Interim Financial Statements - September 30, 2012 - SEDAR Final

7/30/2019 Interim Financial Statements - September 30, 2012 - SEDAR Final

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VENGA AEROSPACE SYSTEMS INC.

Condensed Interim Consolidated Financial Statementsfor the Three and Nine Month Period Ended September 30, 2012

(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 oninformation currently available as of November 26, 2012.

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

$$

(Unaudite

(Audite

ASSETS

Current Assets

Cash and cash equivalents

833

5,108

Prepaids and sundry receivables

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8

5,1

Other Assets

Investment (Notes 3(b) and 10)51,051,0

Investment in Global Mineral Investments, LLC (Notes 3 (a) and 12)

485,4

485,4

Total Assets

537,2

541,5

LIABILITIES AND SHAREHOLDERS EQUITY

Current Liabilities

Accounts payable and accrued charges 25,980

20,772

Due to Directors (Note 7)

47,7

39,0

Total Liabilities

73,7

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59,7

Shareholders' Equity

Capital Stock

17,268,9

17,268,9

Contributed Surplus

890,6

890,6

Deficit

(17,696,11

(17,677,84

Total Equity

463,5

481,8

Total Liabilities and Shareholders' Equity

537,2

541,5

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")

Hirsh Kwinter

Dr. Ezra Franken

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Venga Aerospace Systems Inc.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE LOSS(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

Three Months Ended Nine Months Ended

September 30,2012

September 30,2011

September 30,2012

September 32011

EXPENSES

Office and general $ 670 $ 2,012 $ 12,620 $ 12

Professional fees 0 0 5,643 1

670 2,012 18,263 14

Net loss and comprehensive loss for the period $ (670) $ (2,012) $ (18,263) $ (14,

Basic and diluted loss per common share $(0.000003) $ (0.00001) $ (0.00008) $ (0.00

Weighted average number of shares outstanding 239,171,893 239,171,893 239,171,893 239,171

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


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, 2011 239,171,893 $ 17,268,966 $ 890,684 $ (17,501,620) $ 658,

Net loss and comprehensiveloss for the nine month periodended September 30, 2011 (14,606) (14,6

Balance September 30, 2011 239,171,893 $17,268,966

$ 890,684 $ (17,516,226) $ 643,

Net loss and comprehensiveloss for the three monthperiod ended December 31,2011

(161,623) (161,6

Balance December 31, 2011 239,171,893 $ 17,268,966 $ 890,684 $ (17,677,849) $ 481,

Net loss and comprehensiveloss for the nine month periodended September 30, 2012 (18,263) (18,2

Balance September 30, 2012 239,171,893 $ 17,268,966 $ 890,684 $ (17,696,112) $ 463,

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

Three Months Ended Nine Months Ended

September 30,2012

September 30, 2011 September 30,2012

September 30,

OPERATING ACTIVITIES

Net Loss $ (670) $ (2,012) $ (18,263) $ (14,

Changes in non-cash working capital items

Prepaids and sundry receivables 1,156 618 30

Accounts payable and accrued charges (34) (1,031) 5,208 (15,3

Cash Flow Used in Operating Activities 452 (2,425) (13,025) (29,

FINANCING ACTIVITIES

Loan (repayment to) from Directors (250) 20,000 8,750 39

Cash Flow From Financing Activities (250) 20,000 8,750 39

Net Increase (Decrease) in Cash 202 17,575 (4,275) 9

Cash beginning of period 631 1,919 5,108 9

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Cash end of period $ 833 $ 19,494 $ 833 $ 19



Notes to the Condensed Interim Consolidated Financial Statementsfor the Nine Month Period Ended September 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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1. CORPORATE PROFILE

Venga Aerospace Systems Inc. (the Company) was originally incorporated under the Business CorporationsAct (Ontario) by certificates of amalgamation dated April 26, 1979, amalgamating Frodac Mines Ltd., Grea

Bear Silver Mines Limited and Silver Monarch Mines Limited to become Frodac Consolidated EnergyResources Ltd. On July 25, 1985, the Company changed its name to Global Aerospace Systems Inc. and onNovember 3, 1987, the Company further changed its name to Venga Aerospace Systems Inc.

In addition, these condensed interim unaudited consolidated financial statements include the wholly ownedsubsidiary Venga Joint Venture Ltd., which is inactive.

2. GOING CONCERN

These condensed interim unaudited consolidated financial statements have been prepared in accordancewith IFRS applicable accounting principles to the presentation of interim financial statements and to a goingconcern which assumes that the Company will be able to realize its assets, including the ultimate realizationof its long-term investments, and discharge its liabilities in the normal course of business. Recurring sources

of revenue have not yet proven to be sufficient. The Company needs to obtain additional financing to enableit to continue its business. In the absence of additional financing, the Company may not have sufficient fundsto meet its obligations. Management continues to monitor the cash needs and consider various alternativesto raise additional financing. However, management is reasonably confident but can offer no guarantee that iwill be able to secure the necessary financing to enable the Company to continue as a going concern. Thesecondensed interim unaudited consolidated financial statements do not give effect to adjustments that wouldbe necessary should the Company be unable to continue as a going concern. There is no assurance that thiswill be successful.

If the going concern basis is not appropriate, material adjustments may be necessary in the carrying amountsand/or classification of assets and liabilities and the loss for the period reported in these condensed interimunaudited consolidated financial statements.

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3. OPERATIONS

(a) 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 anddevelop 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%.

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 GM


Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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3. OPERATIONS (continued)

(a) Mining and Resource Unit (continued)

(giving Venga a 20% total interest) and for general corporate purposes. The Company and GMI specificallyagreed that the Funding Agreement did not create (whether directly or by implication) a partnershipbetween the Company and GMI, nor did the Funding Agreement create, whether directly or indirectly, a jointventure between the parties. Under the terms of the Funding Agreement, the Company secured animmediate 20% investment interest in GMI with:

GMI retaining full and complete operational control of all GMIs business operations including, but not

limited to, the Proposed Dredging Operations and Venga being given management of the financialaffairs of the Proposed Dredging Operations;

Venga being given the entitlement to receive an annual financial management fee (which fee, nor anyportion of same, has yet to be received by the company as of the date of these financial statements)calculated as being the greater of $120,000.00 or an amount equal to 1% of all monies received,disbursed or distributed by the Company as the financial manager of the Proposed DredgingOperations;

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 calculationof the distributable profits from the Proposed Dredging Operations that are payable to such partiespursuant to the terms of the Funding Agreement;

Subject to the approval of the Ministry, the records of the Ministry with respect to the GMIs

Concessions to be amended to reflect Vengas direct ownership of these concessions in a percentage

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that is equal to Vengas then equity ownership position in GMI; and

Any additional mining concessions secured or negotiated by GMI or Venga in Liberia or West Africa tobe acquired in the joint names of GMI and Venga reflecting the parties equal ownership of suchadditional concessions.

In April of 2011, GMI signed a an operational agreement with Kiwi, Inc., ("Kiwi") a private Liberian based mini

company, to fund and manage GMI's dredge mining and planned land based mining operations at several of tGMI Concessions. On July 18, 2011, the Company announced that GMI, in association with Kiwi, Inc. hsigned an Exploration and Development Agreement (the "Exploration Agreement") with Tawana Resources N("Tawana") wherein GMI granted Tawana exclusive exploration rights to the GMI Concessions (which exclusiexploration rights are hereinafter referred to as the "Sinoe Project") in Sinoe County, Liberia. Tawana paid Gan initial exclusivity option fee to secure binding exclusivity and exclusive rights to due diligence over whTawana has described as GMI's 'highly prospective ground in Liberia'. In an earlier July 13, 2011 press releasTawana announced that pursuant to the terms of Exploration Agreement and pending successful due diligencTawana had acquired from GMI, what Tawana described as a highly prospective land package within arguabone of the most prospective Birimian gold structures currently being explored in Liberia. Tawana also confirmthat an aggressive field sampling and mapping program was to be completed in the Sinoe Project and thahad retained the services of the GMIs site manager to build access tracks, additional camp facilities amaintain logistical supplies to facilitate exploration activities.

Pursuant to the terms of the Exploration Agreement, GMI, in association with Kiwi, Inc. will actively participaand assist Tawana in the development and operation of the Sinoe Project, retain and independently develocertain identified gold mining sites within the Sinoe Project and continue to pursue GMI's current and plannegold dredging operations in the GMI Concessions.



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On August 16, 2011, the Company and Tawana issued separate press releases announcing that Tawana hsuccessfully completed its due diligence and that Tawana was proceeding with its planned acquisition of thexclusive exploration and development rights to the Sinoe Project. Tawana announced that pursuant to tterms of the Exploration Agreement, it had paid GMI a $10,000 USD option payment to secure exclusiexploration rights and had paid GMI a further $40,000 USD upon Tawana's successful completion of its du

diligence. The Exploration Agreement required Tawana to pay GMI a further $50,000 USD (the "ExecutiPayment") within 6 months of the commencement of Tawana's exploration in the Sinoe Project. Tawaannounced it expected that the initial soil sampling data would delineate high priority targets for a drilliprogram that would be commenced in 2012. Tawana further announced that it would fully fund exploratioperations at the Sinoe Project during the first year of the Exploration Agreement and then have the option (t"Tawana Option") to purchase the GMI Concessions outright from GMI through the payment to GMI ofcombination of Tawana common shares and cash.

On January 18, 2012, the Company announced that GMI had resumed its Liberian gold mining operations wdredging at GMI's Dugbe River site having begun on January 15, 2012. As of the date of these condensinterim unaudited consolidated financial statements, the Company has yet to receive confirmation as to tcontinuity and to the results, if any, of GMI's dredge mining operations that were recommenced in January 2012.

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favourable to host gold deposits in the underlying geological formations and in the overlyingoverburden (placer deposits). The area under consideration, encompassing the property of GMI, ishost to a number of gold artisanal mining operations. Several places are still actively mined by thoseinformal miners and several other places have been in the past targets of such operations.

There are several interpreted possible shear zones which have been outlined within the limits of theexploration licence. The most prominent is the eastern extension of the Dugbe shear zone which

crosses the middle part of the concession.

As all experienced explorationists are aware, features like the presence of shear zones are positivefor gold exploration. The fractures and stockwork generated by shearing/faulting favour the formationof auriferous quartz veins and lenses, so their presence cannot be overlooked.

Some 20-40 km east of the limits of the licence of GMI, major discoveries have unveiled two deposits(Hummingbird) totaling some 2.8 Moz Au while Equator Resources will drill test the Bukon Jedeh Goldanomaly in order to determine its economic potential. All these gold occurrences are located in theneighbourhood of the Dugbe shear.

In a general way, the geology in the surroundings of the Hummingbird and Equator discoveries is thesame as that underlying the exploration licence of GMI. So, gold deposits may be found in both

places, in the bedrock and in the overburden as alluvial and eluvial placers."

The author of the Technical Report, Mr. Pierre LeBrque, graduated from the cole Polytechnique (FacultyEngineering), University of Montreal in 1971 with a B.A. Sc. degree in Geological Engineering. Mr. LeBrqhas practiced his profession continuously since his graduation and has extensive experience in all phases miningexploration and development in both Canada and internationally, including participating in mining projecsituated in such countries as Madagascar, Sierra Leone, Angola, Nigeria, Algeria, Mali, Peru, Bolivia, Mongoand Kazakhstan. The mining operations that Mr. LeBrque has participated in have included the exploratiand development of gold, silver, uranium, zinc, lead, bentonite and kieselghur projects. Mr. LeBrque ismember in good standing of the Order des Ing nieurs du Quebec which is an official associatilegally created by the Government of Quebec to supervise the practice of professionengineering and applied sciences. Mr. LeBrque was a member of an advisory committee that provid

recommendations to the Securities Commission of Quebec concerning the guidelines used to accept technicreports produced to support public financing of mining exploration companies.



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On July 27, 2012 the Company further announced that it has been advised by GMI that Tawana and GMI haagreed to extend the option period within which Tawana has to finalize its purchase of the GMI Concessions September 28, 2012 from the originally stipulated date of June 28th 2012.

On July 27, 2012 the Company further announced that GMI has advised the Company that the Ministry harevoked GMI's exploration licence for the GMI Concessions for alleged regulatory breaches. The Companpress release further provided a statement from Jon O'Regan, GMI's President, asserting GMI's position ththe Ministry's actions were "unwarranted" and that GMI was taking the "necessary steps to resolve thsituation."

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(b) 3D Graphics Unit

In November of 2006, the Company entered into a joint venture agreement (the JV Agreement) with 3DNorth America, Inc., of Kenner, Louisiana; United Business & Capital Services, LLC of Kenner, Louisiana; EKLLC of Lafayette, Louisiana and Armadillo Photo Supply, Inc. of Houston, Texas creating a new commercentity, the 3DP North America Joint Venture (the New JV), to provide a range of advanced 3D products aprint services for both commercial and consumer customers. The Company retains a 30% ownership interestthe New JV with 3DP North America, Inc., who acts as the managing venturer of the New JV, owning tremaining 70% of the venture. The New JV purchased two, Chinese manufactured, specialized 3D printeprocessors, with the first of these 3D printer/processors having been delivered to the New JV's Houston, Texproduction facility in January of 2008 and the second being delivered in March of 2009. As a consequencethe delays in the New JV becoming operational, the New JV has decided to place the two specialized 3printer/processors into storage.

(c) Aerospace Unit

The Company, in association with ARINC Incorporated (www.arinc.com), made an unsolicited proposal (tVenga Proposal) to the Canadian government to provide replacement jet aircraft for the Canadian ForceSnowbirds aerial demonstration squadron. As a direct result of the continuing delays in the Canadi

government's decision with respect to selecting a program to replace or upgrade the Snowbirds' aircraft, tCompany is holding the Venga Proposal in abeyance pending receipt of a positive response from the Canadigovernment. As a direct consequence of the passage in time, Management is proceeding on the assumptithat the Canadian Government will not be selecting the Venga Proposal as the option for upgrading or replacithe Snowbirds aircraft.

4.BASIS OF PREPARATION

(a) Statement of Compliance

These condensed interim unaudited consolidated financial statementshave been prepared using accountingpolicies consistent with the International Financial Reporting Standards (IFRS) issued by the Internationa

Accounting Standards Board (IASB) and Interpretations of the International Financial ReportingInterpretations Committee (IFRIC). These condensed interim unaudited consolidated financial statementshave been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting

Accordingly, they do not include all of the information required for full annual financial statements required byIFRS as issued by IASB and interpretations issued by IFRIC.


Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2012

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

4. BASIS OF PREPARATION (continued)

(a) Statement of Compliance (continued)

These condensed interim unaudited consolidated financial statements for the period ended September 302012 have been prepared by management, reviewed by the Audit Committee and approved and authorizedfor issue by the Board of Directors on November 26, 2012. Shortly thereafter, the financial statements aremade available to shareholders and others through filing on the System for Electronic Document Analysis andRetrieval (SEDAR).

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(b)Basis of Presentation

These condensed interim unaudited consolidated financial statements have been prepared on the historicacost basis except for financial instruments, which are measured at fair value. These financial statements have beenprepared using IFRS principles applicable to a going concern, which contemplate the realization of assets andsettlement of liabilities in the normal course of business as they come due. All amounts are presented in Canadiandollars, unless otherwise indicated.

(c)Adoption of New and Revised Standards and Interpretations

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

At the date of authorization of these condensed interim unaudited consolidated financial statements, the IASBand IFRIC have issued the following new and revised Standards and Interpretations which are not yeteffective for the relevant reporting periods.

IFRS 9 Financial Instruments IFRS 9 Financial Instruments is part of IASBs wider project to replaceIFRS 39 Financial Instruments: Recognition and Measurement. IFRS 9 retains but simplifies the mixedmeasurement model and establishes two primary measurement categories for financial assets:amortized cost and fair value. The basis of classification depends on the entitys business model andthe contractual cash flow characteristics of the financial asset. The standard is effective for annualperiods beginning on our after January 1, 2015. The Company is in the process of evaluating the impactof the new standard on the accounting for available-for-sale investment.

IFRS 10 Consolidated Financial Statements IFRS 10 establishes principles for the presentation andpreparation of consolidated financial statements when an entity controls one or more entities. IFRS 10replaces the consolidation requirements of SIC-12 Consolidation Special Purpose Entities and IAS 27Consolidated and Separate Financial Statements and is effective for annual periods beginning on orafter January 1, 2013. Earlier adoption is permitted. IFRS 10 builds upon existing principles byidentifying the concept of control as the determining factor in whether an entity should be included

within the consolidated financial statements of the parent company. The standard provides additionalguidance to assist in the determination of control where this is difficult to assess. The Company iscurrently assessing the financial impact of the new standard.

IFRS 12 Disclosure of Interests in Other Entities IFRS 12 is a new and comprehensive standard ondisclosure requirements for all forms of interests in other entities, including subsidiaries, jointarrangements, associates and unconsolidated structured entities. IFRS is effective for annual periodsbeginning on or after January 1, 2013. The Company is currently assessing the financial impact of thenew standard.



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4. BASIS OF PREPARATION (continued)

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

IFRS 13 Fair-Value Measurement IFRS 13 Fair Value Measurement aims to improve consistency andreduce complexity by providing a precise definition of fair value and a single source of fair value

measurement and disclosure requirements for use across IFRSs. The effective date of this new

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standard is for annual periods beginning on or after January 1, 2013. The Company is currentlyassessing the financial impact of the new standard.

5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These condensed interim unaudited consolidated financial statements follow the same accounting policies

and methods of application as the Company's most recent annual financial statements.

a) Basis of Presentation

The Company has prepared these comparative condensed interim unaudited consolidated financiastatements on a consolidated basis which includes its wholly-owned subsidiary, Venga Joint Venture Ltd.

(b) Principles of Consolidation

These condensed interim unaudited consolidated financial statements include the accounts of VengaAerospace Systems Inc. ("the Company") and its subsidiary.

(c) Use of Estimates

The preparation of these condensed interim unaudited consolidated financial statements in accordance wIFRS requires management to make judgments, estimates and assumptions that affect the application accounting policies and the reported amounts of assets, liabilities, revenues and expenses as well as thdisclosure of contingent assets and liabilities at the date of the financial statements. Judgments, estimates aunderlying assumptions are reviewed on a continuous basis and are based on managements experience aother factors, including expectations of future events that are believed to be reasonable under tcircumstances. Actual outcomes could differ from those estimates.

Significant areas of financial reporting the require managements estimates and judgements are as follows:

Accrued liabilities

The Company uses estimates to record the expenses that have been incurred but payments have not beenmade.

Impairment of long- term investments

The Company records impairment of long-term investments based on managements determinationJudgment is required to determine the extent of impairment.

(d) Financial Instruments

Financial assets

Financial assets are classified into three categories:

Fair value through profit or loss (FVTPL)

Held to maturity (HTM); and

Loans and receivables.



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5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)(d) Financial Instruments (continued)

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Financial assets at fair value through profit or loss (FVTPL)

A financial asset is classified at fair value through profit or loss if it is classified as held-for-trading or isdesignated as such upon initial recognition. Financial assets are designated as at FVTPL if the Companymanages such investments and makes purchase and sale decisions based on their fair value in accordancewith the Companys risk management strategy. Attributable transaction costs are recognized in profit or losswhen incurred. FVTPL are measured at fair value, and changes are recognized in the statements ooperations and comprehensive loss. Cash is categorized as FVTPL and is carried at fair value.

Held to maturity (HTM)

These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities thathe Companys management has the positive intention and ability to hold to maturity. These assets aremeasured at amortized costs using the effective interest method. If there is objective evidence that the assetis impaired, determined by reference to external credit ratings and other relevant indicators, the financialasset is measured at the present value of estimated future cash flows. Any changes to the carrying amount ofthe investment, including impairment losses, are recognized in the statements of operations andcomprehensive loss.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted on anactive market. Such assets are initially recognized at fair value plus any direct attributable transaction costs.Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effectiveinterest method, less anyimpairment loss. The Company classified its financial assets which consisted of prepaids and sundryreceivables as loans and receivables.

Financial liabilities

Financial liabilities are classified as other financial liabilities. This category includes accounts payable andaccrued charges and due to directors, all of which are recognized at amortized cost.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financiaassets are impaired when there is objective evidence that, as a result of one or more events that occurredafter the initial recognition of the financial assets, the estimated future cash flows of the investments havebeen affected.

For all financial assets, objective evidence of impairment could include:

significant financial difficulty of the issuer or counterparty; or it becomes probable that the borrower will enter bankruptcy or financial re-organization.

For certain categories of financial assets, such as receivables, assets that are assessed not to be impairedindividually are subsequently assessed for impairment on a collective basis. The carrying amount of financia

assets is reduced by the impairment loss directly for all financial assets except receivables, where thecarrying amount is reduced through the use of an allowance account. Subsequent recoveries of receivablespreviously written off are

Venga Aerospace Systems Inc.Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended September 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Financial Instruments (continued)

Impairment of financial assets (continued)

credited against the allowance account. Changes in the carrying amount of the allowance account are

recognized in the statement of comprehensive loss. If, in a subsequent year, the amount of the impairmentloss decreases and the decrease can be related objectively to an event occurring after the impairment wasrecognized, the previously recognized impairment loss is reversed through the statement of loss andcomprehensive loss to the extent that the carrying amount of the investment at the date the impairment isreversed does not exceed what the amortized cost would have been had the impairment not beenrecognized.

(e) Income Taxes

The Company uses the asset and liability method of accounting for income taxes under which future taxassets and liabilities are recognized for differences between the financial statement carrying amounts ofexisting assets and liabilities and their respective tax bases. Future tax assets and liabilities are measuredusing substantively enacted tax rates in effect in the year in which those temporary differences areexpected to be recovered or settled. The effect on future tax assets and liabilities of a change in tax rates is

recognized as part of the provision for income taxes in the year that includes the enactment date. Avaluation allowance is recorded to the extent there is uncertainty regarding realization of future tax assets.

(f) Translation of Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchangeprevailing at the year end, non-monetary assets and liabilities are translated at historical rates and revenueand expenses are translated at the rate of exchange in effect on the transaction dates. Exchange gains andlosses arising on translation of monetary items are included in income in the year in which they occur.

(g) Long-term Investments

Long-term investments are recorded at cost. Long-term investments classified as held-to maturity financialinstruments, are valued at amortized cost, with changes in valuation charged to operations. Long-term

investments classified as available-for-sale financial instruments, are valued at fair market value, withchanges in valuation charged to comprehensive income. Long-term investments in equity instruments thatdo not have a quoted market price in an active market and whose fair value cannot be reliably measuredare measured at cost gains and losses are recognized when investments are sold. Income is recognizedonly to 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 reviewslong-lived assets for impairment when events or changes in circumstances indicate that the carryingamount may not be recoverable. If the sum of the undiscounted cash flows expected to result from the useand eventual disposition of a group of assets is less than its carrying amount, it is considered impaired. Animpairment loss is measured as the amount by which the carrying amount of the group of assets exceedsits fair value.

(i) Basic and Diluted Loss per Share

The Canadian Institute of Chartered Accountants ("CICA") recommends the use of the treasury stockmethod in computing earnings/loss per share. Under this method, basic loss per share is computed bydividing earnings available to common shareholders by the weighted average number of common sharesoutstanding during the year. In computing the loss per share on a fully diluted basis, the treasury stockmethod assumes that proceeds received


Notes to the Condensed Interim Consolidated Financial Statements

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for the Period Ended September 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

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5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(i) Basic and Diluted Loss per Share (continued)

from in-the-money stock options are used to repurchase common shares at the prevailing market rate. Theweighted average number of common shares outstanding during the period was 239,171,893 (2011 -239,171,893).

(j) Revenue Recognition

Revenue is recognized to the extent that it is probable that future economic benefits will flow to theCompany and the revenue can be reliably measured. Revenue is measured at the fair value of theconsideration received or to be received.

Revenue is earned from the provision of consulting services, licence fees and if and when the Company

receives its share of profits from the Company's 3D graphics and mining and resources business units. TheCompany recognizes revenue from consulting services when performance of the consulting services arecomplete and recognizes revenue from the Company's 3D graphics and mining and resources businessunits when such profit distributions are received. Licence fees represent fees that the New JV iscontractually required to pay the Company for use of the Company's CLIK 3D trade name.

6.CAPITAL STOCK

Authorized: Unlimited common stock and special shares without par value

Issued: September 30, 2012 September 30, 2011

239,171,893 239,171,893

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

As of September 30, 2012, the Company had not issued any warrants or options nor were there anyoutstanding warrants or options.

7. RELATED PARTY TRANSACTIONS

Directors of the Company advanced the Company the sum of $47,750 as loans due and payable ondemand which loans are non - interest bearing. These funds were to be used by the Company for itsongoing corporate and business operations.

8.CAPITAL MANAGEMENT

The Companys objectives when managing capital are to safeguard its ability to continue as a goingconcern to pursue the development of its three business segments and to maintain a flexible capitalstructure which optimizes the cost of capital within a framework of acceptable risk. In the management ofcapital, the Company includes share capital, contributed surplus and deficit.


Notes to the Condensed Interim Consolidated Financial Statements

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for the Period Ended September 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

_______________________________________________________________________________________

8. CAPITAL MANAGMENT (continued)

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 cashand cash equivalents.

The Company is dependent on the capital markets and potential private investors as its sole source ofoperating capital and the Companys capital resources are largely determined by the strength of the juniopublic markets and by the status of the Companys projects in relation to these markets and its ability tocompete for investor support of its projects.

The Company is not subject to externally imposed capital requirements

10. INVESTMENT IN NEW JV

September 30, 2012 September 30, 2011$ $

Investment, end of period 51,000 200,000

Pursuant to the terms of the JV Agreement, and in order to provide the New JV with working or operationalcapital, the Company advanced $600,000 USD to the New JV. The Company has no management rights orfurther funding requirements or obligations with respect to the New JV. The Companys participation in theNew JV is limited to the Companys right to receive 30% of the New JVs net profits as and when such

profits are distributed to the joint venturers in accordance with the terms and provisions of the New JVAgreement. As a consequence of both the continuing delays in the New JV becoming operational and theNew JVs outstanding and unfulfilled obligation to pay the Company a licensing fee as required pursuant tothe terms of the New JV Agreement, Management elected in 2008 to take write down its investment interestin the New JV for impairment to $300,000 and to take a further write down for impairment loss of $100,000in 2010. With the New JV continuing to experience delays in becoming operational and following anappraisal by 3DP North America Inc. of the fair market value of JVs assets, Management decided to recorda further impairment loss of $149,000 of the Company's interest in the New JV in 2011.

The Company is only liable to the extent of its investment and is indemnified from the other joint venturersfor any excess losses and liabilities. Upon termination of the New JV, the Company is entitled to its capitalaccount share in net assets of the New JV.

11. VENGA'S LICENCE FEE

Pursuant to the terms of the New JV Agreement, the Company granted the New JV a licence (the "VengaLicence") during the currency of the New JV Agreement to use, market, operate and commercially exploitthe business trade name 'CLIK 3D'. In consideration of the Company's granting of the Venga Licence, theNew JV agreed to pay Venga, the sum of fifty thousand ($50,000.00) dollars (the "Venga Licence Fee")each year or part year during the currency of the New JV Agreement. Notwithstanding the terms of the NewJV Agreement, the New


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Notes to the Condensed Interim Consolidated Financial Statementsfor the Period Ended June 30, 2012(Expressed in Canadian Dollars)(Unaudited - Prepared by Management)

_______________________________________________________________________________________

11. VENGA'S LICENCE FEE (continued)

JV has failed to pay the Company the required Venga Licence Fee for the years 2006 through 2011. TheCompany has advised the New JV that the Company is not waiving any right to recover any portion of theaccumulated, unpaid and outstanding amount for the Venga Licence Fee and that the Company is andcontinues to regard the accumulated, unpaid and outstanding amount for the Venga Licence Fee a valid,legal debt owed by the New JV to the Company. However, in accordance with the Companys significantaccounting policies with respect to revenue recognition, revenue with respect to Vengas licence fee has notbeen recorded for the periods ended September 30, 2012 or September 30, 2011.

12. INVESTMENT IN GLOBAL MINERAL INVESTMENTS LLC

Pursuant to the terms and provisions of the Funding Agreement the Company currently has a 20%

(September 30, 2011 - 20%) interest. The Funding Agreement provides that the Company will participate inthe profits generated by GMIs mining operations and from the Companys management of the financialaspects of the Proposed Dredging Operation for which the Company is entitled to receive a managementfee in accordance with the terms of the Funding Agreement. To date the Company has yet to receive anyportion or part of such management fee. The Company has no operational management rights or ongoingfunding requirements with respect to GMI or the Proposed Dredging Operation. The Company and GMIhave specifically agreed that no term, condition or provision in the Funding Agreement will act to, or bedeemed to, create or establish in law, or otherwise, a form of partnership between GMI and the Companynor will the terms, conditions and provisions of the Funding Agreement create, or be deemed to create orestablish, in law or otherwise, a joint venture between the Company and GMI with respect to the ProposedDredging Operation or otherwise.

Though GMI carried on limited dredging and land base mining operations in the GMI Concessions duringboth the 2009 and 2010 operational seasons which only produced approximately 80 ounces of gold, as of

the date of these condensed interim unaudited consolidated financial statements Vengas investment inGMI constitutes the Companys main asset. In April of 2011, GMI signed a an operational agreement withKiwi, Inc., ("Kiwi") a private Liberian based mining company, to fund and manage GMI's dredge mining andplanned land based mining operations at several of the GMI Concessions. Pursuant to the terms of theOperational Agreement, Kiwi, Inc. has agreed to provide $10 Million of financing to fund GMI's PlannedLand Based Operations (the "Operational Funding") and to make the Operational Funding available forGMI's Planned Land based Operations by September 5, 2011, failing which, the Operational Agreement willbe deemed to be null and void. While the Corporation has received confirmation from GMI that the originalSeptember, 5, 2011 deadline for making the Operational Funding available for GMI's Planned Land basedOperations has been extended, as of the date of these unaudited condensed interim consolidated financialstatements the Company has yet to receive confirmation as to when, or even if, the Operational Funding willbe made available.

Pursuant to its managerial mandate, in July of 2011, Kiwi negotiated the Exploration Agreement between

GMI and Tawana an Australian based public company listed on the Australian Stock Exchange (ASX: TAW)wherein GMI granted Tawana exclusive exploration rights to the Sinoe Project. Pursuant to the terms of theExploration Agreement Tawana paid GMI an initial exclusivity option fee to secure binding exclusivity andexclusive rights to due diligence over what Tawana described as GMI's 'highly prospective ground inLiberia'. Tawana also confirmed that an aggressive field sampling and mapping program would becompleted in the Sinoe Project and that it had retained the services of GMIs site manager to build accesstracks, additional camp facilities and maintain logistical supplies to facilitate exploration activities.

On August 16, 2011, the Company and Tawana announced that Tawana had successfully completed itsdue diligence and that Tawana was proceeding with its planned acquisition of the exclusive exploration anddevelopment rights to the Sinoe Project and that Tawana had further secured an option to purchase outrightthe GMI Concessions. Pursuant to the terms of the Exploration Agreement Tawana has paid GMI$100,000 to secure

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_____________________________________________________________________________________________

12. INVESTMENT IN GLOBAL MINERAL INVESTMENTS LLC (continued)

its exclusive exploration rights to the GMI Concessions. Tawana will be fully funding the explorationoperations in the Sinoe Project during the first year of the Exploration Agreement and then have the optionto purchase by June 28th 2012 the GMI Concessions outright from GMI through the payment to GMI of acombination of Tawana common shares and cash. Tawanas initial exploration program has identifiedseveral high priority soil anomalies within the Sinoe Project and its infill soil sampling program has collected3,300 samples which proved results of up to 1g/t which results Tawana has declared provides confidence ofsignificant mineralization occurring below. On July 27, 2012 the Company announced that Tawana andGMI have agreed to extend the option period within which Tawana has to finalize its purchase of the GMI

Concessions to September 28, 2012. On October 15, 2012, the Company announced that Tawana and GMIhave agreed to a further extension of the option period to December 31, 2012.

On October 30, 2012 Tawana announced the results of the latest, approximately 2,700 infill soil samplesfrom its ongoing sampling program carried out in the Sinoe Project and stated that it has now defined high-tenor +50ppb up to 1 g/t Au soil anomalies within the Sinoe Project in addition to trench intersections of 12mat 2.3 g/t including 4m at 6.25 g/t Au. In commenting on these latest sampling results Tawanas managingDirector, Len Kolff said The Dugbe Shear continues to shape up into a major new gold province in theWest African gold story; it is exciting to be part of this emerging province.

On November 9, 2012, the Company announced that the Ministry had now re-instated GMIs mininglicences which, as the Company announced on July 27, 2012, were revoked on account of GMIs allegedregulatory breaches.

Based on the results of Tawanas sampling program, the opinions set out in the Technical Report and

Tawanas expressed intention of completing its planned purchase of the GMI Concessions, it isManagements opinion that, notwithstanding that there still remains uncertainty whether Tawana will or havethe financial ability to close its intended purchase of the GMI Concessions, the Companys investment inGMI is not impaired as of September 30, 2012.

13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

(a) Measurement and Fair Value

The Companys financial assets and liabilities are classified and measured as follows:

Classification Measurement Fair ValueSeptember 30,

2012

Fair valuSeptember 3

20

$

Financial assets:

Cash and cash equivalent

Prepaids and sundry receivables

Held for trading

Loans and receivables

Fair value

Amortized cost

833

35

19,49

8

Financial liabilities:

Accounts payable and accrued

charges

Other financial liabilities Amortized cost 25,980 22,55

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Due to Directors Other financial liabilities Amortized cost 47,750 39,00



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13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

(a) Measurement and Fair Value (continued)

Fair value is the amount at which a financial instrument could be exchanged between willing parties, based on

the current markets for instruments with the same risk, principal and remaining maturity. The fair values of theCompanys financial instruments approximate their carrying values because of the short-term nature of theseinstruments.

Financial instruments recorded at fair value at the balance sheet date are classified using a fair valuehierarchy that reflects the significance of the inputs used in making the measurements. The fair valuehierarchy has the following levels:

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

Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1that are 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 or

liability that are not based on observable market data.

The fair value of cash is measured based on Level 1 inputs referred to in the three levels of the hierarchynoted above. The Company does not have any Level 2 or 3 fair value measurements. There have been nosignificant transfers between levels.

(b) Risk

The Company has exposure to a credit risk; liquidity risk; foreign currency risk and interest risk from its use financial instruments. The Company's cash is held in major Canadian banks and their subsidiarieManagement approves and monitors the risk management process. There has been no change in tCompany's risk management process for the period ended September 30, 2012.

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 majCanadian financial institution. As a result, there is no significant credit risk related to the Company's asseThe carrying amounts of this financial asset represent the maximum credit exposure.

Liquidity Risk

The Company ensures, including arranging a loan from a director, that there is sufficient capital in order to meshort-term business requirements after taking into account the Company's holdings of cash. The Compancash is held in major Canadian banks and their subsidiaries. As of the period ended September 30, 2012, tCompany had cash of $833 and thus the Company faces a liquidity risk.

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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, 2012, the Company held no financinstruments subject to foreign exchange rates.



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13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

(b) Risk (continued)

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changin market interest rates. The risk that the Company will realize a loss due to a change in interest rates is limitbecause the Company as at September 30, 2012, had no interest bearing financial assets or liabilities.

14. COMMITMENTS AND CONTRACTUAL OBLIGATIONS

The Company had no contractual or other obligations as at September 30, 2012.

15. SUBSEQUENT EVENTSOn October 15, 2012, the Company announced that Tawana and GMI have agreed to a further extension of tTawana Option to December 31, 2012. On October 30, 2012, Tawana announced the results of the lateapproximately 2,700 infill soil samples from Tawanas sampling and testing program and stated that it has nodefined and refined high-tenor +50ppb up to 1g/t Au soil anomalies within GMIs concession area in additiontrench intersections of 12m at 2.3 g/t including 4m at 6.25 g/t Au over now apparent lower priority soanomalies.

On November 5, 2012, the Company announced that it had received notice from the Exchange that effectivthe opening of trading on November 6, 2012, Vengas stock exchange listing would be transferred to tExchanges NEX Board as a consequence of the Companys failure to meet the Continued ListiRequirements as a Tier 2 issuer and hold a shareholders meetings pursuant to the Exchanges policies asecurities laws.

On November 9, 2012, the Company announced that it had received confirmation that the Ministry had rinstated GMIs mineral exploration licence for GMIs gold mining concessions in Sinoe County, Liberia.

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Interim Financial Statements - September 30, 2012 - SEDAR Final

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Transcript of Interim Financial Statements - September 30, 2012 - SEDAR Final