UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q
 
x   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended March 31, 2012
 
o   Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from to __________
 
Commission File Number: 333-149197
 
Vendum Batteries Inc.
 (Exact name of registrant as specified in its charter)
 
Nevada
 
39-2068976
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
400 Thames Valley Park Drive , Reading, Berkshire RG6 1PT
(Address of principal executive offices)
 
+44 118 380 0895
(Registrant’s telephone number)
 
 
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days o Yes x No*
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
o
Large accelerated filer Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
 
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  523,934,496 shares as of May 11, 2012
 
*Although the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act, it is voluntarily filing its annual and quarterly reports.
 
 
 

 
 
TABLE OF CONTENTS

   
Page
PART I – FINANCIAL INFORMATION
 
Item 1:
Financial Statements
1
Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
14
Item 3:
Quantitative and Qualitative Disclosures About Market Risk
 
Item 4:
Controls and Procedures
17 
 
PART II – OTHER INFORMATION
 
Item 1:
Legal Proceedings
18
Item 1A:
Risk Factors
18
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds
18
Item 3:
Defaults Upon Senior Securities
18
Item 4:
Mine Safety Disclosures
18
Item 5:
Other Information
18
Item 6:
Exhibits
18
 
 
 

 
 
PART I - FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
VENDUM BATTERIES INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2012

 
1

 

VENDUM BATTERIES INC.
 (A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS (unaudited)
AS OF MARCH 31, 2012 AND DECEMBER 31, 2011

ASSETS
 
March 31, 2012
   
December 31, 2011
 
Current Assets
           
Cash and cash equivalents
  $ 11,003     $ 1,843  
Deferred offering costs
    170,000       170,000  
Total Current Assets
    181,003       171,843  
                 
Other Asset
               
    Intellectual property
    0       0  
                 
Total Assets
  $ 181,003     $ 171,843  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Liabilities
               
Current Liabilities
               
Accrued expenses
  $ 233,298     $ 239,160  
Accrued expenses – related party
    46,359       46,359  
Accrued interest – related parties
    18,911       16,339  
Accrued interest
    7,550       6,710  
Due to director
    0       0  
Notes payable
    7,000       7,000  
Convertible notes payable – related parties
    75,000       75,000  
Convertible notes payable, net of debt discount
    142,000       96,167  
Derivative liability
    48,561       50,781  
                 
Total Liabilities
    578,679       537,516  
                 
Stockholders' Deficit
               
Common stock, par value $.001, 750,000,000 shares authorized, 523,934,496 shares issued and outstanding
    523,934       523,934  
Additional paid-in capital
    554,068       554,068  
Cumulative translation adjustment
    (4,813 )     (4,813 )
Deficit accumulated during the development stage
    (1,470,865 )     (1,438,862 )
Total Stockholders' Deficit
    (397,676 )     (365,673 )
                 
Total Liabilities and Stockholders' Deficit
  $ 181,003     $ 171,843  
 
See accompanying notes to financial statements.
 
 
2

 

VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011 (unaudited)
PERIOD FROM NOVEMBER 16, 2009 (INCEPTION) TO MARCH 31, 2012
 
   
Three months ended
March 31, 2012
   
Three months ended
March 31, 2011
   
Period from
November 16, 2009 (Inception) to
March 31, 2012
 
                   
REVENUES
  $ 0     $ 0     $ 0  
                         
OPERATING EXPENSES
                       
Professional fees
    1,500       2,500       119,376  
Consulting fees
    15,612       53,227       727,114  
General and administrative expenses
    2,866       7,468       49,353  
                         
TOTAL OPERATING EXPENSES
    19,978       63,195       895,843  
                         
NET LOSS FROM OPERATIONS
    (19,978 )     (63,195 )     (895,843 )
                         
OTHER INCOME (EXPENSE)
                       
Interest expense
    (3,412 )     (2,250 )     (26,461 )
Interest – amortization of debt discount
    (10,833 )     0       (96,696 )
Change in value of derivative liability
    2,220       0       48,135  
Impairment of intellectual property
    0       0       (500,000 )
TOTAL OTHER INCOME (EXPENSE)
    (12,025 )     (2,250 )     (575,022 )
                         
LOSS BEFORE PROVISION FOR INCOME TAXES
    (32,003 )     (65,445 )     (1,470,865 )
                         
PROVISION FOR INCOME TAXES
    0       0       0  
                         
NET LOSS
  $ (32,003 )   $ (65,445 )   $ (1,470,865 )
                         
NET LOSS PER SHARE: BASIC AND DILUTED
  $ (0.00 )   $ (0.00 )        
                         
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
    523,934,496       500,499,965          
 
See accompanying notes to financial statements.
 
 
3

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT (unaudited)
FOR THE PERIOD FROM NOVEMBER 16, 2009 (INCEPTION) TO MARCH 31, 2012

   
Common stock
   
Additional paid-in
   
Cumulative translation
   
Deficit
accumulated
during the development
       
   
Shares
   
Amount
   
Capital
   
Adjustment
   
Stage
   
Total
 
Inception, November 16, 2009
    -     $ -     $ -     $ -     $ -     $ -  
                                                 
Shares issued to founder
    14       2               -       -       2  
                                                 
Net loss and cumulative translation adjustment for the period ended December 31, 2009
    -       -               (3,577 )     (23,965 )     (27,542 )
Balance, December 31, 2009
    14       2       0       (3,577 )     (23,965 )     (27,540 )
                                                 
Shares cancelled in reverse merger
    (14 )     (2 )     2       -       -       0  
                                                 
Shares issued in merger
    8,500,023       608       (608 )     -       -       0  
                                                 
Shares issued on recapitalization
    1,098,786,657       78,543       (78,543 )     -       -       0  
                                                 
Shares cancelled by former officer
    (873,786,635 )     (62,459 )     62,459       -       -       0  
                                                 
Shares issued for conversion of debt
    33,750,013       2,413       72,587       -       -       75,000  
                                                 
Shares issued for conversion of debt
    232,749,907       16,637       473,363       -       -       490,000  
                                                 
Stock split
    -       64,258       (64,258 )     -       -       0  
                                                 
Shares issued for cash
    500,000       100       69,900       -       -       70,000  
                                                 
Stock split
    -       400,400       (400,400 )     -       -       0  
Net loss and cumulative translation adjustment for the period ended December 31, 2010
                            704       (635,376 )     (634,672 )
Balance, December 31, 2010
    500,499,965       500,500       134,502       (2,873 )     (659,341 )     (27,212 )
                                                 
Shares issued for consulting services
    5,000,000       5,000       240,000                       245,000  
                                                 
Shares issued for deferred offering costs
    1,220,156       1,220       168,780       -       -       170,000  
                                                 
Shares issued for conversion of debt
    17,214,375       17,214       10,786                       28,000  
Net loss and cumulative translation adjustment for the period ended December 31, 2011
                            (1,940 )     (779,521 )     (781,461 )
Balance, December 31, 2011
    523,934,496       523,394       554,068       (4,813 )     (1,438,862 )     (365,673 )
Net loss and cumulative translation adjustment for the period ended March 31, 2012
    -       -       -       -       (32,003 )     (32,003 )
Balance, March 31, 2012
    523,934,496     $ 523,934     $ 554,068     $ (4,813 )   $ (1,470,865 )   $ (397,676 )

See accompanying notes to financial statements.
 
 
4

 

VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
FOR THE PERIOD FROM NOVEMBER 16, 2009 (INCEPTION) TO MARCH 31, 2012

   
Three months ended March 31, 2012
   
Three months ended
March 31, 2011
   
Period from November 16, 2009 (Inception) to March 31, 2012
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss for the period
  $ (32,003 )   $ (65,445 )   $ (1,470,865 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Impairment of intellectual property
    0       0       500,000  
Shares issued for services
    0       0       245,000  
Amortization of debt discount
    10,833               96,696  
Change in fair value of derivative liability
    (2,220 )             (48,135 )
Changes in assets and liabilities:
                       
Increase (decrease in accrued expenses
    (5,862 )     36,879       233,298  
Increase (decrease) in accrued expenses – related party
    0       0       46,359  
Increase in accrued interest – related parties
                       
Increase in accrued interest
    3,412       2,250       26,461  
Cash Flows Used in Operating Activities
    (25,840 )     (26,316 )     (371,186 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Cash paid to acquire intellectual property
    0       0       (10,000 )
Cash Flows Used in Investing Activities
    0       0       (10,000 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Proceeds from (repayment to) due to director
    0       500       0  
Cash received for stock subscription receivable
    0       0       2  
Proceeds from convertible note payable
    0       65,000       285,000  
Proceeds from note payable
    35,000       0       42,000  
Proceeds from the sale of common stock
    0       0       70,000  
Cash Flows Provided by Financing Activities
    35,000       65,500       397,002  
                         
Exchange rate effect on cash and cash equivalents
    0       (1,884 )     (4,813 )
                         
Net Increase (decrease) in Cash and Cash Equivalents
    9,160       37,300       11,003  
Cash and cash equivalents, beginning of period
    1,843       21,766       0  
Cash and cash equivalents, end of period
  $ 11,003     $ 59,066     $ 11,003  
                         
SUPPLEMENTAL CASH FLOW INFORMATION:
                       
Interest paid
  $ 0     $ 0     $ 0  
Income taxes paid
  $ 0     $ 0     $ 0  
SUPPLEMENTAL NON-CASH TRANSACTIONS
                       
Stock issued for stock subscription receivable
  $ 0     $ 0     $ 0  
Note payable issued to acquire intellectual property
  $ 0       0     $ 490,000  
Convertible notes payable converted to common stock
  $ 0       0     $ 730,000  
Note payable settled in common stock
  $ 0     $ 0     $ 0  
Common stock issued for deferred offering costs
  $ 0     $ 0     $ 170,000  
Derivative liability and debt discount recorded in connection with convertible debt
  $ 0     $ 0     $ 96,696  

See accompanying notes to financial statements.
 
 
5

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Vendum Batteries Inc.  (the "Company" or “Vendum”) was incorporated in Nevada on December 13, 2006.  Vendum is an environmentally friendly mobile battery company with the sole focus on identifying, evaluating, acquiring, developing and partnering for the commercialization of proprietary eco-friendly power sources.

The accompanying unaudited interim financial statements have been prepared by Vendum Batteries Inc. (“Vendum” and the “Company”) pursuant to the rules and regulations of the United States Securities and Exchange Commission.  Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included.  Such adjustments consist of normal recurring adjustments.  These interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2011.  The results of operations for the three months ended March 31, 2012 are not indicative of the results that may be expected for the full year.

NOTE 2 – GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The Company has a working capital deficit, and has incurred losses since inception resulting in an accumulated deficit of $1,470,865 as of March 31, 2012, and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern.  The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock.

NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

Development Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States.

 
6

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)

Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.  All significant intercompany transactions and balances have been eliminated in consolidation.

Cash and Cash E q ui v a lents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $11,003 and $1,843 of cash as of March 31, 2012 and December 31, 2011 respectively.

Income Taxes
Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition
The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Foreign Currency Translation
The Company's functional currency is the Pound Sterling and its reporting currency is the United States dollar.

Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 and $0 during the periods ended March 31, 2012 and 2011, respectively.

Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has not adopted a stock option plan and has not granted any stock options.

Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.

 
7

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
 
NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)

Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2012.

Comprehensive Income
The Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances.  When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity.  Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Recent Accounting Pronouncements
Vendum does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

NOTE 4 – OFFERING COSTS

In accordance with ASC 505-10, “Costs of an Equity Transaction”, costs incurred to issue shares classified as equity, such as underwriting, accounting and legal fees, printing costs, and taxes, should be treated as a reduction of the proceeds. Direct costs incurred before shares classified as equity are issued may be classified as a reduction of equity or as an asset until the stock is issued. The Company entered into a contract on May 26, 2011 and issued 1,220,156 shares valued at $170,000 that have been classified as deferred offering costs as of March 31, 2012. The costs will be reclassified to equity issuance costs upon successful completion of the sale of the Company’s common stock.

NOTE 5 – INTELLECTUAL PROPERTY

On January 4, 2010 the Company entered into an asset purchase agreement with Cornerstone Holdings Ltd. The Company agreed to purchase intellectual property from the seller for total proceeds of $500,000.  The Company paid a $10,000 deposit on January 6, 2010.  The remaining $490,000 was to be paid in varying installments over the next 21 months.  The rights, title and interest of the intellectual property was transferred to the Company on the date of the first $10,000 payment. On May 3, 2010, the remaining $490,000 outstanding was converted into 232,749,907 shares of common stock of the Company.

The Company analyzed the intellectual property for impairment at December 31, 2010 and determined that the fair market value was $200,000.  As such, an impairment charge of $300,000 was recorded. The remaining balance of the intellectual property was deemed to be impaired as of March 31, 2012 and, accordingly, an impairment charge of $200,000 was recorded.
 
 
8

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 6 – ACCRUED EXPENSES

Accrued expenses at March 31, 2012 and December 31, 2011 consisted of the following:

   
2012
   
2011
 
Professional fees
  $ 16,163     $ 37,025  
Consulting fees
    217,135       202,135  
Total accrued expenses
  $ 233,298     $ 239,160  

NOTE 7 – ACCRUED EXPENSES – RELATED PARTY

Accrued expenses – related party consisted amounts due to an officer and shareholder of the Company for consulting services. There was $46,359 and $46,359 of accrued expenses – related party as of March 31, 2012 and December 31, 2011, respectively.

NOTE 8 – CONVERTIBLE NOTES PAYABLE – RELATED PARTIES

On December 10, 2009, a related party issued the company a 12% convertible note payable of $50,000. Interest will accrue beginning from the date of the loan however no interest is due until the loan comes due on December 10, 2010. On March 3, 2010 another $25,000 was loaned to the company under the same terms as the original loan. On May 3, 2010, the convertible loans of $75,000 were converted into 33,750,013 shares of common stock.

On May 18, 2010, the Company issued a 12% convertible note payable of $25,000 to a related party due September 3, 2011.

On July 26, 2010, the Company issued a 12% convertible note payable of $50,000 to a related party. Interest will accrue beginning from the date of the loan however no interest is due until the loan comes due on July 27, 2011.

The balance of the convertible notes to related parties as of March 31, 2012 and December 31, 2011 was $75,000 and $75,000, respectively.

Accrued interest payable related to the above loans totaled $18,589 and $16,359 at March 31, 2012 and December 31, 2011, respectively.

NOTE 9 – CONVERTIBLE NOTES PAYABLE

On March 23, 2011, the Company entered into a Securities Purchase Agreement with an accredited investor for the sale of a Convertible Promissory Note in the aggregate principal amount of $65,000. The net proceeds of the financing, after deducting placement agent fees, are to be used for general working capital purposes. The Notes bear interest at the rate of 8% per annum and matures on December 28, 2011. The Note is convertible into shares of our common stock beginning 180 days from the date of the Note at a conversion price of 60% of the average of the lowest three trading prices of the Company’s common stock during the ten trading days on the OTCBB proceeding the conversion date. The number of shares issuable upon conversion shall be proportionally adjusted to reflect any stock dividend, split or similar event.

Unless waived in writing by the Holder, the Company is prohibited from effecting the conversion of the Note to the extent that as a result of such conversion the Holder thereof would beneficially own more than 4.99% in the aggregate of the issued and outstanding common stock immediately after giving effect to the issuance of common stock upon conversion.

 
9

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 9 – CONVERTIBLE NOTES PAYABLE (CONTINUED)

While the Note is outstanding, the Holder is entitled to a reduction in the conversion price if we issue any securities for a per share price less than the conversion price in effect available to the Holder.

The loans may be converted into the Company’s common stock at any point during the term of the loan by the note holder. The number of shares to be issued will be determined by the fair market value of the common stock on the date of the conversion. If fair market value is not determinable at the conversion date the stock will be converted based on the lesser of either the share price of the
last private offering or the thirty day average of the Company’s stock in the event a public listing has taken place.

On May 3, 2011, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Holder”) for the sale of a Convertible Promissory Note (the “Note”) in the aggregate principal amount of $32,500. The net proceeds of the financing, after deducting placement agent fees, are to be used for our general working capital purposes. The Note bears interest at the rate of 8% per annum and matures on February 2, 2012. The Note is convertible into shares of our common stock beginning 180 days from the date of the Note at a conversion price of 58% of the OTCBB proceeding the conversion date. The number of shares issuable upon conversion shall be proportionally adjusted to reflect any stock dividend, split or similar event.
 
On September 21, 2011, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Holder”) for the sale of a Convertible Promissory Note (the “Note”) in the aggregate principal amount of $37,500. The net proceeds of the financing, after deducting placement agent fees, are to be used for our general working capital purposes. The Note bears interest at the rate of 8% per annum and matures on June 9, 2012. The Note is convertible into shares of our common stock beginning 180 days from the date of the Note at a conversion price of 58% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB proceeding the conversion date. The number of shares issuable upon conversion shall be proportionally adjusted to reflect any stock dividend, split or similar event.

The Company accounts for the fair value of the conversion features in accordance with ASC 815-15, “Derivatives and Hedging; Embedded Derivatives. ASC 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company valued the embedded derivative using the Black-Scholes pricing model. The Company valued the embedded derivative 180 days after the issuance of the notes per the terms of the convertible notes payable. The embedded derivative related to the note issued on March 23, 2011 was valued at $64,196. The embedded derivative related to the note issued on May 3, 2011 was valued at $32,500. The debt discounts are amortized over the remaining term of the loans, in these cases, three month. The balance of the debt discount was $10,833 as of March 31, 2012.

During the year ended December 31, 2011, the Company converted $28,000 of the March 23, 2011 note into 17,214,375 shares of common stock.

The balance of the convertible notes payable was $142,000 as of March 31, 2012. Accrued interest related to these notes was $7,607 as of March 31, 2012.

 
10

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 9 – CONVERTIBLE NOTES PAYABLE (CONTINUED)

On February 23, 2012, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Holder”) for the sale of a Convertible Promissory Note (the “Note”) in the aggregate principal amount of $35,000. The net proceeds of the financing, after deducting placement agent fees, are to be used for our general working capital purposes. The Note bears interest at the rate of 12% per annum and matures on February 24, 2013. The Note is convertible into shares of our common stock at the fair market value  of the shares at the date of conversion.

NOTE 10 – NOTE PAYABLE
 
On March 31, 2011, the Company issued a note payable for proceeds of $7,000 to help fund operations. The note was due on April 30, 2011, bears 5% interest and is unsecured. The note is in default as of March 31, 2012. Accrued interest related to this note was $265 as of March 31, 2012.

NOTE 11 – DUE TO DIRECTOR

A director and shareholder of the Company advanced $505 to Vendum during the period ended December 31, 2010. The amount was unsecured, non-interest bearing and due on demand. The loan was repaid during the year ended December 31, 2011.

NOTE 12 – CAPITAL STOCK

The Company has 750,000,000 shares of $0.001 par value common stock authorized.

On November 17, 2009, the Company issued 1 share of common stock for total proceeds of $2.  As of December 31, 2009 the proceeds had not been collected. The funds for the stock were deposited into the company bank account on March 4, 2010.

In a share exchange transaction that closed on May 3, 2010, Wishart acquired all the issued and outstanding shares of Vendum Batteries Limited through the issuance of 8,500,023 shares of Wishart. The Company treated the purchase of Vendum Batteries Limited as a reverse acquisition pursuant to the guidance in Appendix B of SEC Accounting Disclosure Rules and Practices Official Text. Accordingly, these transactions are recorded as capital transactions in substance rather than business combinations.

Therefore, the transaction is equivalent to the issuance of stock by the private company for the net monetary assets of Wishart, accompanied by a recapitalization. Accordingly, the reverse acquisition has been accounted for as a recapitalization.  

For accounting purposes, Vendum is considered the acquirer in the reverse acquisition.  The historical financial statements are those of Vendum consolidated with the parent, Wishart Enterprises, Inc. Earnings per share for periods prior to the merger are restated to reflect the number of equivalent shares received by the acquiring company.

On May 3, 2010, the Company agreed to convert a note payable of $490,000 into 232,749,907 shares of common stock.

Also on May 3, 2010, the Company converted two convertible notes payable totaling $75,000 into 33,750,013 shares of common stock.
 
 
11

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 12 – CAPITAL STOCK (CONTINUED)

On November 1, 2010, the Company issued 500,000 common shares of stock for $70,000 cash.

On May 24, 2010, the Company completed an approximately 3:1 forward stock split.

On November 29, 2010, the Company completed a 5:1 forward stock split and increased its authorized share capital to 750,000,000 shares of common stock.

All share information presented in these financial statements and accompanying footnotes have been retroactively adjusted to reflect the increased number of shares resulting from these actions.

In July 2011, the Company issued 5,000,000 shares of common stock to two consultants. The stock is restricted and due to the lack of marketability was issued at a 30% discount on the fair value. The 5,000,000 shares were valued at $245,000.
 
During the year ended December  31, 2011, the Company converted $28,000 of the March 23, 2011 note into 17,214,375 shares of common stock.
 
The Company entered into an Investment Agreement with Centurion Private Equity, LLC (“Centurion”) on June 3, 2011.  Pursuant to the Investment Agreement, Centurion committed to purchase up to $5,000,000 of our common stock, over a period of time terminating upon 36 months from the date of the Investment Agreement, subject to an effective registration statement covering the resale of the common stock and subject to certain conditions and limitations set forth in the Investment Agreement, including limitations based upon the trading volume of the Company’s common stock. The maximum aggregate number of shares issuable by us and purchasable by Centurion under the Investment Agreement is that number of shares of common stock having an aggregate purchase price of $5,000,000.  In conjunction with the signing of the agreement, the Company issued 1,220,126 shares with deemed value of $170,000 for document and commitment fees.

There were 523,934,496 shares of common stock issued and outstanding as of March 31, 2012 and December 31, 2011.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge.  There is no obligation for the officer to continue this arrangement.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.  The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 
12

 
 
VENDUM BATTERIES INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012

NOTE 14 – INCOME TAXES

As of March 31, 2012, the Company had net operating loss carry forwards of approximately $1,471,000 that may be available to reduce future years’ taxable income through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

The provision for the Federal income tax consists of the following for the years ended March 31, 2012 and 2011:
 
   
2012
   
2011
 
Federal income tax benefit attributable to:
           
Current operations
  $ 10,881     $ 22,250  
Less: valuation allowance
    (10,881 )     (22,250 )
Net provision for Corporation income taxes
  $ 0     $ 0  
 
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of March 31, 2012 and December 31, 2011:

   
2012
   
2011
 
Deferred tax asset attributable to:
           
Net operating loss carryover
  $ 500,094     $ 489,176  
Less: valuation allowance
    (500,094 )     (489,176 )
Net deferred tax asset
  $ 0     $ 0  

NOTE 15 – SUBSEQUENT EVENTS
 
In accordance with ASC 855-10, the Company   has analyzed its operations subsequent to March 31, 2012 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 
13

 
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
 
Results of Operations for the three months ended March 31, 2012 and March 31, 2011  

We generated no revenue for the period from November 16, 2009 (Date of Inception) until March 31, 2012. Without revenues, we are forced to rely on fundraising activities in order to continue as a going concern. If we are unable to generate revenues or raise funds in the near future, we will be forced to consider other business opportunities or cease operations.
 
Our operating expenses decreased to $19,978 for the three months ending March 31, 2012, as compared with $63,195   for the same period ended 2011. The decrease in our operating expenses for the three month period is largely due to a decrease in consulting fees attributed to the waiver by our former Chief Executive Officer who was the Chief Executive Officer during the quarter of certain compensation due to him.
 
Our net loss decreased for the comparative three month periods and was $32,003 for the three months ending March 31, 2012, as compared with $65,445   for the same period ended 2011. The decrease in net loss is directly attributed to the decrease in operating expenses.
 
Liquidity and Capital Resources
 
The financial statements have been prepared on a going concern basis which assumes our company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  We have a working capital deficit, and have incurred losses since inception resulting in an accumulated deficit of $1,470,865 as of March 31, 2012, and further losses are anticipated in the development of our business, raising substantial doubt about our company’s ability to continue as a going concern.  The ability to continue as a going concern is dependent upon our company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private placement of common stock.

As of March 31, 2012, we had total current assets of $181,003 consisting of cash and cash equivalents and total assets in the amount of $181,003. We had current liabilities in the amount of $578,679 as of March 31, 2012. Thus, we had a working capital deficit of ($397,676) as of March 31, 2012.
 
Cash flows used in operating activities was ($25,840) for the three months ended March 31, 2012 and was mostly attributed to our change in fair value of derivative liability and net loss. Financing activities during the three months ended March 31, 2012 generated $35,000 in cash during the period, which was due to a note payable.
 
On March 23, 2011, we entered into a Securities Purchase Agreement with an accredited investor for the sale of a promissory note in the aggregate principal amount of $65,000 (the “March Note”). Additionally, on May 3, 2011, we entered into a Securities Purchase Agreement with an accredited investor for the sale of a promissory note in the aggregate principal amount of $32,500 (the “May Note”). On September 21, 2011, we entered into a Securities Purchase Agreement with an accredited investor for the sale of a promissory note in the aggregate principal amount of $37,500 (the “September Note,” and together with the March Note and the May Note, the “Notes”). The net proceeds of these financings, after deducting placement agent fees, are to be used for general working capital purposes.  The March Note bears interest at the rate of 8% per annum and matures on December 28, 2011. The May Note bears interest at a rate of 8% and matures on February 2, 2012. The September Note bears interest at a rate of 8% and matures on June 9, 2012.  The March Note is convertible into shares of our common stock beginning 180 days from the date of the March Note at a conversion price of 60% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB proceeding the conversion date. The May Note is convertible into shares of our common stock beginning 180 days from the date of the May Note at a conversion price of 58% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB proceeding the conversion date. The number of shares issuable upon conversion shall be proportionally adjusted to reflect any stock dividend, split or similar event. The September Note is convertible into shares of our common stock beginning 180 days from the date of the September Note at a conversion price of 55% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB proceeding the conversion date. The number of shares issuable upon conversion shall be proportionally adjusted to reflect any stock dividend, split or similar event. We are only entitled to prepay the Notes from the date of the Notes until 90 days thereafter at 150% of the outstanding principal balance, accrued and unpaid interest, default interest, and other amounts required under the Notes, so long as the holders of the Notes have not elected to convert the Notes into our common stock.  We are only entitled to prepay the Notes 91 days from the date of the Notes up to 180 days from the date of the Notes at 175% of the outstanding principal balance, accrued and unpaid interest, default interest, and other amounts required under the Notes. We have no right to prepay the Notes after 180 days from the date of the Notes. Unless waived in writing by the holders of the Notes, we are prohibited from effecting the conversion of the Notes to the extent that as a result of such conversion the holders thereof would beneficially own more than 4.99% in the aggregate of our issued and outstanding common stock immediately after giving effect to the issuance of common stock upon conversion. While the Notes are outstanding, the holder is entitled to a reduction in the conversion price if we issue any securities for a per share price less than the conversion price in effect available to the holder. Under each Securities Purchase Agreement, the holder is entitled to a right of first refusal on any subsequent equity offerings (or debt offerings with an equity component) that we may engage in for a period of one year.
 
 
14

 
 
For so long as we have any obligation under the Notes, we agreed to certain restrictions on our ability to declare dividends, repurchase our capital stock, borrow money, sell our assets, or advance loans to others.  The Notes contain events of default which, if triggered, will result in the requirement to pay a default amount as specified in the Notes.  The default amount depends on the particular event of default.  In some cases, the amount we would owe the holder could be two times the sum of the outstanding principal balance of the Notes, accrued and unpaid interest, default interest (at 22% per annum), and other amounts required under the Notes.  In other cases, the amount we would owe the holder would be 150% of the sum of the outstanding principal balance of the Notes, accrued and unpaid interest, default interest, and other amounts required under the Notes.  Other cases elicit other default amounts as provided under the Notes.  The Notes also provide for an option for the holder to take the default amount in shares of our common stock under a formula provided in the Notes in lieu of a cash payout.

In June 2011, we entered into the Investment Agreement with Centurion for the provision of the Equity Line of up to $5,000,000. Pursuant to the terms and conditions of the Investment Agreement, we may sell newly issued shares of our common stock to Centurion (each such sale, a “put”) from time to time at a price equal to the lesser of : (i) 96% of the Market Price (as defined below) of our common stock ; or (ii) the Market Price of our common stock minus $0.01, subject to certain dollar and share volume limitations for each put, until the earlier of : (a) 36  months from the date of the Investment Agreement ; or (b) until all puts under the Investment Agreement have reached an aggregate gross sales price equal to $5,000,000. Each put amount is limited to $250,000 provided further that the number of shares sold in each put shall not exceed a share volume limitation equal to the lesser of: (i)   1.5 million shares; (ii) 17.5% of the aggregate trading volume, excluding any block trades that exceed 50,000 shares of common stock, of the common stock traded on our primary exchange during any pricing period for such put excluding any days where the lowest intra-day trade price is less than the trigger price (which is the greater of : (a ) the floor price plus a fixed discount of the lesser of $.01 ; (b ) the floor price if any set by us divided by 0.96 ; or ( c ) $.01, the greater of all three clauses being referred to as the “Trigger Price”); (iii) an aggregate of $5,000,000 worth of common stock when combined with the put shares sold in all prior puts; or (iv) such number of put shares that when added to the number of shares of our common stock then beneficially owned by Centurion would exceed 9.9% of the number of shares of our common stock outstanding. The Investment Agreement provides that prior to exercising any put we must have a registration statement declared effective with respect to the shares to be sold under the Equity Line. “Market Price” means the average of the three lowest daily volume weighted average prices published daily by Bloomberg LP for our common stock during the fifteen consecutive trading day period immediately following the date specified by us on which we intend to exercise the applicable put. In connection with the preparation of the Investment Agreement and the registration rights agreement, we issued Centurion 128,453 shares of common stock as a document preparation fee having a value of $20,000 and 1,091,703 shares of our common stock as a commitment fee having a value of $150,000.
 
On February 23, 2012, we issued a note in the principal amount of $35,000 to an investor (the “2012  Note”). The 2012 Note bears interest at the rate of 12% per annum and matures on February 24, 2013. The 2012 Note bears interest at a rate of 12% and matures on February 24, 2013. The 2012 Note is convertible into shares of our common stock based on the fair value of the common stock on the date of conversion.  Fair value is defined as the share price of the last offering of common stock or the 30 day average of the common stock in the event a public listing of the common stock has taken place.

 
15

 

Despite our recent financings, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements such as the Equity Line; however there can be no assurance that we will meet the conditions necessary to be able to use the Equity Line. Other than the Equity Line, we do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that any additional financing will be available to us on acceptable terms, or at all.
 
Set forth below is a chart of our outstanding debt obligations as of March 31, 2012:
 
Original Principal Amount
 
Maturity Date
 
Features
$50,000 of which $37,000 remains outstanding
 
July 27, 2011
 
Interest rate 12%
Convertible into shares of our common stock determined by the lesser of our share price of our last private offering or the 30 day average of our trading stock
         
$65,000
 
December 28, 2011
 
Interest rate 8%
Convertible into shares of our common stock beginning 180 days from the date of the note at a conversion price of 60% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB preceding the conversion date
         
$32,500
 
February 2, 2012
 
Interest rate 8%
Convertible into shares of our common stock beginning 180 days from the date of the note at a conversion price of 58% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB preceding the conversion date
         
$25,000
 
September 3, 2011
 
Interest rate 12 %
         
$7,000
 
April 30, 2011
 
Interest rate 5%
         
$37,500
 
June 9, 2012
 
Interest rate 8%
Convertible into shares of our common stock beginning 180 days from the date of the note at a conversion price of 55% of the average of the lowest three trading prices of our common stock during the ten trading days on the OTCBB preceding the conversion date.
         
$35,000
 
February 24, 2013
 
Interest rate 12%
Convertible into shares of our common stock at a conversion price of the fair value of our common stock on the date of conversion.  Fair value is defined as the share price of the last offering of common stock or the 30 day average of the common stock in the event a public listing of the common stock has taken place.

Recent Developments

On April 25, 2012, the Company appointed Mr. Rune Vind to its Board of Directors. Mr. Vind was not selected as a director pursuant to any arrangement or understanding with any other person, and does not have any reportable transactions under Item 404(a) of Regulation S-K.

On April 26, 2012, the Company received written notice of the resignation of Fraser Cottington as President, Chief Executive Officer, Chief Financial Officer and a director of the Company, effective as of April 26, 2012.  

On April 26, 2012, the Board of Directors appointed Rune Vind to be President, Chief Executive Officer and Chief Financial Officer of the Company to fill the outstanding vacancies.  Mr. Vind was not selected as President, Chief Executive Officer and Chief Financial Officer pursuant to any arrangement or understanding with any other person, and does not have any reportable transactions under Item 404(a) of Regulation S-K.

 
16

 
 
Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are set forth in Note 3 of the financial statements.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
 
Off Balance Sheet Arrangements

As of March 31, 2012, there were no off balance sheet arrangements.
  
Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are set forth in Note 3 of the financial statements.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.  
 
Item 4.
Controls and Procedures
 
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2012. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer who is also our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer who is also our Chief Financial Officer concluded that, as of March 31, 2012, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
 
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2012, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and Securities and Exchange Commission guidelines.
 
Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting
 
Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2012: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
 
We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees. In January 2011, we hired an outsourced controller to improve the controls for accounting and financial reporting.
 
Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control over financial reporting during the three months ended March 31, 2012 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.
 
 
17

 
 
  PART II – OTHER INFORMATION
 
Item 1. 
Legal Proceedings
 
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
 
Item 1A. 
Risk Factors

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
On February 23, 2012, we issued a promissory note in the principal amount of $35,000 that bears interest at the rate of 12% and matures February 24, 2013. This issuance of securities qualified for exemption under Section 4(2) of the Securities Act and Regulation D thereunder since the issuance did not involve a public offering. The issuance was not a public offering as defined in Section 4(2) because the offer and sale was made to an insubstantial number of persons and because of the manner of the offering. The issuance was done with no general solicitation or advertising by us. Based on an analysis of the above factors, our company has met the requirements to qualify for exemption under Section 4(2) of the Securities Act for the issuance.
 
Item 3.
Defaults upon Senior Securities
 
None
 
Item 4.
Mine Safety Disclosures
 
Not applicable
 
Item 5.
Other Information
 
None  
 
Item 6.
Exhibits
 
Exhibit
Number
 
Description of Exhibit 
     
4.1
 
Promissory Note, dated February 23, 2012, in the principal amount of $35,000*
     
31.1
 
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
 
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
 
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 *Filed herewith.

**+101.INS XBRL Instance Document (15)
 
**+101.SCH XBRL Taxonomy Extension Schema Document (15)
 
**+101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (15)
 
**+101.DEF XBRL Taxonomy Extension Definition Linkbase Document (15)
 
**+101.LAB XBRL Taxonomy Extension Label Linkbase Document (15)

  **+101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (15)
 
 
18

 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
VENDUM BATTERIES INC.
     
Date: May 18, 2012
By:
/s/ Rune Vind
   
Name: Rune Vind
   
Title: Chief Executive Officer and Director
(Principal Executive Officer and Principal Accounting Officer)
 
    
19
Exhibit 4.1
 
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
 
VENDUM BATTERIES
12% CONVERTIBLE PROMISSORY NOTE
 
 
$35,000,00  February 23, 2012
 
1 . Principal and Interest.
 
(a)   Vendum Batteries Inc. (the "Company"), for value received, hereby promises to pay to the order of Kira S.A. (the "Investor" or the "Holder") the sum of Thirty Five Thousand USD ($35,000.00).
 
(b)   This 12% Convertible Promissory Note (the "Convertible Note") shall bear interest from the date of issuance of this Convertible Note until paid in full at the rate of 12% per annum.
 
This Convertible Note, including principal and accrued interest thereunder, shall be payable in full by February 24, 2013 (the "Demand Date).
 
(c)   Upon payment in full of the principal and bonus payment this Convertible Note shall be surrendered to the Company for cancellation.
 
(d)   The principal and interest payments due under this Convertible Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.
 
2. Attorney's Fees. If the indebtedness represented by this Convertible Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Convertible Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and bonus payment payable hereunder, reasonable attorneys' fees and costs incurred by the Investor.
 
3. Conversion.
 
3.1 Voluntary Conversion. The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal and accrued interest hereunder into a number of fully paid and non-assessable whole shares of the Company's par value common stock ("Common Stock") determined in accordance with Section 3.2 below.
 
 
 

 
 
3.2 Shares Issuable, The number of whole shares of Common Stock info which this Convertible Note may be voluntarily converted during such specified periods of time (the "Conversion Shares") shall be determined by the Fair Market Value of the Common Stock at the date of conversion (the "Note Conversion Price"). For the avoidance of doubt Fair Market Value shall he:
 
a. The share price at the last private offering of the Common Stock or
b. The 30 day average of the Common Stock in the event a public listing of the Common Stock has taken place.
 
3.3 Notice and Conversion Procedures. If the Holder elects to convert this Convertible Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Convertible Note. Within twenty (20) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) for the Common Stock issuable upon such conversion and, if the entire principal amount hereunder was not so converted, a new Convertible Note representing such balance.
 
3.4 Common Stock. Whenever reference is made in this Convertible Note to the shares of Common Stock. The term "Common Stock" shall mean the Common Stock of the Company authorized as of the date hereof Shares issuable upon conversion hereof shall include only shares of Common Stock of the Company.
 
3.5 No Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note_ in lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Convertible Note, the Company shall pay cash to the Holder in the amount outstanding hereunder that is not so converted.
 
3.6 Repayment. This Convertible Note, including principal and accrued interest thereunder, may be repaid by the Company at any time_ if the Company elects to redeem this Convertible Note, the Company shall provide the Holder with a thirty day written notice of redemption. The notice must be delivered to the Holder.
 
4. Representations. Warranties and Covenants of the Company. The Company represents warrants and covenants with the Holder as follows:
 
(a) Authorization, Enforceability. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Convertible Note and the performance of all obligations of the Company hereunder has been taken, and this Convertible Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its tents except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors . ' rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
 
(b) Governmental Consents. No Consent, approval, qualification, order or authorization of, or filing with, any Local, state or federal governmental authority is required on the part of the Company in connection with the Company's valid execution, delivery or performance of this Convertible Note except any notices required to be filed with the Securities and Exchange Commission,. or such filings as may he required under applicable state securities laws, which, if applicable, will be timely filed within the applicable periods therefor.
 
 
 

 
 
(c) No Violation. The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.
 
5. Representations and Covenants of the Holder. The Company has entered into this Convertible Note in reliance upon the following representations and covenants of the Holder:
 
( a ) Investment Purpose. This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.
 
( b ) Private Issue. The Holder understands (i) that this Convertible Note and the Common Stock issuable upon conversion of this Convertible Note are not registered under the Securities Act of 1933 as amended (the "1933 Act") or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 8.
 
( c ) Financial Risk. The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment
 
( d ) Risk of No Registration. The Holder understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934 the "1934 .Act"), or file reports pursuant to Se c tion 15(d) of the 1934 Act, or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell the Common Stock issuable upon conversion of the Convertible Note, it may be required to hold such securities for an indefinite period. The Bolder also understands that any sale of the Convertible Note or the Common Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.
 
 
 

 
 
6. Assignment. Subject to the restrictions on transfer described in Section 9 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the succesors,  assigns, heirs, administrators and transferees of the parties.
 
7.   Waiver and Amendment . Any provision of this Convertible Note may be amended, waived or modified upon the written consent of the Company and the Holder.
 
8 . Transfer of This Note or Securities  Issuable on Conversion Hereof,  With respect to any offer, sale or other disposition of this Note or securities into which this Convertible Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof. Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company's ability to account for future transactions to which it is a party as a pooling of interests, and notifies the Holder thereof within five (.5) business days after receiving notice of the transfer, the Holder may effect such transfer. The Convertible Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.
 
9 . Notices. Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or three (3) business days after deposit if deposited in the Canada's mail for mailing by certified mail, postage prepaid, and addressed as follows:
 
If to investor: Kira S.A.
  Trust Co Complex
  Ajeltake Road, Ajeltake Island
  MH96960 Majuro
  Marshall Islands
If to Company: Vendum Batteries Inc.
  Accounting Worx Suite, 400 Thames Valley Park
  Drive, Reading, RG6 1PT
 
Each of the above addressees may change its address for purposes of this Section by giving to the other addressee notice of such new address in conformance with this Section.
 
10 . Governing Law. This Convertible Note is being delivered in and shall be construed in accordance with the laws of the State of Nevada, USA, without regard to the conflicts of laws provisions thereof.
 
11 . Heading References, All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except as otherwise indicated, all references herein to Sections refer to Sections hereof
 
12. Waiver by the Company. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
 
 
 

 
 
13. Delays. No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right,
 
14 . Severability . If one or more provisions of this Convertible Note are held to be unenforceable under applicable law, such provision shall be excluded from this Convertible Note and the balance of the Convertible Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.
 
15. No Impairment, The Company win not, by any voluntary action, avoid or seek to avoid the observance or performance or any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Convertible Note against impairment,
 
 
 
THIS PART IS INTENTIONALLY BLANK
 
 
 

 
 
IN WITNESS WHEREOF, Vendum Batteries Inc. has caused this Convertible Note to be executed in its corporate name and this Convertible Note to be dated, issued and delivered, ail on the date first above written.
 
 
 
VENDUM BATTERIES INC.     Kira S.A.  
         
         
/s/ Fraser Cottington
   
/s/ Geoffrey Long
 
By: Fraser Cottington
   
By: Geoffrey Long
 
President
   
Authorized Signatory
 
 
 
 
 
 
 
 
Exhibit 31.1
 
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
 I, Rune Vind, certify that:
  
   
1.
 
I have reviewed this quarterly report on Form 10-Q of Vendum Batteries Inc.;
     
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
4.
 
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     
 
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that  material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
 
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.
 
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     
 
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
 
Date: May 18, 2012
 
  
By:  /s/Rune Vind                   
 
Name: Rune Vind
 
Title: Chief Executive Officer
 
(Principal Executive Officer) 
EXHIBIT 31.2
 
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
        
 I, Rune Vind, certify that:
     
1.
 
I have reviewed this quarterly report on Form 10-Q of Vendum Batteries Inc.;
     
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
4.
 
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
     
 
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that  material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
 
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
 
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
 
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.
 
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
     
 
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
 
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 
 
Date: May 18, 2012
 
  
By: /s/ Rune Vind                     
 
Name: Rune Vind
 
Title: Chief Financial Officer
 
(Principal Financial Officer and Principal Accounting Officer) 
EXHIBIT 32.1
 
CERTIFICATION CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
       Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Vendum Batteries Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that: 
   
(1)
the accompanying Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
   
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Date: May 18, 2012
 
 By:  
/s/ Rune Vind                        
 
Name: Rune Vind
 
Title: Chief Executive Officer
and Chief Financial Officer
(Principal Executive Officer and Principal Accounting Officer)