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 fiscal year ended October 31, 2020, filed with the U.S. Securities and
Exchange Commission (the "SEC") on March 22, 2021, 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 Statements
Statements made in this Quarterly Report on Form 10-Q (this "Quarterly Report")
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, as amended (the "Act"), and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). 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
Diamond Holdings, Inc. (formerly known as Venture Vanadium Inc.) (the "Company,"
"we," "us" or "our"), was incorporated under the laws of the State of Nevada on
September 26, 2016 under the name of "Arcom," and subsequently as Aura Energy,
Inc. The Company currently has two officers and directors who are Jewell Sumrall
and Stephanie Flood. The Company was formerly engaged in the production of
wood-manufactured bow ties in China, Hunan Province. This activity ceased. On
June 12, 2019, the Company entered into an Assignment Agreement (the "Assignment
Agreement") with Ian Ilsley to assign his rights and obligations under an Option
Agreement to acquire exploration rights over 30 mineral claims (The Desgrosbois
Vanadium/Titanium Property) representing 1,789.80 hectares (4,422.69 acres)
situated in Quebec, Canada.
Under the terms of the Assignment Agreement, we issued 25,000 shares of our
common stock, $0.001 par value per share (the "Common Stock") to Ian Ilsley, our
former officer and director, on June 21, 2019 and a further 25,000 shares of our
Common Stock, ninety days thereafter in consideration of him having entered into
the Assignment Agreement.
Under the terms of the Option Agreement, payments totalling $65,000 were made to
the Optionor and 575,000 shares of the Company's Common Stock were issued to the
Optionor. On November 22, 2019, Mr. Ilsley, our Company and Mr. Yacoub entered
into the Amended and Restated Desgrosbois Option Agreement whereby certain terms
of the original agreement were amended (the "Amended and Restated Agreement").
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
500,000 shares of the Company's Common Stock and a two percent (2.0%) Net
Smelter Return on all metals extracted from the property. These transactions are
reflected in the Company's financial statements as of April 30, 2021.
On April 30, 2021 (the "Effective Date"), Mr. Sumrall and Ms. Flood collectively
purchased in a private transaction 38,590,000 shares of the Company's Common
Stock from Mr. Ilsley. The shares constituted 68.9% of our issued and
outstanding shares of Common Stock as of such date. In connection with the sale
of the shares, effective as of the Effective Date, Mr. Ilsley resigned from all
of his positions with our Company, and Mr. Sumrall was appointed as our Chief
Executive Officer, Acting Chief Financial Officer, Secretary and Treasurer, Ms.
Flood was appointed as our President, and each of Mr. Sumrall and Ms. Flood were
each elected as a member of our Board of Directors.
On August 16, 2021, the Company effected a name change to "Diamond Holdings,
Inc." and a one-for-two (1:2) reverse stock split (the "Reverse Stock Split")
whereby the Company decreased by a ratio of one-for-two (1:2) the number of
shares of its Common Stock issued and outstanding. All share and per-share data
and amounts in this Quarterly Report have been retroactively adjusted as of the
earliest period presented in the financial statements to reflect the Reverse
Stock Split.
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 our Common Stock from 2,220,000 to 26,640,000. Unless
otherwise noted, all share amounts provided in this Quarterly Report reflect
such forward stock split.
Our assets comprise a 100% interest in over 30 mineral claims (The Desgrosbois
Vanadium/Titanium Property) representing 1,789.80 hectares (4,422.69 acres)
situated in Quebec, Canada.
On August 16, 2021, the Company effected a name change to Diamond Holdings, Inc.
and the Reverse Stock Split whereby the Company decreased by a ratio of
one-for-two (1:2) the number of its issued and outstanding shares of Common
Stock.
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.
11
Employees and Employment Agreements
We have no employees, except our officers and directors Mr. Sumrall and Ms.
Flood, as of the date of this Quarterly Report. We have no employment agreement
with Mr. Sumrall and Ms. Flood. Our officers and directors expect to devote such
time to our Company matters as our business currently dictates. 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 our equity and/or debt securities.
Revenue and cost of goods sold
For both the three- and nine-month periods ended July 31, 2021 and 2020, we
reported no revenue.
Operating expenses
Total operating expenses for the three-month period ended July 31, 2021 were
$59,833 and the total operating expenses for the three-month period ended July
31, 2020 were $67,808. The total operating expenses for the nine months ended
July 31, 2021 and 2020 were $72,839 and $339,600, respectively. The operating
expenses for the nine-month period ended July 31, 2021 included audit fees of
$13,000, regulatory & filing fees of $4,668, web services and news releases of
$100 and general and administrative expenses of $21. The decrease in total
operating expenses for each period reflects the impact of the COVID-19 pandemic
on our operations.
Net Loss
The net profit for the three-month period ended July 31, 2021 was $60,167, as
compared to the net loss for the three-month period ended July 31, 2020 of
$67,808, primarily driven by the inclusion of gains on settlements reached with
creditors during the three-month period ended July 31, 2021. The net profit for
the nine-month period ended July 31, 2021 was $117,232, as compared to a net
loss for the nine-month period ended July 31, 2020 of $339,600, again reflecting
the gains achieved on settlements with creditors.
Liquidity and Capital Resources
As of July 31, 2021, our total assets were $1,030,110, as compared to $1,030,071
as of October 31, 2020.
As of July 31, 2021, our current liabilities were $241,743 and stockholder's
equity was $788,367.
Cash Flows from Operating Activities
For the nine-month period ended July 31, 2021, net cash flows used by our
operating activities was $86,365, as compared to net cash outflow of ($76,422)
for the nine-month period ended July 31, 2020. The limited cash flows reflect
the impact of the COVID-19 on our operations after adjusting for gains on
settlements agreed with creditors.
Cash Flows from Investing Activities
For the nine-month period ended July 31, 2021, there were no cash flows from our
investing activities. This compares with cash outflows from investing activities
in the corresponding period ending July 31, 2020 of $105,000 relating to the
acquisition of the title to the 30 Desgrosbois Property claims which were
previously under option to our company.
Cash Flows from Financing Activities
For the nine-month period ended July 31, 2021, we recorded cash inflows of
$86,344 relating to an increase in related party loans and a further $60
relating to the issuance of shares. This compares to a reduction in related
party loans of $3,350 in the corresponding period to July 31, 2020.
12
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 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, 2020, 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.
© Edgar Online, source Glimpses