Interim Financial Statements - September 30, 2011 - Final SEDAR

7/31/2019 Interim Financial Statements - September 30, 2011 - Final SEDAR

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VENGA AEROSPACE SYSTEMS INC.

Condensed Interim Consolidated Financial Statementsfor the Three and Nine Month Periods Ended September 30, 2011

(Expressed in Canadian Dollars)

(Unaudited Prepared by Management)


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Notice of No Auditor Review of Condensed InterimConsolidated Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor hasnot performed a review of interim consolidated financial statements, they must beaccompanied by a notice indicating that the financial statements have not beenreviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statementsof the company have been prepared by and are the responsibility of theCompany's management. These condensed interim consolidated financialstatements reflect management's best estimates and judgment based on

information currently available as of November 28, 2011.

The Company's independent auditor has not performed a review of thesecondensed interim consolidated financial statements in accordance with thestandards established by the Canadian Institute of Chartered Accountants for areview of interim consolidated financial statements by an entity's auditor.

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Venga Aerospace Systems Inc.(Incorporated under the laws of the Province of Ontario)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

As at

September 30, 201

December 31, 20

January 1, 20

$$$

(Unaudite(Audite

(Unaudite

ASSETS

(Note

(Note

Current Assets

Cash and cash equivalents

19,494

9,809

42,025

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Prepaids and sundry receivables

7

10,1

19,5

10,5

52,1

Other Assets

Investment (Notes 3(b) and 11)200,0200,0300,0

Investment in Global Mineral Investments, LLC (Notes 3 (c) and 14)

485,4

485,4

485,4

Total Assets

704,9

695,9

837,5

LIABILITIES AND SHAREHOLDERS EQUITY

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Current Liabilities

Accounts payable and accrued charges22,557

37,896

24,784

Due to Directors (Note 9)39,0

Total Liabilities

61,5

37,8

24,7

Shareholders' Equity

Capital Stock (Note 8)17,268,917,268,917,268,9

Contributed Surplus890,6890,6890,6

Deficit(17,516,22(17,501,62(17,346,90

Total Equity

643,4

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658,0

812,7

Total Liabilities and Shareholders' Equity

704,9

695,9

837,5

Going Concern (Note 2)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financialstatements

Approved on behalf of the Board

"Hirsh Kwinter" (signed)

Director

"Dr. Ezra Franken ("signed")

Director

Hirsh Kwinter

Dr. Ezra Franken

Venga Aerospace Systems Inc.

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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Share Capital

# of Shares AmountContributed

Surplus Deficit Total

Balance January 1, 2010 239,171,893 $ 17,268,966 $ 890,684 $ (17,346,907) $ 812,74

Net loss and comprehensiveoss for the nine month periodended September 30, 2010 (40,651) (40,65

Balance September 30,010

239,171,893 $17,268,966

$ 890,684 $ (17,387,558) $ (772,09

Net loss and comprehensiveoss for the three month

period ended December 31,2010

(114,062) (114,06

Balance December 31,010

239,171,893 $ 17,268,966 $ 890,684 $ (17,501,620) $ 658,03

Net loss and comprehensive

oss for the nine month periodended September 30, 2011 (14,606) (14,60

Balance September 30,011

239,171,893 $ 17,268,966 $ 890,684 $ (17,516,226) $ 643,42

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The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements


CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Three Months Ended Nine Months Ended

September 30,2011

September 30,2010

September 30,2011

September 32010

(Note

OPERATING ACTIVITIES

Net Loss $ (2,012) $ (14,480) $ (14,606) $ (40,6

Changes in non-cash working capital items

Prepaids and sundry receivables 618 10,362 630 10,0

Accounts payable and accrued charges (1,031) 244 (15,339) 1

Cash Flow Used in Operating Activities (2,425) (3,874) (29,315) (30,4

FINANCING ACTIVITIES

Loan from Directors 20,000 0 39,000

Cash Flow From Financing Activities 20,000 0 39,000

Net Increase (Decrease) in Cash 17,575 (3,874) 9,685 (30,4

Cash beginning of period 1,919 15,408 9,809 42,0

Cash end of period $ 19,494 $ 11,534 $ 19,494 $ 11,5

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements


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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2011(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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3. OPERATIONS (continued)

(b) 3D Graphics Unit

to the terms of the JV Agreement, and in order to provide the New JV with working or operational capital, theCompany advanced $600,000 USD to the New JV. The Company has no management rights or furtherfunding requirements or obligations with respect to the New JV. The Companys participation in the New JV islimited to the Companys right to receive 30% of the New JVs net profits as and when such profits aredistributed to the joint venturers in accordance with the terms and provisions of the JV Agreement. The NewJV purchased two, Chinese manufactured, specialized 3D printer / processors, with the first of these 3Dprinter/processors having been delivered to the New JV's Houston, Texas production facility in January of2008 and the second of the 3D printer/processors being delivered in March of 2009. In compliance with the

terms of the initial purchase agreement in November of 2009, two technicians from the Chinesemanufacturers of the 3D printer / processors attended at the New JV's production facility to complete theinstallation and calibration of the 3D printer / processors. As a consequence of both the continuing delays inthe New JV becoming operational and the New JVs outstanding and unfulfilled obligation to pay theCompany a licensing fee as required pursuant to the terms of the JV Agreement, Management elected in2008 to take a 50 % write down of its investment interest in the New JV and to take a further $100,00 writedown of its said investment interest in 2010. As a further consequence of the delays in the New JV becomingoperational, the New JV has decided to place the two specialized 3D printer/processors into storage.

(c) Mining and Resource Unit

The Company initially acquired a 3% interest, together with an option to acquire up to an additional 15%interest, in Global Mineral Investments, LLC (GMI), a private U.S. corporation that proposed to lease and

develop gold mining concessions in West Africa. On August 31, 2007, GMI was awarded four Class B GoldMining Licences (the GMI Mining Licences) by the Ministry of Lands, Mines and Energy of the Republic ofLiberia (the Ministry) for four, separate concessions (the GMI Concessions) located in the Sanquin MiningZone in the Republic of Liberia. In consideration for business and management services that the Companyrendered GMI, on September 6, 2007, the Companys ownership interest in GMI was increased from 3% to4%. In April of 2010, the Company was advised by GMI that the GMI Mining Licences had been renewed by theMinistry until February of 2011.

On October 10, 2008, the Company announced that it entered into a funding and operating agreement (theFunding Agreement) with GMI and a number of investors to raise, by way of a non-brokered privateplacement (the Offering or the Placement), the sum of $535,000.00 through the issue of 10,700,000common shares at a price of $0.05 per share. The announced use of the proceeds from the Offering was tofund GMIs Proposed Dredging Operations (the "Proposed Dredging Operations") that GMI planned to carryout in those portions of the Upper Tartweh River system flowing through the GMI Concessions; to acquire anadditional 16% equity interest in GMI (giving Venga a 20% total interest) and for general corporate purposes.The Company and GMI specifically agreed that the Funding Agreement did not create (whether directly or byimplication) a partnership between the Company and GMI, nor did the Funding Agreement create, whetherdirectly or indirectly, a joint venture between the parties. Under the terms of the Funding Agreement, theCompany secured an immediate 20% investment interest in GMI with:

GMI retaining full and complete operational control of all GMIs business operations including, but notlimited to, the Proposed Dredging Operations and Venga being given management of the financial affairsof the Proposed Dredging Operations;

Venga being given the entitlement to receive an annual financial management fee (yet to be received)calculated as being the greater of $120,000.00 or an amount equal to 1% of all monies received,

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disbursed or distributed by the Company as the financial manager of the Proposed Dredging Operations;


Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2011(Expressed in Canadian Dollars)

(Unaudited - Prepared by Management)__________________________________________________________________________________________


(c) Mining and Resource Unit (continued)

Revenues derived from the recovery of all minerals other than gold, including diamonds, being for thebenefit of all parties to the Funding Agreement so that such revenues will be included in the calculation ofthe distributable profits from the Proposed Dredging Operations that are payable to such parties pursuantto the terms of the Funding Agreement;

Subject to the approval of the Ministry, the records of the Ministry with respect to the GMIs Concessionsto be amended to reflect Vengas direct ownership of these concessions in a percentage that is equal toVengas then equity ownership position in GMI;

Venga being granted an option (having expired in October, 2010) to acquire up to an additional 5% equityinterest in GMI at a cost of $100,000.00 per 1% so acquired; and

Any additional mining concessions secured or negotiated by GMI or Venga in Liberia or West Africa to beacquired in the joint names of GMI and Venga reflecting the parties equal ownership of such additionalconcessions.

Operations

In June of 2009, the Company announced that GMI had commenced both land and river based gold miningoperations at one of the GMI Concessions and that these initial mining operations had produced 14 ounces ofgold. GMI suspended all gold mining operations in July of 2009 with the onset of the Liberian rainy season. InNovember of 2009, GMI resumed its Liberian gold mining operations with dredging activities at GMI's DugbeRiver site. In each of the months of March and April, 2010 GMI's gold mining operations produced a further 19ounces of gold. As a direct consequence of the early on set of the Liberian rainy season, GMI ceased amining operations in early May of 2010 and only recommenced dredge mining operations at GMI's Dugbe Riversite in late February, 2011. As of the date of these unaudited condensed interim consolidated financiastatements the Company has yet to receive confirmation as to the results of GMI's dredge mining operationsthat were recommenced in February, 2011. On April 11, 2011, the Company announced that GMI had signed afunding and operational agreement (the "Operational Agreement") with Kiwi, Inc., a Liberian based miningcompany to fund and manage GMI's dredge mining and planned land based mining operations at GMI's KumasHill 15 and Kumasi Hill 18 concessions ("GMI's Planned Land Based Operations") located in Sinoe County,Liberia. Pursuant to the terms of the Operational Agreement, Kiwi, Inc. agreed to commence full miningoperations at GMI's two Kumasi Hill sites by October 1, 2011. While the Corporation has received confirmationfrom GMI that the original October 1, 2011 date for the commencement of mining operations at GMI's two

Kumasi Hill sites has been extended, as of the date of these unaudited condensed interim consolidated financiastatements the Company has yet to receive confirmation as to when, or even if, such mining operations willbegin. The Operational Agreement further provides that Kiwi, Inc. will have full operational management ofGMI's dredge mining operations and Planned Land Based Operations, with all profit derived from suchoperations being divided equally between Kiwi, Inc. and GMI.

Financings

In February of 2010, the Company announced that GMI had signed a letter of intent ("LOI") with RAM Consulting Group("RAM Consulting") of Charlotte, North Carolina wherein RAM agreed, on a best efforts basis, to raise $12 million dollarsto finance GMI's proposed land based gold mining operations in Liberia. As of the date of these financial statementsGMI has not finalized or received any funding from RAM Consulting with respect to the LOI or otherwise.

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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2011

(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

__________________________________________________________________________________________



Financings(continued)

Pursuant to the terms of the Operational Agreement, Kiwi, Inc. has agreed to provide $10 Million of financingfund GMI's Planned Land Based Operations (the "Operational Funding") and to make the Operational Fundi

available for GMI's Planned Land based Operations by September 5, 2011, failing which, the OperationAgreement will be deemed to be null and void. While the Corporation has received confirmation from GMI that toriginal September, 5, 2011 deadline for making the Operational Funding available for GMI's Planned Land baseOperations has been extended, as of the date of these unaudited condensed interim consolidated financstatements the Company has yet to receive confirmation as to when, or even if, the Operational Funding will made available.

On July 18, 2011, the Company announced that GMI, in association with Kiwi, Inc. had signed an Exploration andDevelopment Agreement (the "Exploration Agreement") with Tawana Resources NL ("Tawana") wherein GMgranted Tawana exclusive exploration rights to the GMI's mining concession areas (the "Sinoe Project") in SinoeCounty, Liberia. Tawana has paid GMI an initial exclusivity option fee to secure binding exclusivity and exclusiverights to due diligence over what Tawana has described as GMI's 'highly prospective ground in Liberia'. Thefinancial details of the Exploration Agreement remain commercial - in confidence, with full acquisition details to beprovided on completion of successful due diligence by Tawana.

In a July 13, 2011 press release, Tawana provided the following information and comments on the nature theExploration Agreement and the potential of the Sinoe Project:

that pending successful due diligence, Tawana had acquired from GMI, a highly prospective land package witharguably one of the most prospective Birimian gold structures currently being explored in Liberia - the Dugbe Shethat the Sinoe Project is 25 km along strike from Hummingbird's (AIM:HBR) 0.8Moz Dugbe Project and 40 km alostrike from NT Resources (ASX: NTR) Bukon Jedeh Project. Both of these projects are hosted along secondary an

tertiary order structures adjacent to the main Dugbe Shear. Similar structural targets have been defined in tgovernment regional aeromagnetics data over the Sinoe Project area;

that the Sinoe Project area is characterized by numerous artisanal gold workings observed in the field during recentsite due diligence activities and the area is characterized by numerous quartzite, graphite and manganeseoccurrences on the USGS geological map of Liberia all of which favorably indicate gold prospectivity;

that an aggressive field sampling and mapping program is being designed to commence within the coming weekswith blanket, wide spaced soil traverses within the license area and closer spaced soil traverses over high prioritytargets including, hard-rock artisanal workings, being planned. Assessment of access, artisanal workings in thearea and geological mapping will also be undertaken;

that a communitys consultation program will be undertaken on commencement of field work to ensure a socialicense to operate; and

that under the terms of the Exploration Agreement, Tawana has secured the services of the GMIs site manager tobuild access tracks, additional camp facilities and maintain logistical supplies to facilitate exploration activities.

Pursuant to the terms of the Exploration Agreement, GMI, in association with Kiwi, Inc. will actively participate and

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assist Tawana in the development and operation of the Sinoe Project, retain and independently develop certainidentified gold mining sites within the Sinoe Project and continue to pursue GMI's current and planned golddredging operations in GMI's mining concessions.



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On August 16, 2011, the Company announced that Tawana Resources NL ("Tawana") had advised GMI that

Tawana had successfully completed its due diligence and that Tawana was proceeding with its planned acquisitionof the exclusive exploration and development rights to the Sinoe Project and that Tawana had secured an option topurchase outright the mineral exploration licence over the Sinoe Project held by GMI.

In an August 16, 2011 press release, Tawana provided the following information and comments on its agreementwith GMI to acquire what Tawana described as a 'highly' prospective land package' in Sinoe County Liberia:

that GMI's mineral exploration licence covers an area of Birimian aged rocks along probably the most prospectigold mineralized structure being explored in Liberia today - the Dugbe Shear;

that the Sinoe Project is 25 km along strike from Hummingbird's (AIM:HBR) 0.8Moz Dugbe Project and 40 km alonstrike from NT Resources (ASX: NTR) Bukon Jedeh Project. Both of these projects are hosted along secondary atertiary order structures adjacent to the main Dugbe Shear. Similar structural targets have been defined in tgovernment regional aeromagnetics data over the Sinoe Project area;

that the Sinoe Project area is characterized by numerous artisanal gold workings observed in the field during recentsite due diligence activities and the area is characterized by numerous quartzite, graphite and manganeseoccurrences on the USGS geological map of Liberia all of which favorably indicate gold prospectivity;

that an aggressive field sampling and mapping program has been commenced in the Sinoe Project, with field teamscurrently on site conducting soil sampling traverses over high priority targets areas. Blanket, wide spaced soiltraverses within GMI's license area and closer spaced soil traverses over high priority targets including, hard-rockartisanal workings are being planned;

that it is expected that initial soil sampling data will delineate high priority targets for drilling in the first quarter of2012;

that a community's consultation program has now been successfully completed to ensure a social license tooperate;

that Tawana has secured the services of the GMIs site manager to build access tracks, additional camp facilitiesand maintain logistical supplies to facilitate exploration activities. and

that Tawana will fully fund exploration operations at the Sinoe Project during the first year of the developmentagreement and then have the option to purchase GMI's licence outright through the payment to GMI of acombination of Tawana common shares and cash.

4.BASIS OF PREPARATION

(a) Statement of Compliance

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These condensed interim consolidated financial statements are unaudited and have been prepared inaccordance with IAS 34 Interim FinancialReporting (IAS 34) using accounting policies consistent with theInternational Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board(IASB) and Interpretations of the International Financial Reporting Interpretations Committee (IFRIC).These are the



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4.BASIS OF PREPARATION (continued)

a) Statement of Compliance (continued)

Companys first IFRS consolidated annual financial statements for the year ending December 31, 2011.

Previously, the Company prepared its consolidated annual and consolidated interim financial statements inaccordance with Canadian Generally Accepted Accounting Principles (GAAP). These condensed unauditedinterim consolidated financial statements follow the same accounting policies and methods of application asthe Company's most recent annual financial statement except for those changes recognized on change overto IFRS, as are described in Note 6b discloses the impact, if any, of the transitions to IFRS on the Company'sreported financial position, financial performance and cash flows. These condensed unaudited interimconsolidated financial statements do not include all the information required for full annual financialstatements under IFRS.

(b)Basis of Presentation

These condensed unaudited interim consolidated financial statements have been prepared on the historicalcost basis except for certain noncurrent assets and financial instruments, which are measured at fair value,

as explained in the accounting policies set out below. Historical cost is based on the fair value of theconsideration given in exchange for assets. Any comparative figures presented in these condensed unauditedinterim consolidated financial statements are in accordance with IFRS and have not been audited.

(c)Adoption of New and Revised Standards and Interpretations

The IASB issued a number of new and revised International Accounting Standards, International FinancialReporting Standards, amendments and related interpretations which are effective for the Companys financialyear beginning on or after January 1, 2011. For the purpose of preparing and presenting the financialinformation for the relevant periods, the Company has consistently adopted all these new standards for therelevant reporting periods.

At the date of authorization of these condensed unaudited interim consolidated financial statements, the IASBand IFRIC has issued the following new and revised Standards and Interpretations which are not yet effectivefor the relevant reporting periods:

IFRS 9 Financial Instruments: Classification and Measurement effective for annual periods beginning onor after January 1, 2013, with early adoption permitted, introduces new requirements for the classificationand measurement of financial instruments.

IFRS 10 Consolidated Financial Statements effective for annual periods beginning on or after January 1,2013, with early adoption permitted, establishes principles for the presentation and preparation ofconsolidated financial statements when an entity controls one or more other entities.

IFRS 11 Joint Arrangements - effective for annual periods beginning on or after January 1, 2013, with earlyadoption permitted, provides for a more realistic reflection of joint arrangements by focusing on the rights andobligations of the arrangement, rather than its legal form.

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IFRS 12 Disclosure of Interests in Other Entities - effective for annual periods beginning on or afterJanuary 1, 2013, with early adoption permitted, requires the disclosure of information that enables users offinancial statements to evaluate the nature of, and risks associated with its interests in other entities and theeffects of those interests on its financial position, financial performance and cash flows.

IFRS 13 Fair Value Measurement - effective for annual periods beginning on or after January 1, 2013, withearly adoption permitted, provides the guidance on the measurement of fair value and related disclosuresthrough a fair value hierarchy.



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(c)Adoption of New and Revised Standards and Interpretations (continued)

Management anticipates that the above standards will, where applicable, be adopted in the Companysfinancial statements for the period beginning January 1, 2013, and has not yet considered the impact of theadoption of these standards.

5.EXPLANATION OF TRANSITION TO IFRS

The Company has in the past prepared its financial statements in accordance with Canadian generally acceptedaccounting principles as set out in the Handbook of Canadian Institute of Chartered Accountants (CICAHandbook). In 2010, the CICA Handbook was revised to incorporate International Financial ReportingStandards (IFRS), and require publicly accountable enterprises to apply such standards effective for yearsbeginning on or after January 1, 2011. Accordingly, commencing the three months period ended March 31, 2011and continuing in these condensed unaudited consolidated interim financial statements, the Company hascommenced reporting on this basis. This is therefore the first year that the Corporation has presented its

condensed consolidated financial statements in accordance with IFRS. In the year ended December 31, 2010,the Corporation reported under previous Canadian GAAP and therefore in these condensed interimconsolidated financial statements, the term Canadian GAAP, refers to Canadian GAAP before the adoption ofIFRS. The accounting policies set out in Note 6 of the condensed consolidated financial statements of theCorporation for the three months ended March 31, 2011 have been applied in preparing the condensed

consolidated financial statements for the three and nine months ended September 30, 2011.

These condensed unaudited interim consolidated financial statements have been prepared by the Company inaccordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 - InterimFinancial Reporting. Subject to certain transition elections disclosed in Note 6(a), the Company has consistentlyapplied the same accounting policies in its opening IFRS statement of financial position at January 1, 2010 andthroughout all periods presented, as if these accounting policies had always been in effect. Note 6(b) disclosesthe impact of the transition to IFRS on the Companys reported financial position, financial performance and cashflows, including, if any, the nature and effect of significant changes in accounting policies from those used in the

Companys annual financial statements for the year ended December 31, 2010.The policies applied in these condensed unaudited interim consolidated financial statements are based onIFRS issued and outstanding as of November 28, 2011, the date that the Board of Directors approved thefinancial statements. Any subsequent changes to IFRS that are given effect in the Company's annual financialstatements for the year ending December 31, 2011 could result in restatement of these condensed interimconsolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

IFRS employs a conceptual framework that is similar to Canadian GAAP. The adoption of IFRS has not changedthe Company's Statement of Financial Position, Statement of Comprehensive Loss, Statement of Changes inEquity and Statement of Cash Flows as previously reported under GAAP. As noted below, no transitionaladjustments were made when converting from GAAP to IFRS. These condensed unaudited interimconsolidated financial statements should therefore be read in conjunction with the Company's audited CanadianGAAP annual financial statements for the year ended December 31, 2010 and the accompanying notes as well

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as the Company's condensed interim consolidated financial statements for the period ended March 31, 2011.

6. TRANSITION TO IFRS

The effect, if any, of the Companys transition to IFRS, is summarized in as follows:

a) Exemptions and exceptions from full retrospective application elected by the Company

A number of optional exemptions from full retrospective application are available to the Company uponadoption of IFRS. The impact or non impact of all these optional exemptions on the Company is listed below:



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6. TRANSITION TO IFRS (continued)

a) Exemptions and exceptions from full retrospective application elected by the Company (continued)

The Company has applied the following exemptions:

Exemption Application of exemption

Business Combinations exemption The Company has applied the business combinations exemption inIFRS 1. It has not restated business combinations that took placeprior to January 1, 2010 transition date. No adjustment wasrequired.

The Company has not applied the following exemptions:

Exemption Reason for not applying the exemption

Compound financial instruments exemption The Company has not issued any compound instruments. Thisexemption is not applicable.

Cumulative translation differences exemption There was no cumulative translation differences previouslyrecorded under Canadian GAAP. This exemption is not applicable.

Designation of financial assets and financialliabilities exemption

The Company has no securities classified as available-for-saleinvestments or as financial assets at the fair value through profitand loss. This exemption is not applicable.

Employee benefits exemption The Company has no defined benefit plans. This exemption is notapplicable.

Exemption from restatement of comparatives forIAS 32 and IAS 39

The Company has no hedging relationships or derivatives. Thisexemption is not applicable.

Fair value as deemed cost exemptionThe Company has elected not to measure any items of property,plant and equipment at fair value as at January 1, 2010. Thisexemption is not applicable.

Fair value measurement of financial assets orliabilities at initial recognition

The Company has not applied the exemption offered by therevision of IAS 39 on the initial recognition of the financiainstruments measured at the fair value through profit and loss

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where there is no active market. This exemption is not applicable.

Share-Based payment transaction exemption The Company has elected not to apply the share-based paymentexemption. No adjustment was required.



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a) Exemptions and exceptions from full retrospective application elected by the Company (continued)

The Company has applied the following mandatory exceptions from retrospective application:

Exception Description of exception and application to the Company

Assets held for sale and discontinued operationsexception

Assets held for sale or discontinued operations arerecognized in accordance with IFRS 5. The Company did nothave any assets that met the held-for-sale criteria during theperiod presented. No adjustment was required.

De-recognition of financial assets and liabilitiesexception

Financial assets and liabilities derecognized before January 1,2010 are not re-recognized under IFRS. The Company has nofinancial assets and liabilities that were de-recognized thusthe application of this exemption has no impact on theCompany.

Estimates exception Estimates under IFRS at January 1, 2010 should beconsistent with estimates made for the same date underprevious GAAP, unless there is evidence that those estimateswere in error. No adjustments for estimates have been made.

Hedge accounting exception The Company has never applied hedge accounting. Thisexception is not applicable.

b) Reconciliation between IFRS and Canadian GAAP

IFRS employs a conceptual framework that is similar to Canadian GAAP. The adoption of IFRS may resultsignificant changes to a company's reported financial position, results of operations, and cash flows. Presentebelow are the Company's determinations as to any reconciliations necessary or required to reconcile IFRtreatment the Company's assets, liabilities, equity, net loss and cash flows as such items may differ from thoreported under Canadian GAAP:

Reconciliation of the Statements of Financial Position

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There were no material differences between the Statements of Financial Position presented under IFRS and tcash flow statements presented under Canadian GAAP for the three and nine months ended September 30, 20and the year ended December 31, 2010 on the Company's adoption of IFRS.


Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30,, 2011(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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b) Reconciliation between IFRS and Canadian GAAP (continued)

Reconciliation of the Statements of Assets, Liabilities and Equity

There were no material differences between the Statements of Assets, Liabilities and Equity presented undIFRS and the Statements of Assets, Liabilities and Equity presented under Canadian GAAP for the three and ninmonths ended September 30, 2010 and the year ended December 31, 2010 on the Company's adoption of IFRS

Reconciliation of Loss and Comprehensive Loss

There were no material differences between the Statements of Reconciliation of Loss and Comprehensive Lopresented under IFRS and the Statements of Reconciliation of Loss and Comprehensive Losspresented undCanadian GAAP for the three and nine months ended September 30, 2010 and the year ended December 32010 on the Company's adoption of IFRS.

Reconciliation of the Statements of Cash Flows

There were no material differences between the Statements of Cash Flows presented under IFRS and tStatements of Cash Flows presented under Canadian GAAP for the three and nine months ended September 32010 and the year ended December 31, 2010 on the Company's adoption of IFRS.

7. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These condensed unaudited interim consolidated financial statements follow the same accounting policies amethods of application as the Company's most recent annual financial statement.

(a) Principles of Consolidation

The consolidated unaudited interim financial statements include the accounts of the Company and its subsidiary

b) Basis of Presentation

The Company has prepared these comparative financial statements on a consolidated basis which includes wholly-owned subsidiary, Venga Joint Venture Ltd.

(c) Use of Estimates

The preparation of these condensed unaudited interim consolidated financial statements requires management make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue aexpense during the reporting period. Actual results could differ from these estimates. Significant estimates inclu

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prepaid expenses and certain accrued liabilities.

(d) Financial Instruments

Fair Value

The Company's financial instruments consist of cash, accounts receivable, accounts payable, accrued liabiliti

and loans from directors. Fair value is the amount at which a financial instrument could be exchanged betweewilling parties, based on the current markets for instruments with the same risk, principal and remaining maturitThe fair values of these financial instruments approximate their carrying values, unless otherwise noted.



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7. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)

(d) Financial Instruments (continued)

Fair Value (continued)

Fair Value Measurements Using

Quoted prices inactive markets for

identical instrumentsSignificant other

observable inputsSignificant

unobservableinputs

BalanceSeptember 30, 2011

(Level 1) (Level 2) (Level 3)

$ $ $ $

Cash 19,494 - - 19,494

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identicaassets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 thaare not observable for the asset or liability, either directly(i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset oliability that are not based on observable market data.

The fair values of other financial instruments, which include accounts receivable, accounts payable and accruliabilities and loan from director approximate their carrying values due to the relatively short-term maturity of theinstruments.

Risk

The Company has exposure to a credit risk; liquidity risk; foreign currency risk and interest risk from its usefinancial instruments. The Company's cash is held in major Canadian banks and their subsidiaries. Managemeapproves and monitors the risk management process. There has been no change in the Company's rmanagement process for the period ending September 30, 2011 or for the year ended December 31, 2010.

Credit Risk

Credit risk represents the financial loss that the Company would experience if a counterparty to a financinstrument failed to meet its obligations to the Company. Cash consists of cash bank balances held in a maj

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Canadian financial institution. The Company's secondary exposure to risk is on its receivables. This riskminimal as receivables consist of refundable, government of Canada taxes. As a result, there is no significacredit risk related to the Company's assets. The carrying amounts of this financial asset represent the maximucredit exposure.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. TheCompany has a planning and budgeting process in place to help determine the funds required to support theCompany's normal



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(d) Financial Instruments (continued)

Risk (continued)

Liquidity Risk (continued)

operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet short-term business requirements, taking into account its anticipated cash flows and its holding of cash. Historically, tCompany's principal sources of funding have been the issuance of equity securities for cash; solely throuprivate placements ("Financing"), revenues earned through the provision of consulting services and through tarranging of loans by directors to the Company. The Company's access to additional Financing is alwa

uncertain. There can be no assurance of continued access to significant additional Financing or that tCompany can earn additional consulting revenues or successfully arrange further loans from directors. TCompany's cash is held in major Canadian banks and their subsidiaries. As at September 30, 2011, tCompany had cash of $19,494 and thus faces a material liquidity risk.

Foreign Currency Risk

While the Company's functional currency is the Canadian dollar, the Company is subject to normal market risincluding fluctuations in foreign exchange rates. The Company has not entered into any derivatives or contracto hedge or otherwise mitigate this exposure. As at September 30, 2011, the Company held no financinstruments subject to foreign exchange rates.

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes market interest rates. The risk that the Company will realize a loss due to a change in interest rates is limitbecause the Company as of September 30, 2011, had no interest bearing financial assets or liabilities.

(e) Income Taxes

The Company uses the asset and liability method of accounting for income taxes under which future tax asseand liabilities are recognized for differences between the financial statement carrying amounts of existing asseand liabilities and their respective tax bases. Future tax assets and liabilities are measured using substantiveenacted tax rates in effect in the year in which those temporary differences are expected to be recovered settled. The effect on future tax assets and liabilities of a change in tax rates is recognized as part of the provisiofor income taxes in the year that includes the enactment date. A valuation allowance is recorded to the extethere is uncertainty regarding realization of future tax assets.

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(f) Translation of Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange prevailiat the year end, non-monetary assets and liabilities are translated at historical rates and revenue and expensare translated at the rate of exchange in effect on the transaction dates. Exchange gains and losses arising otranslation of monetary items are included in income in the year in which they occur.



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(g) Long-term Investments

Long-term investments are recorded at cost. Long-term investments classified as held-to maturity financinstruments, are valued at amortized cost, with changes in valuation charged to operations. Long-teinvestments classified available-for-sale financial instruments, are valued at fair market value, with changes in valuation charged comprehensive income. Gains and losses are recognized when investments are sold. Income is recognized oto the extent dividends are received.

h) Impairment of Long-lived Assets

Long-lived assets, including capital assets, are amortized over their useful lives. The Company reviews long-livassets for impairment when events or changes in circumstances indicate that the carrying amount may not recoverable. If the sum of the undiscounted cash flows expected to result from the use and eventual disposition a group of assets is less than its carrying amount, it is considered impaired. An impairment loss is measured the amount by which the carrying amount of the group of assets exceeds its fair value.

(i) Basic and Diluted Loss per Share

The Canadian Institute of Chartered Accountants ("CICA") recommends the use of the treasury stock method computing earnings/loss per share. Under this method, basic loss per share is computed by dividing earninavailable to common shareholders by the weighted average number of common shares outstanding during tyear. In computing the loss per share on a fully diluted basis, the treasury stock method assumes that proceereceived from in-the-money stock options are used to repurchase common shares at the prevailing market raThe weighted average number of common shares outstanding during the period was 239,171,893 (2010239,171,893).

(j) Revenue Recognition

Revenue is earned from the provision of consulting services, licence fees and if and when the Company receivits share of profits from the Company's 3D graphics and mining and resources business units . The Comparecognizes revenue from consulting services when performance of the consulting services are complete arecognizes revenue from the Company's 3D graphics and mining and resources business units when such prodistributions are received. The licence fees represent fees that the New JV is contractually required to pay thCompany for use of the Company's CLIK 3D trade name.

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8.CAPITAL STOCK

Authorized: Unlimited common stock and special shares without par value

Issued: September 30, 2011 September 30, 2010

239,171,893 239,171,893

$17,268,966 $17,268,966

As of September 30, 2011, the Company had not issued any warrants or options nor were there any outstandingwarrants or options.


Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2011(Expressed in Canadian Dollars)

(Unaudited - Prepared by Management)_________________________________________________________________________________________

9. RELATED PARTY TRANSACTIONS

Directors of the Company advanced the Company the sum of $39,000 as loans due and payable on demawhich loans are non - interest bearing. These funds were to be used by the Company for it's ongoing corporaand business operations.

10.CAPITAL MANAGEMENT

The Companys objectives when managing capital are to safeguard its ability to continue as a going concern topursue the development of its three business segments and to maintain a flexible capital structure which

optimizes the cost of capital within a framework of acceptable risk. In the management of capital, the Companyincludes share capital, contributed surplus and deficit.

The Company manages the capital structure and makes adjustments to it in light of changes in economicconditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, theCompany may issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash andcash equivalents.

The Company is dependent on the capital markets and potential private investors as its sole source of operatingcapital and the Companys capital resources are largely determined by the strength of the junior public marketsand by the status of the Companys projects in relation to these markets and its ability to compete for investosupport of its projects.

11. INVESTMENT IN NEW JV

The Company, which holds a 30% interest in the New JV has no management rights or ongoing fundingrequirements or obligations with respect to the New JV. The Company's participation in the management andoperation of the New JV is limited to the Company's right to receive 30% of the New JV's net profits or losses asand when such profits or losses are distributed to the joint venturers in accordance with the terms andprovisions of the New JV Agreement. The Company is only liable to the extent of its investment and isindemnified from the other joint venturers for any excess losses and liabilities. Upon termination of the New JV,the Company is entitled to its capital account share in net assets of the New JV.

12. VENGA'S LICENCE FEE

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Pursuant to the terms of the JV Agreement, the Company granted the New JV a licence (the "Venga Licenceduring the currency of the JV Agreement to use, market, operate and commercially exploit the business traname 'CLIK 3In consideration of the Company's granting of the Venga Licence, the New JV agreed to pay Venga, the sumfifty thousand ($50,000.00) dollars (the "Venga Licence Fee") each year or part year during the currency of the J

Agreement. Notwithstanding the terms of the JV Agreement, the New JV has failed to pay the Company trequired Venga Licence Fee for the years 2006 through 2010. The Company has advised the New JV that tCompany is not waiving any right to recover any portion of the accumulated, unpaid and outstanding amount fthe Venga Licence Fee and that the Company is and continues to regard the accumulated, unpaid aoutstanding amount for the Venga Licence Fee a valid, legal debt owed by the New JV to the Company.

13. IMPAIRMENT OF LONG TERM INVESTMENT

In fiscal year 2008, as a direct consequence of the accumulated and unexpected delays that the New JV (not3(b) and 8) has encountered in becoming operational, management decided to record approximately 50% aswrite-down of the Company's investment interest in the New JV. As a result of the further delays that the New Jhas



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13. IMPAIRMENT OF LONG TERM INVESTMENT (continued)

experienced in becoming operational Management decided in 2010 to a further $100,00 write-down of theCompany's investment in the New JV.

14. INVESTMENT IN PRIVATE COMPANY

Pursuant to the terms and provisions of the Funding Agreement, the Company, currently has a 20% (Septemb30, 2010 - 20%) interest. The Funding Agreement provides that the Company will participate in the profgenerated through GMIs business operations in an amount that is equal to the Companys then investment/equinterest in GMI. Aside from the Companys management of the financial aspects of the Proposed DredgiOperation, for which the Company is entitled to receive a management fee (yet to be received) in accordance wthe terms of the Funding Agreement, the Company has no management rights or ongoing funding requiremenwith respect to GMI or the Proposed Dredging Operation. The Company and GMI have specifically agreed thno term, condition or provision in the Funding Agreement will act to, or be deemed to, create or establish in law, otherwise, a form of partnership between GMI and the Company nor will the terms, conditions and provisionsthe Funding Agreement create, or be deemed to create or establish, in law or otherwise, a joint venture betwethe Company and GMI with respect to the Proposed Dredging Operation or otherwise.

15. INCOME TAX

The Company has accumulated losses for income tax purposes totaling approximately $1,041,872 for which thetax benefits have not been recognized in the financial statements. These losses can be deducted from futureyears' taxable income and expire as follows:

$

2014 345,2772015 244,7802026 219,4732027 82,4462028 60,8242029 34,359

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2030 54,7131,041,872

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Interim Financial Statements - September 30, 2011 - Final SEDAR

Documents

Transcript of Interim Financial Statements - September 30, 2011 - Final SEDAR