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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q


[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended: July 31, 2013


[    ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______to_______


Commission File Number 000-54800


VENZA GOLD CORP.

(Exact name of registrant as specified in its charter)

 

British Columbia, Canada

(State or other jurisdiction

of incorporation or organization)

99-0364150

(I.R.S. Employer

Identification No.)

 

810-789 West Pender Street, Vancouver, BC, V6C 1H2

(Address of principal executive offices) (Zip Code)

 

(604) 787-2811

(Registrant’s telephone number, including area code)


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.  [X] Yes    [   ] No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[X] Yes    [   ] 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 filed,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[  ]

(Do not check if a smaller reporting company)

Smaller reporting company

[  ]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [   ] Yes    [X] No


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of September 10, 2013 the number of shares of the registrant’s common stock outstanding was 6,916,661.





 


TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

1

ITEM 1.  FINANCIAL STATEMENTS.

1

BALANCE SHEETS

  1

STATEMENTS OF OPERATIONS

2

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

3

STATEMENTS OF CASH FLOWS

4

NOTES TO THE FINANCIAL STATEMENTS

5

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

6

ITEM 4.  CONTROLS AND PROCEDURES.

10

PART II - OTHER INFORMATION

12

ITEM 1.  LEGAL PROCEEDINGS.

12

ITEM 1A.  RISK FACTORS.

12

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

18

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

18

ITEM 4.  MINE SAFETY DISCLOSURES

18

ITEM 5.  OTHER INFORMATION.

18

ITEM 6.  EXHIBITS.

18




















2




PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements.


VENZA GOLD CORP.

(AN EXPLORATION STAGE COMPANY)

BALANCE SHEETS

EXPRESSED IN US DOLLARS


 

July 31, 2013

 

October 31, 2012

 

(unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

Cash

$

2,728

 

$

117,120

HST recoverable

 

2,462

 

 

2,019

Prepaids

 

2,051

 

 

1,114

 

 

7,241

 

 

120,253

 

 

 

 

 

 

Unproved mineral property

 

15,000

 

 

15,000

 

$

22,241

 

$

135,253

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

$

30,181

 

$

38,556

 

 

30,181

 

 

38,556

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

 

Common stock, no par value, unlimited authorized

 

 

 

 

 

6,916,661 issued and outstanding at

 

 

 

 

 

July 31, 2013 and October 31, 2012

 

472,000

 

 

472,000

Additional paid in capital

 

(26,208)

 

 

(27,180)

Comprehensive loss

 

(756)

 

 

-

Deficit

 

(452,976)

 

 

(348,123)

 

 

(7,940)

 

 

96,697

 

$

22,241

 

$

135,253










The accompanying notes are an integral part of these financial statements




1



VENZA GOLD CORP.

 (AN EXPLORATION STAGE COMPANY)

STATEMENTS OF OPERATIONS

(UNAUDITED)


 

 

 

 

 

From August 4, 2010

 

Three months ended

 

Nine months ended

 

(Inception) to

 

July 31, 2013

 

July 31, 2012

 

July 31, 2013

 

July 31, 2012

 

July 31, 2013

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Administration

$

953

 

$

985

 

$

3,453

 

$

1,773

 

$

12,661

Accounting

 

2,523

 

 

14,201

 

 

5,633

 

 

18,388

 

 

39,144

Bank charges

 

312

 

 

319

 

 

477

 

 

386

 

 

1,475

Consulting

 

6,006

 

 

4,122

 

 

18,385

 

 

25,988

 

 

93,031

Corporate communications

 

500

 

 

-

 

 

500

 

 

-

 

 

500

Management fees

 

7,215

 

 

3,000

 

 

20,715

 

 

60,718

 

 

182,285

Mineral exploration

 

9,837

 

 

7,000

 

 

11,837

 

 

10,000

 

 

21,837

Office

 

3,917

 

 

4,736

 

 

10,370

 

 

7,372

 

 

24,652

Professional fees

 

3,843

 

 

1,114

 

 

9,243

 

 

35,433

 

 

77,473

Regulatory and filing

 

918

 

 

5,480

 

 

22,274

 

 

7,310

 

 

37,451

Travel and entertainment

 

1,045

 

 

-

 

 

1,045

 

 

-

 

 

4,035

Foreign exchange

 

(134)

 

 

422

 

 

921

 

 

350

 

 

650

Loss before other items

 

(36,935)

 

 

(41,379)

 

 

(104,853)

 

 

(167,718)

 

 

(495,194)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

-

 

 

4,293

 

 

-

 

 

18,180

 

 

42,218

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(36,935)

 

$

(37,086)

 

$

(104,853)

 

$

(149,538)

 

$

(452,976)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share - basic and diluted

$

0.01

 

$

0.01

 

$

0.02

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

6,919,661

 

 

4,884,362

 

 

6,919,661

 

 

4,889,274

 

 

 







The accompanying notes are an integral part of these financial statements




2



VENZA GOLD CORP.

 (AN EXPLORATION STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' DEFICIT

(UNAUDITED)


 

 

Common Stock Issued

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Number of

 

 

 

Stock

 

Paid-in

 

Comprehensive

 

Accumulated

 

 

 

 

Shares

 

Amount

 

Subscribed

 

Capital

 

Loss

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at August 4, 2010

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash

1,750,000

 

 

51,500

 

 

-

 

 

-

 

 

-

 

 

-

 

 

51,500

 

Obligation to issue shares

-

 

 

-

 

 

38,250

 

 

-

 

 

-

 

 

-

 

 

38,250

 

Discount on notes receivable

-

 

 

-

 

 

-

 

 

(13,995)

 

 

-

 

 

-

 

 

(13,995)

 

Net loss

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(26,827)

 

 

(26,827)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at October 31, 2010

1,750,000

 

 

51,500

 

 

38,250

 

 

(13,995)

 

 

-

 

 

(26,827)

 

 

48,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash

1,793,328

 

 

167,500

 

 

(38,250)

 

 

-

 

 

-

 

 

-

 

 

129,250

 

Obligation to issue shares

-

 

 

-

 

 

41,250

 

 

-

 

 

-

 

 

-

 

 

41,250

 

Discount on notes receivable

-

 

 

-

 

 

-

 

 

(13,185)

 

 

-

 

 

 

 

 

(13,185)

 

Net loss

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(124,975)

 

 

(124,975)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at October 31, 2011

3,543,328

 

 

219,000

 

 

41,250

 

 

(27,180)

 

 

-

 

 

(151,802)

 

 

81,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued

550,000

 

 

41,250

 

 

(41,250)

 

 

-

 

 

-

 

 

-

 

 

-

 

Common stock issued for debt

2,273,333

 

 

170,500

 

 

-

 

 

-

 

 

-

 

 

-

 

 

170,500

 

Common stock issued for asset

200,000

 

 

15,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

15,000

 

Common stock issued for services

350,000

 

 

26,250

 

 

-

 

 

-

 

 

-

 

 

-

 

 

26,250

 

Net loss

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(196,321)

 

 

(196,321)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at October 31, 2012

6,916,661

 

 

472,000

 

 

-

 

 

(27,180)

 

 

-

 

 

(348,123)

 

 

96,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donated services

-

 

 

-

 

 

-

 

 

972

 

 

-

 

 

-

 

 

972

 

Net loss

-

 

 

-

 

 

-

 

 

-

 

 

(756)

 

 

(104,853)

 

 

(105,609)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at July 31, 2013

6,916,661

 

$

472,000

 

$

-

 

$

(26,208)

 

$

(756)

 

$

(452,976)

 

$

(7,940)


The accompanying notes are an integral part of these financial statements




3



VENZA GOLD CORP.

 (AN EXPLORATION STAGE COMPANY)

STATEMENTS OF CASH FLOWS

 (UNAUDITED)


 

Nine months ended

 

From August 4, 2010

(inception) to

July 31, 2013

 

July 31, 2013

 

July 31, 2012

 

 

Cash flow used in operating activities:

 

 

 

 

 

Net loss

$

(104,853)

 

$

(149,538)

 

$

(452,976)

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

 

 

 

 

 

 

 

 

Interest income

 

-

 

 

(18,180)

 

 

(42,218)

Consulting fees

 

-

 

 

26,250

 

 

26,250

Donated services

 

972

 

 

-

 

 

972

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

HST recoverable

 

(443)

 

 

(5,291.00)

 

 

(2,462)

Prepaids

 

(937)

 

 

(587)

 

 

(2,051)

Accounts payable

 

8,882

 

 

32,413

 

 

78,938

Due to related parties

 

(17,257)

 

 

25,000

 

 

121,743

Net cash used in operating activities

 

(113,636)

 

 

(89,933)

 

 

(271,804)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

-

Notes receivable, net of allowance

 

-

 

 

210,038

 

 

15,038

Net cash provided by investing activities

 

-

 

 

210,038

 

 

15,038

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Shares issued

 

-

 

 

-

 

 

260,250

Net cash provided by financing activities

 

-

 

 

-

 

 

260,250

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(756)

 

 

 

 

 

(756)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash during the period

 

(114,392)

 

 

120,105

 

 

2,728

 

 

 

 

 

 

 

 

 

Cash, beginning

 

117,120

 

 

21,960

 

 

-

 

 

 

 

 

 

 

 

 

Cash, ending

$

2,728

 

$

142,065

 

$

2,728

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period

 

 

 

 

 

 

 

 

Taxes

$

-

 

$

-

 

$

-

Interest

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

Non-cash transactions

 

 

 

 

 

 

 

 

Shares issued for mineral properties

$

-

 

$

15,000

 

$

15,000

Shares issued for settlement of debt

$

-

 

$

170,500

 

$

170,500



The accompanying notes are an integral part of these financial statements




4



VENZA GOLD CORP.

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

JULY 31, 2013

 (UNAUDITED)


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

Nature of Operations

Venza Gold Corp.’s (the “Company”) principal business is the acquisition and exploration of mineral resources in British Columbia, Canada. The Company has not determined whether its properties contain mineral reserves that are economically recoverable.  

 

The unaudited interim financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended October 31, 2012, included in the Company’s annual report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those financial statements for the year ended October 31, 2012 included in the Company’s annual report on Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and nine months ended July 31, 2013 are not necessarily indicative of the results that may be expected for the year ending October 31, 2013.


Recent Accounting Pronouncements

The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. It does not expect the adoption of these pronouncements to have a material impact on its financial position, results of operations or cash flows.


NOTE 2 - RELATED-PARTY TRANSACTIONS


During the nine months ended July 31, 2013, the Company incurred $17,755 (July 31, 2012- $58,500) in management fees to a former director of the Company and $11,837 (July 31, 2012- $10,000) in exploration expenditures to its director.


NOTE 3 - UNPROVED MINERAL PROPERTIES


On April 11, 2012, the Company acquired two mineral claims located in British Columbia from one of its directors through the issuance of 200,000 shares of its common stock at a fair value of $15,000. In order to keep the claims in good standing the Company is required to incur exploration expenses of approximately $2,754 per year for the next two years and $5,508 per year thereafter. As of the date of these financial statements, the Company has incurred enough exploration expenditures to keep the claims in good standing until 2018, and will not be required to make additional cash payments in lieu of exploration work.

 

NOTE 4 - SUBSEQUENT EVENTS


On August 15, 2013, the Company staked two additional claims to cover southern extension of the property for a total of $297. To keep the claims in good standing, the Company is commitments to pay $678 in lieu of work during the first three years and $1,356 thereafter.  


On August 31, 2013, the Company signed a letter of intent to acquire all issued and outstanding shares of Core-Comm Holdings Inc. (“Core-Comm”), a private company registered under the laws of British Columbia. Core-Comm is in the process of developing portals to serve the research requirements of English and Spanish education users. Under the proposed terms of the transaction, the Company will issue one common share for each common share of Core-Comm.  In addition, the current director of the Company will resign and be replaced with nominees of Core-Comm.  Following closing of the transaction, the Company will undergo the name change. The non-binding letter of intent is subject to the entry into a definitive agreement by September 30, 2013. There is no assurance that a definitive agreement will be concluded or that the terms will not change from those described above.  



5



Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements


This Quarterly Report on Form 10-Q filed by Venza Gold Corp. contains forward-looking statements. These are statements regarding financial and operating performance and results and other statements that are not historical facts. The words “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “forecast,” and similar expressions are intended to identify forward-looking statements. Certain important risks could cause results to differ materially from those anticipated by some of the forward-looking statements. Some, but not all, of these risks include, among other things:


general economic conditions, because they may affect our ability to raise money

our ability to raise enough money to continue our operations

changes in regulatory requirements that adversely affect our business

changes in the prices for minerals that adversely affect our business

other uncertainties, all of which are difficult to predict and many of which are beyond our control


We caution you not to place undue reliance on these forward-looking statements, which reflect our management’s view only as of the date of this report. We are not obligated to update these statements or publicly release the results of any revisions to them to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. You should refer to, and carefully review, the information in future documents we file with the United States Securities and Exchange Commission (the “SEC”).


General


You should read this discussion and analysis in conjunction with our interim unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the fiscal year ended October 31, 2012 included in our Annual Report on Form 10-K. The inclusion of supplementary analytical and related information may require us to make estimates and assumptions to enable us to fairly present, in all material respects, our analysis of trends and expectations with respect to our results of operations and financial position taken as a whole. Actual results may vary from the estimates and assumptions we make.


Overview


We were incorporated on August 4, 2010 under the laws of the State of Nevada under the name “SOS Link Corporation”.  On April 15, 2011, we changed our place of incorporation from the State of Nevada to the Province of British Columbia, Canada and concurrently changed our name to “Venza Gold Corp.”  The change from Nevada to British Columbia was approved by our shareholders on April 14, 2011.


We are an exploration stage company engaged in the acquisition and exploration of mineral properties.  We currently hold a 100% interest in the OS Gold Claim and the Quad Gold Claim.  The OS Gold Claim, being our lead mineral project, is comprised of three mineral claims totaling 1,711.3 acres located approximately 7 kilometres west of Osoyoos, British Columbia, Canada.  The Quad Gold Claim is comprised of one mineral claim totaling 408.9 acres and is located approximately 16 kilometres north of Campbell River, British Columbia, Canada.  We plan to focus our resources on the OS Gold Claim in order to assess whether it possesses mineral deposits capable of commercial extraction.  See “Plan of Operation” below.


To date, we have not earned any revenues from our main operations and do not anticipate earning revenues until such time as we enter into commercial production of our properties.  We are presently in the exploration stage of our business and we can provide no assurance that commercially viable minerals exist on our properties or that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.





6




Recent Corporate Developments


1.

On July 26, 2013, Ralph Biggar resigned as our President, Chief Financial Officer, and Director.  Mr. Biggar’s resignation was not due to, and was not been caused by, in whole or in part, any disagreement with the Company, whether related to the Company’s operations, policies, practices or otherwise. Following Mr. Biggar’s resignation, we appointed Gerald Diakow as our President and Chief Financial Officer.  Mr. Diakow is currently our sole director.


2.

On August 22, 2013, we announced the results of our soil geochemical survey on the Os Gold Claim.  See “Plan of Operation - Phase II Exploration Program”.


3.

On August 31, 2013, we signed a letter of intent to acquire all issued and outstanding shares of Core-Comm Holdings Inc. (“Core-Comm”), a private company registered under the laws of British Columbia. Core-Comm is in the process of developing portals to serve the research requirements of English and Spanish education users. Under the proposed terms of the transaction, we will issue one common share for each common share of Core-Comm.  In addition, Gerry Diakow will resign and be replaced with nominees of Core-Comm.  Following closing of the transaction, we will change our name to “Core-Comm Holdings Inc.” or such other name as agreed to by us and Core-Comm. The non-binding letter of intent is subject to the entry into a definitive agreement by September 30, 2013. There is no assurance that a definitive agreement will be concluded or that the terms will not change from those described above.


Plan of Operation


Our plan of operation is to conduct mineral exploration activities on the OS Gold Claim in order to assess whether the property contains mineral reserves capable of commercial extraction. Our exploration program is designed to explore for commercially viable deposits of gold. We have not, nor has any predecessor, identified any commercially exploitable reserves of these minerals on the OS Gold Claim.


Phase 1 Exploration Program


In April 2012 we initiated our exploration program on the OS Gold Claim by conducting a geochemical soil sampling program on the north east area of the claim block with the intent to relocate the area of the historic Pass mineral showing.  The survey collected 57 soil samples which were analyzed for 36 elements at ACME Analytical Laboratories in Vancouver, BC.


The geochemical survey was successful in delineating both copper and gold anomalies on the OS Gold Claim. The copper values from soil samples show a geochemical anomaly covering the eastern third of the grid area. This zone starts at the most north-eastern sample collected on the grid and extends south 800 meters (2600 feet). The copper anomaly is open along the eastern boundary of the grid area.


Anomalous gold samples from the geochemical soil survey were collected in the vicinity of the location of the Pass showing. This anomaly is also open to the east and further geochemical surveying east ward may enlarge this anomaly.


The geochemical soil survey was successful in locating the probable area of the British Columbia Ministry of Energy (Minfile No. 082ESW111) Pass Showing.  The survey also revealed a larger area of interest.


Phase II Exploration Program


During June - July 2013, we carried out second phase of our exploration program. Soil geochemical survey carried out during this phase has enlarged the original copper anomaly from the initial 2012 geochemical survey southward and eastward to the boundaries of the survey area. Three  plus 80 parts per million copper anomalies with the maximum value of 201.3 ppm were discovered along the eastern boundary of the survey area and extending approximately 150 meters in an East-West direction and 800 meters in a North-South direction. The anomalies are open to the east. The copper soil anomalies are believed to be located east and south of the historic Pass mineral showing (Minfile 082ESW111). Scattered plus 20 parts per billion gold values with the maximum value of 56.2 ppb were associated with the copper anomalies. The survey collected 78 soil samples which were analyzed for 36 elements at ACME Analytical Laboratories in Vancouver, BC.



7



In Fall 2013, to conclude our Phase I and II exploration programs, we are planning to carry out a detailed mapping program based on the results of the geochemical surveys. We estimate that this program will cost approximately $6,600 and will be finalized by October 31, 2013.


As of July 31, 2013, we had cash on hand of $2,728 and accounts receivable of $2,462.  In order to continue with our exploration program and carry out the planned detailed mapping program, we require additional financing. We are planning to raise necessary capital through equity or debt financing.


Results of Operation


Our operating results for the nine and three months ended July 31, 2013 and 2012 and the changes in the operating results between those periods are summarized in the table below.


Three and Nine Months Summary


 

Three Months Ended

July 31,

Percentage

Nine Months Ended

July 31,

Percentage

 

2013

2012

Decrease

2013

2012

Decrease

Revenue

$

-

$

-

n/a

$

-

$

-

n/a

Expenses

 

(36,935)

 

(41,379)

(10.74%)

 

(104,853)

 

(167,718)

(37.48)%

Interest Income

 

-

 

4,293

(100)%

 

-

 

18,180

(100)%

Net Loss

$

(36,935)

$

(37,086)

(0.41)%

$

(104,853)

$

(149,538)

(29.88)%


Revenues


We only earned interest income during the three and nine months ended July 31, 2012 and do not anticipate earning revenues from business operations until such time as we enter into commercial production of our mineral properties. There can be no assurance that we will be successful in discovering commercial quantities or that we can commercially produce metals or minerals. We are presently an exploration stage company engaged in the search for mineral reserves. We can provide no assurance that we will be able to discover any commercially exploitable levels of mineral resources on our property, or, even if such resources are discovered, that we will be able to enter into commercial production of our mineral properties.


Operating Expenses


Our operating expenses for the three and nine months ended July 31, 2013 and 2012 consisted of the following:

 

Three Months Ended

July 31,

Percentage

Increase /

Nine Months Ended

July 31,

Percentage

Increase /

 

2013

2012

(Decrease)

2013

2012

(Decrease)

Administration

$

953

$

985

(3.25)%

$

3,453

$

1,773

94.75%

Accounting

 

2,523

 

14,201

(82.23)%

 

5,633

 

18,388

(69.37)%

Bank charges

 

312

 

319

(2.19)%

 

477

 

386

23.58%

Consulting

 

6,006

 

4,122

45.71%

 

18,385

 

25,988

(29.26)%

Corporate communications

 

500

 

-

n/a

 

500

 

-

n/a

Management fees

 

7,215

 

3,000

140.50%

 

20,715

 

60,718

(65.88)%

Mineral exploration

 

9,837

 

7,000

40.53%

 

11,837

 

10,000

18.37%

Office

 

3,917

 

4,736

(17.29)%

 

10,370

 

7,372

40.67%

Professional fees

 

3,843

 

1,114

244.97%

 

9,243

 

35,433

(73.91)%

Regulatory and filing

 

918

 

5,480

(83.25)%

 

22,274

 

7,310

204.71%

Travel and entertainment

 

1,045

 

-

n/a

 

1,045

 

-

n/a

Foreign exchange (gain)

 

(134)

 

422

(131.75)%

 

921

 

350

163.14%

Total expenses

$

36,935

$

41,379

(10.74)%

$

104,853

$

167,718

(37.48)%




8




During the nine months ended July 31, 2013 our expenses decreased from $167,718 to $104,853 or 37.48%.  

The most significant changes are listed below:


·

Consulting expenses decreased by $7,603 or 29.26%, professional fees decreased by $26,190 or 73.91% and accounting fees decreased by $12,755 or 69.37% due to higher compliance costs during the nine months ended July 31, 2012, associated with the preparation of audited financial statements for our fiscal year ended October 31, 2011 and interim unaudited financial statements included in our Registration Statement on Form S-1.


·

Regulatory fees increased by $14,964 or 204.71% during the nine months ended July 31, 2013 mainly due to the public reporting costs, which did not exist in prior year.


·

Management fees decreased during the nine months ended July 31, 2013 by $40,003 or 65.88% due to lower fees charged by a Director.


Liquidity and Capital Resources


Working Capital


 

At  July 31,

2013

At October 31,

2012

Current assets

$

7,241

$

120,253

Current liabilities

 

30,181

 

38,556

Working capital surplus (deficit)

$

(22,940)

$

81,697


Cash Flows


 

Nine  Months Ended July 31,

 

2013

2012

Net cash used in operating activities

$

(113,636)

$

(89,933)

Net cash provided by investing activities

 

-

 

210,038

Net cash from financing activities

 

-

 

-

Effect of exchange rate changes on cash

 

(756)

 

-

Net increase (decrease) in cash during period

$

(114,392)

$

120,105


Our working capital surplus decreased from $81,697, as at October 31, 2012, to a deficit of $22,940, as at July 31, 2013. The decrease in working capital resulted from a decrease in cash due to the exploration campaign we undertook during June and July of 2013, as well as costs associated with maintaining our daily operations. In addition, we had no sources of revenue during the period to supplement the expenditures.


Capital resource


Our ability to explore our mineral claims is subject to our ability to obtain the necessary funding.  We expect to raise funds through sales of our debt or equity securities. We have no committed sources of capital.  If we are unable to raise funds as and when we need them, we may be required to curtail, or even to cease, our operations.


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 that is material to shareholders.  





9




Critical Accounting Policies


The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.  


The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies.  As an “emerging growth company,” we may, under Section 7(a)(2)(B) of the Securities Act, delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. We may take advantage of this extended transition period until the first to occur of the date that we (i) are no longer an "emerging growth company" or (ii) affirmatively and irrevocably opt out of this extended transition period. 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. Until the date that we are no longer an "emerging growth company" or affirmatively and irrevocably opt out of the exemption provided by Securities Act Section 7(a)(2)(B), upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.


Our significant accounting policies are disclosed in the notes to the audited financial statements for the year ended October 31, 2012. The following accounting policies have been determined by our management to be the most important to the portrayal of our financial condition and results of operation:


Mineral Properties


We classify our mineral rights as tangible assets and accordingly acquisition costs are capitalized as mineral property costs. Mineral exploration costs are expensed as incurred until commercially mineable deposits are determined to exist within a particular property.


When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.


Foreign Currency Translation and Transaction


Our functional currency is the Canadian dollar and reporting currency is the United States dollar.  We translate assets and liabilities to US dollars using the rates of exchange prevailing at the reporting date, translate unproved mineral properties using historical exchange rates, and translate revenues and expenses using average exchange rates during the period. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in US dollars. We have not to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.


Item 4.  Controls and Procedures.


Disclosure Controls and Procedures


Gerry Diakow, our Chief Executive Officer, Chief Financial Officer and President, has evaluated the effectiveness of our disclosure controls and procedures (as the term is defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934) as of the end of the period covered by this report (the “Evaluation Date”).  Based on his evaluation, he has concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective 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 SEC’s rules and forms.





10




Changes in internal control over financial reporting


During the quarter ended July 31, 2013, there were no changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





































11




PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.


We are not a party to any pending legal proceedings and, to the best of our knowledge, none of our properties or assets is the subject of any pending legal proceedings.


Item 1A.  Risk Factors.


We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activities and if we do not obtain sufficient financing, our business will fail.


We were incorporated on August 4, 2010 and to date have been involved primarily in the acquisition and exploration of our mineral properties.  We have no exploration history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon: (i) our ability to locate a profitable mineral property, and (ii) our ability to generate revenues.


For the next twelve months, management anticipates that the minimum cash requirements to fund our proposed exploration program and our continued operations will be approximately $75,000. Accordingly, we do not have sufficient funds to meet our planned expenditures over the next twelve months and will be required to raise additional financing.


Obtaining financing would be subject to a number of factors, including the market prices for the mineral property and base and precious metals.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.  Since our inception, we have used our common shares to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.


Because we are an exploration stage company, our business has a high risk of failure.


We are an exploration stage company that has incurred net losses since inception, we have not attained profitable operations and we are dependent upon obtaining adequate financing to complete our exploration activities.  The success of our business operations will depend upon our ability to obtain further financing to complete our planned exploration program and to attain profitable operations. If we are not able to complete a successful exploration program and attain sustainable profitable operations, then our business will fail.


Our auditors have expressed substantial doubt about our ability to continue as a going concern; as a result we could have difficulty finding additional financing.


Our financial statements have been prepared assuming that we will continue as a going concern.   Except for the interest revenue, we have not generated any revenue from our main operations since inception and have accumulated losses.  As a result, our auditors have expressed substantial doubt about our ability to continue as a going concern.  Our ability to continue our operations depends on our ability to complete equity or debt financings or generate profitable operations.  Such financings may not be available or may not be available on reasonable terms.  Our financial statements do not include any adjustments that could result from the outcome of this uncertainty.


Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.


Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  Our mineral properties do not contain a known body of commercial ore and, therefore, any program conducted on our mineral properties would be an exploratory search of ore.  There is no certainty that any expenditures made in the exploration of our mineral properties will result in discoveries of commercial quantities of ore.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  If the results of our exploration



12



program do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources to purchase such claims. If we do not have sufficient capital resources and are unable to obtain sufficient financing, we may be forced to abandon our operations.


We have no known mineral reserves and if we cannot find any, we may have to cease operations.


We are in the initial phase of our exploration program for the OS Gold Claim.  It is unknown whether this property contains viable mineral reserves.  If we do not find a viable mineral reserve, or if we cannot exploit the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we may have to cease operations and you may lose your investment.  Mineral exploration is a highly speculative endeavor.  It involves many risks and is often non-productive.  Even if mineral reserves are discovered on our properties, our production capabilities will be subject to further risks and uncertainties including:


(i)

Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;

(ii)

Availability and costs of financing;

(iii)

Ongoing costs of production; and

(iv)

Environmental compliance regulations and restraints.


The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near the OS Gold Claim and the Quad Gold Claim, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.  


Because we have not commenced business operations, we face a high risk of business failure.


We have not earned any revenues from business operations as of the date of this report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.


Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.


The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards. The payment of such liabilities may result in our inability to complete our planned exploration program and/or obtain additional financing to fund our exploration program.


Because the prices of metals fluctuate, if the price of metals for which we are exploring decreases below a specified level, it may no longer be profitable to explore for those metals and we will cease operations.


Metal prices are determined by such factors as expectations for inflation, the strength of the United States dollar, global and regional supply and demand, and political and economic conditions and production costs in metals producing regions of the world.  The aggregate effect of these factors on metal prices is impossible for us to predict. In addition, the prices of metals such as lead, zinc, copper, silver, gold or uranium are sometimes subject to rapid short-term and/or prolonged changes because of speculative activities. The current demand for and supply of these metals affect the metal prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of these metals primarily consists of new production from mining. If the prices of the metals are, for a substantial period, below our foreseeable cost of production, it may not be economical for us to continue operations and investors could lose their entire investment.





13




We sometimes hold a significant portion of our cash in United States dollars, which could weaken our purchasing power in other currencies and limit our ability to conduct our exploration programs.


Currency fluctuations could affect the costs of our operations and affect our operating results and cash flows.  Gold and copper are sold throughout the world based principally on the U.S. dollar price, but most of our operating expenses are incurred in Canadian dollar.  The appreciation of Canadian dollar against the U.S. dollar can increase the costs of our operations.


In order to maintain our rights on the OS Gold Claim and Quad Gold Claim we will be required to make annual payments with the Ministry of Mines or complete assessment work on these mineral properties.


Our prospecting activities are dependent upon the grant of appropriate mineral tenures and regulatory commitments, which may be withdrawn or made subject to limitations.  Mineral claims are renewable subject to certain expenditure requirements.  Although we believe that we will obtain the necessary prospecting licenses and permits, including but not limited to drill permits, there can be no assurance that they will be granted or as to the terms of any such grant.  Furthermore, we are required to expend required amounts on the mineral claims of the OS Gold Claim and Quad Gold Claim in order to maintain them in good standing.  If we are unable to expend these amounts, we may lose our title thereto on the expiry date(s) of the relevant mineral claims on the OS Gold Claim and Quad Gold Claim.  There is no assurance that, in the event of losing our title to a mineral claim, we will be able to register the mineral claim in its name without a third party registering its interest first.


Our mineral properties may become subject to aboriginal rights which may affect title to our mineral properties.


In British Columbia, aboriginal rights may be claimed on Crown properties or other types of tenure with respect to which mining rights have been conferred.  We are not aware of any other aboriginal land claims having been asserted or any legal actions relating to native issues having been instituted with respect to any of the land which is covered by the OS Gold Claim and the Quad Gold Claim.


The legal basis of a land claim is a matter of considerable legal complexity and the impact of a land claim settlement and self-government agreements cannot be predicted with certainty.  In addition, no assurance can be given that a broad recognition of aboriginal rights by way of a negotiated settlement or judicial pronouncement would not have an adverse effect on our activities.  Such impact could be marked and, in certain circumstances, could delay or even prevent our exploration or mining activities.


There are environmental risks associated with mineral exploration.


Inherent with mining operations is an environmental risk.  The legal framework governing this area is constantly developing, therefore we are unable to fully ascertain any future liability that may arise from the implementation of any new laws or regulations, although such laws and regulations are typically strict and may impose severe penalties (financial or otherwise).  Our proposed activities of, as with any exploration, may have an environmental impact which may result in unbudgeted delays, damage, loss and other costs and obligations including, without limitation, rehabilitation and/or compensation.  There is also a risk that our operations and financial position may be adversely affected by the actions of environmental groups or any other group or person opposed in general to our activities and, in particular, the proposed exploration and mining by us within the Province of British Columbia, Canada.


We face significant competition in the mineral exploration industry.


We compete with other mining and exploration companies possessing greater financial resources and technical facilities than we do.  Due to our weaker competitive position, we may have greater difficulty in hiring and retaining qualified personnel to conduct our planned exploration activities, which could cause delays in our exploration programs.  In addition, there is significant competition for a limited number of mineral properties.   Due to our weaker financial position, we may be unable to acquire rights to new mineral properties on a continuing basis.





14




Our Quad Gold Claim has not been physically examined by a professional geologist or mining engineer.


We have not engaged a professional geologist or mining engineer to physically examine the Quad Gold Claim.  Gerald Diakow, our Chief Executive Officer and President, conducted a physical examination of the Quad Gold Claim in May 2006.  Due to the fact that Mr. Diakow is a geological consultant and such visit occurred in 2006, there is a risk that the geology and mineralization disclosure of the Quad Gold Claim may not be reflected by historical work and reports.


We have not reviewed the quality or accuracy of historical drilling and sampling reported on our properties.


We have not verified the quality and accuracy of the historical sampling and drilling reported, and we caution readers not to rely upon them. Mr. Diakow has reviewed the data on mineral claims and technical data supplied by the British Columbia Ministry of Mines, Minfile Data Base, and other sources of public technical information. It is important to note that the claims were acquired by map designation by Mr. Diakow. There is no assurance that our properties will be of merit since our exploration programs are based on historical data.


If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail


Our success will largely depend on our ability to hire highly qualified personnel with experience in geological exploration. These individuals may be in high demand and we may not be able to attract the staff we need. In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired. Currently, we have not hired any key personnel. Our failure to hire key personnel when needed could have a significant negative effect on our business.


The recently enacted JOBS Act will allow us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.


We are and we will remain an "emerging growth company" until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a "large accelerated filer" (with at least $700 million in public float) under the Exchange Act. For so long as we remain an "emerging growth company" as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" as described in further detail in the risk factors below. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. If we avail ourselves of certain exemptions from various reporting requirements, as is currently our plan, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us and may result in less investor confidence.


Our election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act, as an “emerging growth company”, we can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the Public Company Accounting Oversight Board (PCAOB) or the SEC. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, our company, as an “emerging growth company”, can adopt the standard for the private company. This may make comparison of our financial statements with any other public company which is not either an “emerging growth company” nor an “emerging growth company” which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.




15




The recently enacted JOBS Act will also allow our company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. We meet the definition of an emerging growth company and so long as it qualifies as an emerging growth company, it will, among other things:

 

·

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;


·

be exempt from the "say on pay provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the "say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;


·

be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act, as amended and instead provide a reduced level of disclosure concerning executive compensation; and


·

be exempt from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

 

Although we are still evaluating the JOBS Act, we currently intend to take advantage of all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. We have elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b)(1) of the JOBS Act. Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as it qualifies as an “emerging growth company”, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an “emerging growth company”, we may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers, which would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate us. As a result, investor confidence in our company and the market price of its common stock may be adversely affected.


Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company”, at such time we cease being an “emerging growth company”, the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company”.  Specifically, similar to “emerging growth companies”, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.  Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze the Company’s results of operations and financial prospects.




16




We will likely conduct further offerings of our equity securities in the future, in which case your proportionate interest may become diluted.


Since our inception, we have relied on such sales of our common shares to fund our operations.  We will likely be required to conduct additional equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common shares are issued in return for additional funds, the price per share could be lower than that paid by our current shareholders. We anticipate continuing to rely on equity sales of our common shares in order to fund our business operations. If we issue additional shares, your percentage interest in us could become diluted.


The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.


Our common shares are quoted on the OTC Bulletin Board.  Companies quoted on the OTC Bulletin Board have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. In addition, to date, the trading volume for our shares on the OTC Bulletin Board has been limited. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire that a price equal or greater than the price paid by the investor.


Our securities are considered a penny stock.


Because our securities are considered a penny stock, shareholders will be more limited in their ability to sell their shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:


1.

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;


2.

contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;


3.

contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;


4.

contains a toll-free telephone number for inquiries on disciplinary actions;


5.

defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and


6.

contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.






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The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.


We did not sell any securities during the quarter ended July 31, 2013.


Item 3.  Defaults upon Senior Securities.


None.


Item 4.  Mine Safety Disclosures


Not applicable.


Item 5.  Other Information.


None.


Item 6.  Exhibits.


The following table sets out the exhibits either filed herewith or incorporated by reference.


Exhibit

Description

3.1

Notice of Articles.(1)

3.2

Articles.(1)

3.3

Certificate of Continuation.(2)

10.1

Consulting Agreement dated October 1, 2011 between the Company and Denis Zyrianov. (1)

10.2

Property Purchase Agreement dated April 11, 2012 between the Company and Gerald Diakow.(1)

10.3

Consulting Agreement dated February 1, 2013 between the Company and Ralph Biggar. (4)

16.1

Code of Ethics. (3)

31

Certification pursuant to Rule 13a-14(a) and 15d-14(a).(5)

32

Certification pursuant to Section 1350 of Title 18 of the United States Code.(5)

99.1

Audit Committee Charter(3)

101

The following financial statements from the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2013, formatted in XBRL: (i) Balance Sheets; (ii) Statements of Operations; (iii) Statement of Stockholders’ Equity (iv) Statements of Cash Flows; (v) Notes to the Consolidated Financial Statements.

                                    

Notes:

(1)  Filed with the SEC as an exhibit to our Registration Statement on Form S-1 filed on June 12, 2012.

(2)  Filed with the SEC as an exhibit to our Registration Statement on Form S-1/A2 filed on August 23, 2012.

(3)  Filed with the SEC as an exhibit to our Annual Report on Form 10-K filed on January 28, 2013

(4)  Filed with the SEC as an exhibit to our Quarterly Report on Form 10-Q filed on March 8, 2013

(5)  Filed herewith.

 






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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 



 

 

 

VENZA GOLD CORP.

 

 

 

 

 

 

 

 

Date:

September 10, 2013

By:

/s/ Gerry Diakow

 

 

 

GERRY DIAKOW

 

 

 

President

 

 

 

(Principal Executive Officer,

Principal Financial Officer and

Principal Accounting Officer)



 

























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