

The following table sets forth the computation of basic and diluted earnings per share:

 

 

 

For the three months ended  
January 31,

 

 

2020

 

 

2019

Earnings per share – Basic and Diluted

 

 

 

 

 

 

 

Income (Loss) for the period

 

$

(86,661)

 

 

$

(17,213)

Basic average common stock outstanding - Basic and Diluted

 

 

55,701,818

 

 

 

53,280,000

Net earnings per share – Basic and Diluted

 

$

(0.00)

 

 

$

(0.00)

 

Note 9 - RECENT SALES OF UNREGISTERED SECURITIES

 

We have 75,000,000, $0.001 par value shares of common stock authorized.

 

In June 2019, we issued 1,100,000 shares of common stock at $0.05 per share to the Optionor under the terms of the option agreement to acquire exploration rights over 30 mineral claims (The Desgrosbois Property) as modified.

 

In June 2019, we issued 50,000 shares of common stock at $0.05 per share to a director under the terms of the assignment of the option agreement to acquire exploration rights over 30 mineral claims (The Desgrosbois Property).

 

In October 2019, we issued 162,272 shares of common stock for cash proceeds of $100,000 at approximately $0.61625 per share.

 

In October 2019, we issued 205,198 shares of common stock for cash proceeds of $150,000 at approximately $0.731 per share.

 

In October 2019, we issued 100,000 shares of common stock at $0.01 to a senior geologist under the terms of his consultancy agreement entered into on January 1, 2019 with us.

 

In October 2019, we issued 50,000 shares of common stock at $0.05 to a director under the terms of the assignment of the option agreement to acquire exploration rights over 30 mineral claims (The Desgrosbois Property).

 

In November 2019, we issued 1,000,000 shares of common stock in connection with the acquisition of the titles in the Desgrosbois Property.

 

 

 

10

 

 

 

 

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.

 

 

 

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 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

 

 

 

13

 

 

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

 

ITEM 1.

LEGAL PROCEEDINGS

 

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.

 

ITEM 1A.

RISK FACTORS

 

Not applicable.

 

 

 

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ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

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.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4.

MINE SAFETY 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 March 06, 2020.

  

  

Venture Vanadium Inc.

  

  

  

  

By:

/s/

Ian Ilsley

  

  

  

Name:

Ian Ilsley

  

  

  

Title:

President, Treasurer, Secretary and Director

  

  

  

(Principal Executive, Financial and Accounting Officer)

 

 

 

 

15

 


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