UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 
 (Mark One)x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2009OR ̈
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 For the transition period from                              to
 
 Commission file number: 000-31585
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (Name of Small Business Issuer)
 
 Delaware

06-1579927(State or Other Jurisdiction

(IRS Employer Identification No.)of Incorporation)45 Rockefeller Plaza, Suite 2000New York, NY

10111(Address of Principal Executive Offices)

(Zip Code)(212) 332-8016(Issuer’s Telephone Number, Including Area Code)
 
 Securities registered under Section 12(b) of the Exchange Act:None
 
 Securities registered under Section 12(g) of the Exchange Act: Common Stock
 
 Title of Each Class

Name of Each Exchange

on Which RegisteredCommon Stock, par value $.001

None
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ̈ No x
 
 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- K or any amendment to this Form 10-K.  ̈
 
 Issuer’s revenues for its most recent fiscal year were: $0.
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12-2 of the Exchange Act.
  Large accelerated filer   ̈
Accelerated filer   ̈Non-accelerated filer   ̈
Smaller reporting company  x(Do not check if a smaller reporting company)
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 Yes      ̈       No   x
 
 The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold as of May 3, 2011 is $7,422,925.
 
 The number of shares outstanding of the Company’s common stock, as of May 4, 2011 is 403,414,907.
 
 Transitional Small Business Disclosure Format (check one): Yes  ̈    No x
  
  
 
 TABLE OF CONTENTS
 
 DESCRIPTION OF BUSINESS
3DESCRIPTION OF PROPERTY
8LEGAL PROCEEDINGS
10SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
10MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
10MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
13INDEX TO FINANCIAL STATEMENTS
17FINANCIAL STATEMENTS
17CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
32CONTROLS AND PROCEDURES
32DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
34EXECUTIVE COMPENSATION
35SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
36CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
38PRINCIPAL ACCOUNTANT FEES AND SERVICES
39EXHIBITS AND REPORTS ON FORM 8-K
39SIGNATURES
40
  2
 
 PART I
 
 This Annual Report on Form 10-K and the information incorporated by reference includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Various statements, estimates, predictions, and projections stated under “Risk Factors,” “Management’s Discussion and Analysis or Plan of Operations” and “Business,” and elsewhere in this Annual Report are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements appear in a number of places in this Annual Report and include statements regarding the intent, belief or current expectations of Diamond Discoveries International or our officers with respect to, among other things, the ability to successfully implement our acquisition and exploration strategies, including trends affecting our business, financial condition and results of operations. While these forward-looking statements and the related assumptions are made in good faith and reflect our current judgment regarding the direction of the related business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. These statements are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control and reflect future business decisions which are subject to change. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect our results. Some important factors (but not necessarily all factors) that could affect our revenues, growth strategies, future profitability and operating results, or that otherwise could cause actual results to differ materially from those expressed in or implied by any forward-looking statement, include the following:
 
 • our ability to successfully implement our acquisition and exploration strategies;
 • the success or failure of our exploration activities and other opportunities that we may pursue;
 • changes in the availability of debt or equity capital and increases in borrowing costs or interest rates;
 • changes in regional and national business and economic conditions, including the rate of inflation;
 • changes in the laws and government regulations applicable to us; and
 • increased competition.
 
 Stockholders and other users of this Annual Report on Form 10-K are urged to carefully consider these factors in connection with the forward-looking statements. We do not intend to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
 
 Item 1. Description of Business
 
 We were incorporated in the State of Delaware on April 24, 2000. We are an exploration stage company that is engaged in the acquisition and exploration of mineral properties. Our initial focus is in the area of the Torngat fields located in the province of Quebec, Canada. Other than contracting with third parties to conduct exploration and gather data on our behalf, we have conducted no operations to date and do not expect to receive any revenues for at least the next two years. During the next two years we plan to continue to concentrate our efforts on exploration and data gathering. During the next two years we will be solely dependent on the availability of external financing to fund our operations. Our independent public accountants expressed substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital. If we are unable to secure adequate financing we will be unable to continue our exploration and data gathering efforts. Because we are an exploration stage company, we do not know if a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before the economic and legal feasibility of developing the properties can be determined.
 
 Acquisition Agreements
 
 Caribou Property
 
 On March 17, 2008, we entered into an acquisition agreement with Messrs. Bertrand Brassard and Michel Lavoie.  Pursuant to such agreement, we acquired certain mineral rights in property located in the Thetford Mines area, part of the Appalachian Belt, Province of Quebec, Canada. The total consideration of $205,000, of which $75,000 represents the amount paid in cash and $130,000 represents the fair value of a total of 10,000,000 shares of the Company’s common stock issued to Messrs. Brassard and Lavoie.  The exchange of shares for the permits was a non-cash transaction that is not reflected in the accompanying statement of cash flows for the year ended December 31, 2008 and for the period from April 24, 2000 to December 31, 2008.
 
 In connection with the acquisition of these mineral rights, the Company agreed to pay the sellers a 2% royalty on the “net smelter returns” of the property. Net smelter returns are determined by the net amount received from the production of all metals and/or minerals from the property. The Company has the right to purchase, at any time prior to the beginning of any commercial production on the property, 1% royalty on the “net smelter returns” for a total cash payment of $1,000,000.
  3
  Torngat Property
 
 On September 12, 2000, we entered into an acquisition agreement with Messrs. Peter Ferderber and Stanley G. Hawkins, and Tandem Resources Ltd., a Canadian mineral exploration company of which Mr. Hawkins is the President. Pursuant to such Agreement, we acquired certain mineral exploration permits covering an area of approximately 469.05 square kilometers in the Torngat fields, which are located on the east coast of Ungava Bay, in the northwestern part of Quebec. The Torngat fields are one of four fields in Quebec that contain diamondiferous kimberlite formations. The Torngat fields are composed of a central plateau about 400 meters above sea level, and are broken by steep-sided gorges and fjords along the coast. The largest of these features, Alluviaq Fjord, bisects the property covered by the permits. Several dykes in the area are well exposed sub-vertical features in the Alluviaq Fjord, and display horizontal and vertical continuity. These traits result from rock being pushed up from below the surface, into a vertical position against other horizontal rocks. Geologists usually identify these rock formations as strong targets for the presence of diamonds.
 
 The consideration paid under the Acquisition Agreement was 1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins, and the payment of $35,000 Canadian to Mr. Hawkins and $25,000 Canadian to Mr. Ferderber. We also assigned to Messrs. Ferderber and Hawkins a one per cent (1%) interest in the “Net Smelter Returns” of the property, one half of which is payable over the first $50 million Canadian in revenues from the property. (Net Smelter Returns are determined by the net amount of money received from the sale of ore, or ore concentrates or other products from a property to a smelter or other ore buyer.) Once Messrs. Ferderber and Hawkins have received $10 million Canadian from these Net Smelter Returns, their interest terminates. Tandem Resources Ltd. received an option to purchase 40% of the mineral rights on the properties. This option is conditioned on a number of events occurring, which are:
 
 (1) The expenditure by us of $5 million Canadian on exploration of the property;
 (2) Tandem paying us $2 million Canadian; and
 (3) Tandem and us entering into a joint venture agreement to operate the property, within 60 days of a demonstration by us of the expenditure of $5 million Canadian on exploration of the property.
 
 In addition, we will have twenty-one (21) days from the date we notify Tandem that we have made the $Cdn5 million exploration expenditure, to negotiate a financing agreement with Tandem to provide Tandem with the $Cdn2 million required to exercise the option. Should no agreement be reached in such 21-day period, our right to provide this financing shall expire.
 
 Based upon an analysis of samples taken from these properties, we believe that the properties for which we have exploration permits contain kimberlite.  Kimberlite is a type of igneous rock that occasionally contains tiny to extremely tiny diamonds, and on very rare occasions contains gem quality diamonds.  Certain samples taken from our properties have contained both macro diamonds and micro diamonds.  Samples from most of the dykes contain diamond fragments as well.
 
 Prospecting Geophysics Ltd., a Quebec-based firm of which Mr. Ferderber is President, has provided us with a Progress Report, dated August 29, 2000, which discusses these samples, which they had collected. Prospecting Geophysics Ltd. has been contracted to conduct further surveys and exploration on this property.
 
 Mr. Ferderber is the record owner of the property covered by the permits, which he has transferred to us. He had originally executed an agreement, as of June 20, 2000, transferring the right to explore the properties covered by the permits to us. This June 20, 2000 agreement was subsequently incorporated into the Acquisition Agreement discussed above. We have received an opinion of Lavery, de Billy, a firm of barristers and solicitors of Montreal, Canada, dated July 10, 2000, that Mr. Ferderber is the record owners of the permits under the Mining Act (Quebec), and that the permits are in good standing as of June 21, 2000. The opinion further states that at the date of examination, there were no liens, charges or encumbrances registered against any of the permits. The opinion disclaimed any physical verification of the location of the properties covered by the permits, and states that no survey of the area covered by the permits was conducted.
 
 The permits, which were set to expire at dates ranging from October 17, 2004 to March 30, 2005, were renewed by the Company for an additional five years at an annual license fee of $75 Canadian per square kilometer.
 
 Our Exploration Program
 
 Caribou Property
 
 Prior to any decision to develop the properties, a mineral deposit must be assessed to determine the total tonnage of minerals bearing material and the estimated value of the minerals. Gathering this data usually takes, as noted above, at least two years. At that time, we will decide whether, and, if so, how, to proceed. We may seek either a joint venture partner or a senior partner that will undertake the exploration of the properties. It must be noted that there is a substantial risk that no commercially viable mineral deposit will be found, and if that is the case, we are likely to have difficulty finding any partners to undertake further exploration.
  4
  At the present time, we do not hold any interest in a mineral property that is in production. Our viability and potential success lie in our ability to successfully explore, exploit and generate revenue from our properties. There can be no assurance that such revenues will be obtained. The exploration of mineral deposits involves significant risks over a long period of time, which a combination of careful evaluations, experience and knowledge may not eliminate. It is impossible to ensure that the current or proposed exploration programs on the exploration permits will be profitable or successful. Our inability to locate a viable mineral deposit on our properties could result in a total loss of our business.
 
 We intend to continue to explore the Caribou Property through the completion of the exploration phase.  We contract with third parties to perform all exploration activities.
 
 Our exploration operations are subject to all of the hazards and risks normally incident to exploration of this type, any of which could result to damage to life or property, environmental damage, and possible legal liability for any or all damages. Our activities may be subject to prolonged disruptions due to weather conditions surrounding the location of properties over which we have permits. Difficulties, such as an unusual or unexpected rock formation encountered by workers but not indicated on a map, or other conditions may be encountered in the gathering of samples and data, and could delay our exploration program. While we may obtain insurance against certain risks in such amounts as we deem adequate, the nature of these risks are such that liabilities could exceed policy limits or be excluded from coverage. We do not currently carry insurance to protect against these risks and there is no assurance that we will obtain such insurance in the future. There are also risks against which we cannot, or may not elect to, insure. The potential costs which could be associated with any liabilities not covered by insurance or in excess of insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting our final position, future earnings, and/or competitive position.
 
 FY 2008 and 2009 Activities
 
 In June 2008, the Company’s wholly-owned subsidiary, Platinum Discoveries Corp., received from GEOLOGICA  Groupe – Conseil Inc. (“Geologica”) a NI 43 -101 Technical Report on the Company’s 100% owned Caribou Property authored by Alain-Jean Beauregard, P.Geo., OGQ, FGAC and Daniel Gaudreault, P. Eng., OIQ, AEMQ, Thetford-Mines area in the province of Quebec Canada. Eleven (11) deposits and showings are present on the Caribou property (Montreal Mine, Caribou Mine, American Chrome Deposit, American Chrome Jr., Finneth, Cesar, Dumais, Vaillancourt, Gagne, Greenshields and Lambly-Nadeau/Victoria Mines). Compiling and analyzing all previous work led to sensing a very close relationship between the cumulate sequence of the Thetford Mines Ophiolitic Complex, chromiferous mineralization, and Platinum Group Elements (PGE) mineralization.
 
 More than eleven (11) known chromite deposits and showings on the Company’s property were recognized and defined. The report indicates that the results of the past work are very interesting and significant for the Company since they not only confirm the presence of platinum and palladium on the Caribou property, but also seem to show that PGE mineralization is preferentially associated with the contact between ultramafic and mafic units of the Thetford Mines Ophiolitic Complex. More than 10 Km of favorable contact is present on the Property. Large-scale mapping of this metalotect led to identifying new PGE showings.
 
 Moreover, recent sampling on the Starchrome property immediately south of the Caribou property, has confirmed the possibility of finding economic grades of platinum and palladium. In fact, a grab sample (sample SC-1) has revealed 15.93 g/t Pt-Pd and .427 ppm Rh. Previously, a channel sampling carried out by Allican had revealed a total platinum-palladium values of  2.61 g/t, and 3.83 g/t and 4.66 g/t over widths of 4.7m.
 
 In September 2008 the Company announced that Platinum Discoveries Corp. commenced evaluation of the Caribou project in the Thetford Mines area of Southern Quebec.  Sampling of the eleven (11) showings that are present on the Caribou Property have begun and will be sent to ALS Laboratories for assay testing.  These showings have shown potential for chromium, nickel and platinum mineralizations.  A heliborne geophysical survey is also planned that in addition to the surface sampling will assist in prioritizing drill targets.
 
 In addition to exploration work carried on by the Company, Auger Resources Limited, a private Canadian company controlled by the Forbes & Manhattan Inc., has begun a major drill program on its historical chromium deposits of Reed Belanger and Hall which are adjacent to the Company’s Caribou property.
 
 In November 2008, preliminary results from the exploration work done in 2008 field season confirmed the presence of high chromium (Cr2O3) mineralization in pyroxenite unit over several meters.
  FY  2009 Activities
  The 2008 field season focused on known chromite showings to confirm the chromite and platinum group elements (PGE) potential.  The 2009 field season followed a structural- geological study completed in the fall of 2008 on the Property based on satellite imagery.  The study defined high potential structural analysis at a 1:10,000 scale.  The report was titled “Structural/Geological Interpretation Using Satellite Imagery of the Brassard South Project, Quebec, Canada” dated December 2008 by A. Moreau, P. Geo., M.A. Sc., Geological Engineering, of Technologies Earth Metrix Inc. (Rouyn-Noranda, Quebec)
 
 The channel sampling of 2009 of known showings (Finneth, American Chrome Junior and Cesar) confirmed chromium and PGE potential.  All samples selected on outcrop were 1 meter wide.  The best values were obtained on American Chrome Junior with one value up to 21.47% of Cr2O3.  All seven (7) samples are chromium rich and enriched in PGE.  Finneth Showing contains values up to 6.36% Cr2O3.  All 15 samples are contain anomalous chromium values. The three (3) highest Cr2O3 values graded 100ppb PGE (Pt-Pd- RH).  The two (2) best values obtained on Cesar graded over 2% Cr2O3.  It was recommended to do more trenching in the surrounding area of each showing.
  We estimate that it will require approximately $500,000 to conduct an exploration program on the Caribou property through 2011. This amount will be used to pay for continued drilling of identified targets, prospecting and geological mapping, helicopter and airplane support, lodging and food for workers, pick-up truck rentals, assays, property taxes to the Quebec Department of Natural Resources and supervision.  If we continue with the exploration of the Caribou property, we plan to raise a minimum of $500,000 through one or more private offerings pursuant to Rule 506 or Regulation D or through an offshore offering pursuant to Regulation S; however, nothing in this annual report shall constitute an offer of any securities for sale. Such shares when sold will not have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. If we are unable to raise this amount, we will most likely cease all activity related to our exploration program, or at the very least, proceed on a reduced scale. We have to date relied on a small number of investors to provide us with financing for the commencement of our exploration program, including TVP Capital Corp., a principal stockholder. Amounts owed to these individuals are payable upon demand.
  5
  Torngat Property
 
 The Company performed exploration activities related to the Torngat Property through the end of 2007 at which time it was determined not to pursue any further exploration of that property.
 
 FY 2000 Activities
 
 During 2000, we began early stage exploration activities, and gathered samples from one property for analysis. An exploration team of eight men gathered samples and data at this property. The samples are taken from dykes or “pipes” containing kimberlite. These samples were analyzed by Lakefield Research Limited, of Ontario, an independent laboratory, which uses caustic dissolution to extract the diamonds from the samples. This laboratory issued reports dated September 26 and September 27, 2000, on two samples, one of which indicates that out of a 24.65 kilogram sample, two diamonds were found weighing 0.015 carats in the aggregate. The second sample of 30.22 kilograms yielded eight diamonds, with a total weight of 0.001 carats.
 
 On March 27, 2001, the Gem Trade Laboratory of the Gemological Institute of America (“G.I.A.”), an independent laboratory, issued a report in which they analyzed “random samples” of numerous transparent pink crystal fragments that were obtained from the property covered by our permits known as D.D.I. #1 in October 2000, by our agent Prospecting Geophysics Ltd. These samples were taken from property located in the original 469.05 square kilometers in the Torngat mountain region. The conclusion of the report was that the samples that ranged in size from approximately 0.40 to 0.70 MM consisted of natural corundum. Corundum is the hardest mineral after diamond. The samples obtained from the property covered by our permit were transparent pink suggesting that they consist of the “ruby” gem. A ruby is a red variety of the mineral corundum.
 
 FY 2001 Activities
 
 During April 2001, we began the second phase of our exploration, after the weather in northwestern Quebec allowed for exploration activities.  We, through Prospecting Geophysics Ltd., began to determine the extent of the kimberlite dykes that were located in phase one, and gathered larger mini-bulk and bulk samples. These next samples are expected to be up to 7,000 pounds. This should enable the Company to test for larger, and potentially more marketable diamonds which may, or may not, exist in the kimberlite dykes. There is, of course, a substantial risk that we will not find such diamonds. Prospecting Geophysics Ltd. will, at the same time, be attempting to locate additional kimberlite dykes and pipes, and sample them as well.
 
 FY 2002 Activities
 
 In 2002, we acquired permits for an additional 50,000 acres adjacent to the property where we already have permits located in the Torngat mountain region of Quebec. We acquired the permits by staking the property and paying the requisite fees to the Quebec Department of Natural Resources. In addition to paying the fees, we must perform a certain amount of assessment work on each claim to keep them in good standing. We have successfully completed all assessment work related to this property.
 
 We, through Prospecting Geophysics Ltd., continued exploration during the 2002 season, taking large rock bulk samples from property included in the original 469.05 square kilometers and commenced exploration in the newly acquired 50,000 acres.  We located four new kimberlite dyke systems that contain 27 new dykes, most of which have been sampled.  Reduced samples from the original field samples were subject to micro-probed analysis and found to contain typical kimberlite minerals, phologopite and olivine and the important indicator minerals chrome diopside, pyrope garnet, picro-ilmenite and chromite. One 110 pound sample containing an olivine xenolith was found to contain a large population of indicator minerals including 243 G9 garnets, 65 chrome diopsides, and 143 spinels. This mineral assemblage is similar to the Arx Dyke which is located on our permit property that contained the nine micro and one macro diamonds.
 
 FY 2003 Activities
 
 The 2003 exploration program, managed by Prospecting Geophysics Ltd. of Val D'Or, Quebec consisted of geological mapping, rock sampling, stream geochemistry, ground magnetometer surveys and prospecting.  Analytical results are still being received.  The program defined and evaluated four loosely bounded belts containing more than 50 Kimberlite dykes, two kimberlite pipes and several suspected dykes.  Besides the two macro diamonds and 13 micro diamonds previously discovered in the "A" dyke in 2000, and the rubies reported from the D, F and K dykes in 2001, SGS Lakefield Research discovered diamond fragments from kimberlite/aillikite samples taken from the F, E, B, G, Yvon #2, Champagne pipe, Peter Lake, P, U, Bella, at eight locations on the St. Pierre N. dyke and at five locations along the MJR kimberlite dyke in 2003.  Subsequently in 2003, diamond fragments have been verified at Mount Jacques Rousseau.
  6
  Geologist, Robert Dillman, consultant to Diamond Discoveries, received results from C.F. Mineral Research Limited of microprobe analysis of several picked mineral samples from various dykes.  The January 2004 results indicated forsterite olivines and clinopyroxenes with diamond inclusion compositions, some of which are associated with large diamonds were noted in the Yvon #2, K16 and St. Pierre Southdykes.  The February 2004 results determined the presence of chrome diopside and forsterite olivine (Diamond Indicator Minerals) from seven dykes named: St. Pierre dyke, St. Pierre Extension, A Dyke, C Dyke Champagne, K dyke and K25 dyke.  Five of the dykes have an aillikite composition and the St. Pierre and St. Pierre extension have a kimberlite composition.  Using the C.F. Minerals classification, 100% of the olivine grains analyzed from the St. Pierre, St. Pierre Extension and the K dyke are classified as having diamond inclusion compositions and there is potential for these dykes to host diamonds.
 
 FY 2004 Activities
 
 During the 2004 exploration program, the Company was able to complete one hole for a total of 100 feet of the total 10,000 foot program prior to the onset of severe weather.  The Company has received the caustic fusion analyses from the first hole in the scheduled 10,000 foot drill program on Diamond Discoveries’ Torngat Mountains diamond project in Northeastern Quebec.  The 34.7 kilogram sample from 22 feet of kimberlite core was sent to Saskatchewan Research Council Labs where it was analyzed for diamond content.  No macro or microdiamonds were found in the core.
 
 The Company purchased the drill and left it on the property and has the camp and fuel in place to get an early start on the following exploration season.  The Company will resume the scheduled drill program in the spring of 2005 focusing on its main targets, the Round Lake Structure and Champagne Pipe.  Earlier surface sampling located macrodiamonds and microdiamonds in dykes proximal to the Round Lake Structure.
 
 The Company’s geologists have noted rubies and pink corundums in several places across the property.  They also noted pink corundum in the broken core from the first drill hole.  Along with the search for diamond bearing kimberlite pipes the geologists will begin evaluation the size and gem potential of the many ruby occurrences.
 
 FY 2005, FY 2006 and FY 2007 Activities
 
 In June, 2005, the Company engaged McPhar Geosurveys Ltd. (“McPhar”) to conduct an airborne magnetic survey of the Torngat property.  In July 2005, the Company engaged Watts, Griffis and McOuat (“WGM”), a geological and engineering consulting firm.  WGM was retained to oversee and direct the continuing exploration of the Torngat property.  The firm of Patterson, Grant and Watson Ltd. (“PGW”) reviewed the results of the airborne magnetic survey conducted by McPhar.  PWG identified 40 targets, 10 first priority, 23 second priority targets and seven third priority targets.  While some of the targets correlate to previously identified kimberlitic dykes, several targets are for new dykes not previously sampled.  After their review of the report on the McPhar airborne magnetic survey, WGM outlined a program for exploration during the 2005 season.  The primary objectives of the field program were:
 
 1.
independent replication of previously reported diamonds recovered from three of the known kimberlite dykes;
 2.
independent field sampling of drainages associated with airborne anomalies selected by PGW and sample sites selected by WGM to confirm prior results;
 3.
ground magnetic confirmation of all potential targets that were readily accessible;
 4.
rock chip sampling of newly discovered and previously untested dykes associated with airborne anomalies; and
 5.
to the extent possible, test by drilling selected airborne anomalies with the diamond drill already available on the property.
 
 In August 2005, the field exploration commenced with a crew of 12.  The crew completed drilling of 2 of the targets identified by PGW.  In addition, the crew collected 38 alluvial and rock chip samples from prospective dykes and drainages adjacent to the airborne anomalies and completed ground magnetic surveys covering 20 of the airborne anomalies.  The alluvial and rock chip samples along with selected core samples were sent to Saskatchewan Research Council Geoanalytical Laboratory (“SRC”) for processing.  The results of the sample processing will be available in a few months.  Exploration of the Torngat property has been suspended for the winter months due to inclement weather.  WGM continues to analyze and compile all the available geophysical, geological and geochemical data.  On October 18th, the Company was informed by WGM that all five objectives of the 2005 field program were achieved.  Further field exploration of the Torngat property did not resume in 2008 while the Company evaluated a potential opportunity for a joint venture on property located in Quebec.
  7
  Government Regulation and Licensing
 
 Our operations require licenses and permits from various governmental authorities. We believe that we presently hold all necessary licenses and permits required for our intended activities under applicable laws and regulations, and we believe that we are complying at the present time in all material respects with the terms of such licenses and permits. However, our licenses and permits are subject to changes in regulations and in various operating circumstances. We may not be able to obtain all necessary licenses and permits required to carry out exploration activities.
 
 We are currently subject to the environmental regulations set forth under the Environmental Act (Quebec), the Mining Act (Quebec) and the Forest Act (Quebec). We believe that we are in compliance with all of these acts, and moreover, we believe that the environmental impact of our exploration activities will be minimal. To the extent that we remove large amounts of rock or soil from the properties, we will likely have to remediate any environmental disruption caused by our activities. It is impossible to assess with any certainty the cost of such replacement or remediation activities, or the potential liability that we would face if we were to be found to have violated one, or more, of these Acts.
 
 Employees
 
 We do not have any full time employees at the present time. We have one part time employee, Mr. Antonio Sciacca, who is an executive officer. We use third parties to oversee and conduct our exploration activities.
 
 Competition
 
 The mineral exploration business is competitive in all of its phases. We expect to compete with numerous other exploration companies and individuals, including competitors with greater financial, technical and other resources than us, for the resources required for exploration. The greater resources of other entities will likely position these competitors to conduct exploration within a shorter time frame than we can, giving them a market advantage.
 
 Currency Fluctuation
 
 We also have exposure to currency fluctuations, since our properties are located in Canada, and thus our transactions are largely in Canadian dollars. Such fluctuations can materially affect our financial position and other results of operations. References to the “dollar” or “$US” in this Form 10K are to United States Dollars, and “Canadian” or “$Cdn” refers to Canadian dollars. Unless otherwise stated, the translations of $US to $Cdn and vice versa have been made at the average rate for the year indicated. The following table sets forth the high and low exchange rate of the Canadian dollar per US dollar as of the latest practicable date and for each of the last six months:
 
 Period

High


LowApril 2010


1.0205



0.9948March  2010


1.0560



1.0062February 2010


1.0772



1.0371January  2010


1.0695



1.0225December  2009


1.0748



1.0366November 2009


1.0830



1.0427
 
 Item 2. Description of Property
 
 We do not own real property, nor do we hold any other real property interest other than the exploration permits which we discuss above under the caption “Description of Business.” As noted above, we have engaged Prospecting Geophysics Ltd. as our on-site project manager for our exploration activities.
 
 In compliance with Guide 7 of Industry Guides under the Securities Act of 1933 and the Securities Exchange Act of 1934, the following information is provided, since we are engaged or are to be engaged in significant mining operations:
 
 (1)           The permits were acquired in the Torngat Property Acquisition Agreement cover 469.05 square kilometers of properties in northwest Quebec, Canada, on the eastern shore of Ungava Bay and by staking an additional 50,000 acres adjacent to such properties and paying the requisite fees to the Quebec Department of Natural Resources. With the exception of the five (5) month period from November to March in which there is inclement weather in the area surrounding the properties, there is nothing preventing access to the properties. However, hazardous weather conditions could prevent us from accessing the properties in other months as well. The properties are only accessible by air via a helicopter or by boat. There are no roads that permit direct access to the properties.
 
 (2)           Pursuant to an agreement between us and Peter Ferderber, Peter Ferderber has transferred to us six (6) permits for the properties. The properties covered by the permits are indicated on the map presented in Appendix A by the areas marked D.D.I. Further, pursuant to the Acquisition Agreement, in consideration for the permits, we have issued 1,000,000 shares of our common stock to Mr. Ferderber and have paid him $25,000 Canadian, and at Mr. Ferderber’s request, $35,000 Canadian to Stanley G. Hawkins. We have obtained the opinion of Lavery, de Billy, Barristers and Solicitors of Montreal, Canada dated July 10, 2000, that Mr. Ferderber was the record owner of the permits under the Mining Act of Quebec and that the permits were in good standing as of June 21, 2000.
  8
  (3)           To our knowledge, Messrs. Ferderber and Hawkins staked the 469.05 square kilometer property in the Torngat fields in northwest Quebec, Canada, on the eastern shore of Ungava Bay in 1999, and there were no previous owners, operators, or operations on the property.
 
 (4)           Although there can be no assurance of successful diamond development, initial progress reports of the property have indicated that there are micro diamonds on the property. A 24.65 kilogram sample taken from the property, has yielded two diamonds weighing 0.015 carats and a 30.22 kilogram sample has yielded eight diamonds weighing 0.001 carats.
 
 Geology
 
 The Torngat Property, where the properties for which we have mineral permits are located, lies within the Torngat mountain province. The crust in the province is thickened because two continental plates were pushed, more than a billion years ago, one on top of the other. The predominant rock type on the properties are the Tasiuyak Gneiss, a northwest trending belt of gneissic rock. The gneisses are considered to be altered sedimentary rocks.
 
 The rocks of the Torngat mountain province strike northwest-southeast within the Torngat property. Cross-cutting the gneisses, there are a number of kimberlite dykes. The individual dykes are dark green and generally coarse grained across most of their width.
 
 The properties are in a location over an early Precambrian bedrock segment which is bedrock dating back to the earliest era of geological history, called an “Archon.” An Archon is an immobile segment of the earth’s crust exceeding 1.5 billion years in age. Kimberlite, a form of igneous rock, is widely regarded as the main source for diamonds, and is reported from postulated Archon called the “Baltic Shield.” Only in the past decade have diamond explorers recognized that these Baltic Shield rocks are potentially viable for diamonds.
 
 The Property is Without Known Reserves and our Proposed Program is Exploratory in Nature.    Exploration for diamonds and minerals on the properties began because the formation and layout of the rocks on the properties indicated that some of the rocks had been pushed up through the earth’s crust. This is initially identified by geologists from the age and shape of the rocks. When these different or unexpected rock formations appear, geologist then consider the area surrounding these rocks as strong targets for exploration for diamonds. This is because, geologists believe, as the rocks are pushing up through the earth’s surface from great depths, the rocks travel through diamond fields located below the earth’s surface and therefore rocks containing diamonds are forced to the surface.
 
 Rocks containing these characteristics were identified on the properties covered by our mineral permits. Once these rocks were identified, we then conducted a magnetometer survey. The magnetometer is a small electronic device used by geologists to survey the land for areas of high magnetism. This can be used in the air or on the ground. This test is conducted because, when the rocks are being pushed through the earth’s surface (as described above), in addition to bringing rocks containing diamonds, iron from below the Earth’s surface is also forced to the surface. The magnetometer reads the surface of the Earth for any magnetism created by the iron upon the belief that if a particular property contains a high concentration of iron that was forced up from below the earth’s surface; the property may also contain diamonds that have been similarly forced up to the surface.
 
 An airborne magnetometer survey was conducted over the properties for which we have mineral permits, and six (6) magnetic dykes were discovered. This indicated to us that these properties were potentially a source for diamonds. In addition, samples of rock taken from the properties have yielded small diamonds.
 
 Prior to 2005, we hired Prospecting Geophysics Ltd. to conduct these exploration procedures. Mr. Peter Ferderber is the President of Prospecting Geophysics Ltd. Mr. Ferderber has over forty years of experience in mining exploration. In July 2005, the Company engaged Watts, Griffis and McOuat (“WGM”), a geological and engineering consulting firm.  WGM was retained to oversee and direct the continuing exploration of the Torngat property.  The first phase of exploration involved identifying areas on the property from which to take samples and gathering small samples from the properties for analysis. This analysis to date has demonstrated the presence of 10 micro diamonds in two samples taken. The second phase involves determining the extent of any kimberlite dykes that were located in phase one and to gather mini-bulk and bulk samples. This will enable us to determine if there are larger and more marketable diamonds on the properties. Phase two of our exploration began in April 2001 and was suspended in 2006 until further notice while the Company evaluates a potential opportunity for a joint venture on property located in Quebec.  Operations are generally suspended from October to April because of inclement weather.
  9
  The following is a breakdown of the estimated budget for particular aspects of our exploration activities:
 
 Drill program

400,000Testing samples

100,000Total

$
500,000
 
 (5)           In the Quebec sector of the Torngat belt, roughly fifteen dykes have been mapped. These dykes occupy fractures oriented at an approximately right angle to the country rocks, suggesting tensions opened up by later scale folding. Two of these dykes on an adjacent property have been sampled, confirming the presence of diamonds. However, to date, no proven reserves have been established and there can be no assurance that any such reserves will ever exist.
 
 Item 3. Legal Proceedings
 
 There are no legal proceedings pending or threatened against us.
 
 Item 4. Submission of Matters to a Vote of Security Holders
  None.
 
 PART II.
 
 Item 5. Market for Common Equity and Related Stockholder Matters.
 
 As of July 18, 2002 prices for the Common Stock were quoted on the Over the Counter Bulletin Board operated by the National Association of Securities Dealers, Inc. under the symbol DMDD. The Company’s common stock was delisted on May 17, 2008 and has been reported on the pink sheets since that date.  The following table sets forth the high and low closing bid prices of the Company’s Common Stock for the periods indicated as reported by the NASD. These quotations reflect inter-dealer prices without retail markup, markdown or commissions and may not necessarily represent actual transactions.
 
 High


LowFiscal Year 2008First Quarter


0.018



0.004Second Quarter


0.035



0.006Third Quarter


0.048



0.008Fourth Quarter


0.015



0.004Fiscal Year 2009First Quarter


N/A



N/ASecond Quarter


N/A



N/AThird Quarter


N/A



N/AFourth Quarter


N/A



N/AFiscal Year 2010First Quarter


N/A



N/A
 
 Of the 403,414,907 shares of our common stock issued and outstanding as of May 4, 2011,24,983,077 shares of our common stock are currently considered “restricted securities” and in the future, may be sold only in compliance with Rule 144 or in an exempt transaction under the Act unless registered under the Act.
 
 As of May 4, 2011, the number of holders of record of our common stock was approximately 120.
 
 We do not anticipate paying any cash dividends on our common stock in the foreseeable future because we intend to retain our earnings to finance the expansion of our business. Thereafter, the declaration of dividends will be determined by the Board of Directors in light of conditions then existing, including, without limitation, our financial condition, capital requirements and business condition. We are prohibited from paying cash dividends on the common stock until any issued and outstanding preferred stock is converted into common stock. However, there were no shares of preferred stock outstanding as of December 31, 2009.
  10
  Equity Compensation Plan Information:
  Number of securities to be issued upon exercise of outstanding options, warrants and rights


Weighted-average exercise

price of outstanding options,

warrants and rights


Number of securities

available for future issuance

under equity compensation

plans (excluding securities

reflected in column

(a))(a)


(b)


(c)Equity compensation plans approved by security holders


0


$
0.00



1,500,000Equity compensation plans not approved by security holders


0


$
0.00



2,200,000Total


0


$
0.00



3,700,000
  Stock Option Plans
 
 2005 Plan
 
 On November 14, 2005, the Company adopted the Diamond Discoveries International Corp. 2005 Stock Incentive Plan (the “2005 Plan”).  Under the 2005 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2005 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2005 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2005 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2005 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2005 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2005 Plan.  Options granted under the 2005 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the 2005 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the 2005 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
 
 2004 Plan
 
 On September 30, 2004, the Company adopted the Diamond Discoveries International Corp. 2004 Stock Incentive Plan (the “2004 Plan”).  Under the 2004 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2004 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2004 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2004 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2004 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2004 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2004 Plan.  Options granted under the 2004 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the 2004 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
  11
  Each option granted under the 2004 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
  2003 Plan
  On May 30, 2003, the Company adopted the Diamond Discoveries International Corp. 2003 Stock Incentive Plan (the “Plan”). Under the Plan, 15,000,000 shares of common stock are reserved for issuance. The purpose of the Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons. The Plan orivudes for the grant of incentive stock options and nonqualified stock options (“Options”) and restricted stock awards (“Restricted Stock Awards”) and Stock Appreciation Rights, Performance Shares, Dividend Equivalent Payments, and Other Stock Based Awards (“Options,”“Restricted Stock Awards,” and “Stock Appreciation Rights,” are collectively referred to herein as “Awards”). Options granted under the Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options. Stock options may be granted under the Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company. The Plan is administered by the Board of Directors. The Compensation Committee is empowered to interpret the Plan and to prescribe, amend and rescind the rules and regulations pertaining to the Plan. Options granted under the Plan generally vest over three years. The Compensation Committee may not receive options.
  Any incentive stock option that is granted under the Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.) Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant, but in no event shall such exercise price be less than 55% of such fair market value.
  Each option granted under the Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of an incentive stock option granted to a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
  Awards are generally non-transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.
  The Company’s Board of Directors may at any time, and from time to time, amend, terminate, or suspend one or more of the Plan in any manner it deems appropriate, provided that such amendment, termination or suspension cannot adversely affect rights or obligations with respect to shares or options previously granted, unless the Award recipient consents to such changes in writing. The Board of Directors may not, without shareholder approval: make any amendment which would materially modify the participation eligibility requirements for the 2005 Plan and 2004 Plan, to the extent they require approval in order to satisfy the Internal Revenue Code requirements; make other modifications requiring stockholder approval to satisfy the Internal Revenue Code requirements, increase the total number of shares of common stock which may be issued pursuant to the 2005 Plan and 2004 Plan, except in the case of a reclassification of the Company’s capital stock or a consolidation or merger of the Company.
  Recent Sales of Unregistered Securities
  In May 2008, in connection with a private placement of its common stock, the Company issued 5,750,000 shares of its common stock for $141,250. In June 2008, the Company issued 10,000,000 shares of its common stock in connection with the acquisition of the Caribou property which is recorded in other assets in the accompanying balance sheet of $130,000 which approximated the fair value of the shares. In October 2008, the Company issued 10,025,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $131,625 which approximated the fair value of the shares.
  In April 2009, in connection with a private placement of its common stock, the Company issued 17,500,000 shares of its common stock for $175,000.
  12
  The sale and issuance of the aforementioned shares were exempt transactions under Section 4(2) of the Securities Act of 1933 as a transaction by an issuer not involving a public offering.  At the time of sale, the persons who acquired these securities were all full, informed and advised about matters concerning us, including our business, financial affairs and other matters.  The shareholders acquired the securities for their own account or their designees.
 
 Item 6. Selected Financial Data.
 
 Not applicable.
  Item 7. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
 
 The following discussion and analysis should be read in conjunction with the financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.The following discussion regarding us and our business and operations contains forward-looking statements. Such statements consist of any statement other than a recitation of historical fact, and can be identified by the use of such forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate” or “continue” or the negative thereof or other variations thereon, or comparable terminology. The reader is cautioned that all forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. The Company undertakes no obligation to update the information contained herein. Forward-looking statements are subject to inherent risks and uncertainties, some of which are summarized in “Risk Factors” section of this Form 10-K.
  Operations to Date
 
 We were incorporated in the State of Delaware in April of 2000.  We have not engaged in commercial operations since inception, and therefore have not realized any revenues from operations since inception.  We do not expect to commence operations in the foreseeable future and do not expect to generate revenue in calendar year 2010.
 
 For the fiscal years ended December 31, 2009 and 2008 and the period from April 24, 2000 (date of inception) to December 31, 2009 we incurred $26,281, $(127,436) and $2,430,572 in exploration costs, net of reimbursements and $88,060, $1,001,930 and $16,359,139 in general and administrative expenses, respectively. General and administrative expenses consisted primarily of professional fees related to our corporate filings and consulting and other expenses incurred in operating our business. We incurred a net loss of $114,341 or $(.00) per share based on 397,176,762 weighted average shares outstanding for the fiscal year ended December 31, 2009 compared to a net loss of $874,494 or $(.00) per share based on 370,037,390 weighted average shares outstanding for the fiscal year ended December 31, 2008.
 
 Going Concern
 
 In connection with their audit report on our financial statements as of December 31, 2009, Rodefer & Moss, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise sufficient capital.
 
 We have explored, and continue to explore, all avenues possible to raise the funds required.  Continuation of our exploration efforts is dependent upon our ability to raise capital.
 
 Ultimately, we must achieve profitable operations if we are to be a viable entity. Although we believe that there is a reasonable basis to believe that we will successfully raise the needed funds to continue exploration, we cannot assure you that we will be able to raise sufficient capital to continue exploration, or that if such funds are raised, that exploration will result in a finding of commercially exploitable reserves, or that if exploitable reserves exist on our properties, that extraction activities can be conducted at a profit.
 
 Cash Flow and Capital Resources
 
 Through December 31, 2009 we have relied on advances of approximately $1,737,000 from our principal stockholders, trade payables of approximately $215,000, notes payable of approximately 1,464,000 and proceeds of approximately $5,331,000 from the sale of common stock to support our limited operations. As of December 31, 2009, we had approximately $5,533 of cash.
  13
  We plan to seek additional equity or debt financing of up to $500,000 which we plan to use for the next phase of our exploration program to be conducted through December 31, 2010, as well as working capital purposes. We currently have limited sources of capital, including the public and private placement of equity securities and the possibility of issuance of debt securities to our stockholders. With virtually no assets, the availability of funds from traditional sources of debt will be limited, and will almost certainly involve pledges of assets or guarantees by officers, directors and stockholders. Stockholders have advanced funds to us in the past, but we cannot assure you that they will be a source of funds in the future. If we do not get sufficient financing, we may not be able to continue as a going concern and we may have to curtail or terminate our operations and liquidate our business (see Note 1 to financial statements).
 
 Plan of Operation
 
 Our business plan for the next year will consist of further exploration on the properties over which we hold the mineral exploration permits as well as preliminary marketing efforts.
 
 We estimate that it will require approximately $500,000 to conduct an exploration program on the Caribou property through 2010. This amount will be used to pay for continued drilling of identified targets, prospecting and geological mapping, helicopter and airplane support, lodging and food for workers, pick-up truck rentals, assays, property taxes to the Quebec Department of Natural Resources and supervision.  If we continue with the exploration of the Caribou property, we plan to raise a minimum of $500,000 through one or more private offerings pursuant to Rule 506 or Regulation D or through an offshore offering pursuant to Regulation S; however, nothing in this annual report shall constitute an offer of any securities for sale. Such shares when sold will not have been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. If we are unable to raise this amount, we will most likely cease all activity related to our exploration program, or at the very least, proceed on a reduced scale. We have to date relied on a small number of investors to provide us with financing for the commencement of our exploration program, including TVP Capital Corp., a principal stockholder. Amounts owed to these individuals are payable upon demand.
 
 We employ one individual on a part time basis, who is an executive officer. We do not expect any significant changes in the number of employees within the next twelve months.
 
 Risk Factors
 
 Operations—New Entity/Startup Entity
 
 We have no history running our mineral exploration business.
 
 We are engaged in the exploration stage of our business. We have not engaged in any substantive business operations to date. More particularly, we have not engaged in any mining operations. We have only engaged in exploratory activities, feasibility studies and the establishment of initial exploration plans. Thus, we have no way to evaluate the likelihood that we will be able to operate our business successfully. You should consider our business future based on the risks associated with our early stage, and lack of experience.
 
 We expect to face many of the typical challenges of a startup business.
 
 A startup business like ours faces a number of challenges. For example, engaging the services of qualified support personnel and related consultants and other experts is very important in the mineral exploration business, and there is keen competition for the services of these experts, consultants, and support personnel. Equally important in the mineral exploration business is establishing initial exploration plans for mining prospects, and analyzing relevant information efficiently. Establishing and maintaining budgets and appropriate financial controls is also very important to a startup business. We expect to incur substantial operating losses for the foreseeable future, as well. The failure to address one or more of these activities, or curb operating losses, may impair our ability to carry out our business plan.
 
 Operations—Mineral Exploration Activities
 
 Mineral exploration has many inherent risks of operations which may prevent ultimate success.
 
 Mineral exploration has significant risks. Mineral exploration companies (like us) are dependent on locating mineral reserves on the properties over which it has mineral permits, and are also dependent on the skillful management of minerals, when and if found or located on these properties. These minerals, when found in deposits and mineralizations, can vary substantially in a prospect, rendering what was initially believed to be a profitable deposit into one of little or no value. Unforeseen changes in regulations, the value of minerals, environmental regulations, mining technology, site conditions, and/or labor conditions can all have a negative impact on our operations, and each may impair our ability to carry out our business plan.
  14
  Our business future is dependent on finding mineral deposits with sufficient mineralization and grade.
 
 Our business model depends on locating prospects with a sufficient amount of mineralization to justify surface and drilling sampling. No assurance can be given that our specific exploration target areas will be valuable in locating mineralizations. Even if initial mineralization reports are positive, subsequent activities may determine that deposits are not commercially viable. Thus, at any stage in the exploration process, we may determine that there is no business reason to continue and, at that time, our resources may not enable us to continue exploratory operations and will cause us to terminate our business.
 
 We have no known mineral reserves, and if we cannot find any, we will have to cease operations.
 
 We have no mineral reserves. If we do not find a mineral reserve containing diamonds, or if we cannot develop any diamond-bearing mineral reserve, either because we do not have the money to effect such a development, or because it will not be economically feasible to do it, we will have to cease operations, and you may lose your entire investment.
 
 We are relying on geological reports to locate potential mineral deposits, which may be inaccurate.
 
 We rely on geological reports to determine which of the properties, for which we have mineral permits, to explore. There is no sure method of verifying the care and manner used to prepare these reports without further verification on our part, or on our agents’ part. Verification of reports is expected to be costly, and may take a considerable period of time. Verification could result in our rejecting a potential mineral prospect; however, we will have borne the expense of this verification with no likelihood of recovering the amounts expended. Decisions made without adequately checking the mining prospects could result in significant unrecoverable expenses. Mineral deposits initially thought to be valuable may, in fact, turn out to be of little value. Therefore, it is possible that investment funds will have been used, with no value having been achieved from the operations based on the reports.
 
 Regulatory compliance in the mineral exploration business is complex, and the failure to meet all of the various requirements could result in fines, or other limitations on the proposed business.
 
 Our mineral exploration activities will be subject to regulation by numerous governmental authorities. We are subject to environmental regulations under the Environmental Act (Quebec), the Mining Act (Quebec), and the Forest Act (Quebec). The failure to comply fully with these or any other governmental regulations will adversely affect our ability to explore for economic mineralization, and our subsequent business stages. The failure to comply with any regulations or licenses may result in fines or other penalties. We expect compliance with these regulations to be substantial. Therefore, compliance with (or, conversely, the failure to so comply with) applicable regulations will affect our ability to succeed in our business plans and to generate revenues and profits.
 
 Mineral exploration is a hazardous business, which entails risks for liability and/or damages.
 
 The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure against, or against which we may not elect to insure. We do not currently carry any insurance to protect against the potential liability of such hazards. The payment of any liabilities attributed to us may have a material adverse effect on our financial position and may cause us to cease operations.
 
 We face intense competition, and our competitors may have greater resources than we do and be better able to locate and explore mineral resources in a quicker and more cost efficient manner than we can.
 
 It is our belief that there are a significant number of companies with greater resources than those available to us, to locate and explore mineral resources. These companies may be able to reach production stages sooner than we can, and obtain a share of the market for mineral products before we can.
 
 Because our management has only limited experience in mineral exploration, we have a higher risk of failure.
 
 Our management has only limited experience in mineral exploration. As a result of this limited experience, there is a higher risk of our being unable to complete our business plan in the exploration of our mineral property.
 
 Capital Issues
 
 We do not currently have sufficient capital to engage in exploration activities.
 
 The cost of our planned exploration activities is approximately $500,000. As of the date of this filing, we do not have sufficient capital to engage in exploration activities, and no sources for financing. The extent to which we will be able to implement our exploration for minerals will be determined by our ability to engage in offerings of equity securities and/or debt securities. Without additional capital, we will have to either curtail our business plan, or abandon it altogether.
  15
  We do not have any identified sources of additional capital, the absence of which may prevent us from continuing our operations.
 
 We do not, presently, have any arrangements with any investment banking firms or institutional lenders. Because we will need additional capital, we will have to expend significant effort to raise operating funds. These efforts may not be successful. If not, we will have to either curtail our business plan, or abandon it altogether.
 
 Corporate Governance Risks
 
 Our officers and directors will devote approximately one-third of their time to our operations.
 
 Our officers and directors have other interests. Because of these other interests, each will be devoting only one-third of their time to our operations, which could have a negative impact on the efficiency of our operations.
 
 Critical Accounting Policies and Estimates
 
 Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from these estimates under different assumptions or conditions. This section summarizes the critical accounting policies and the related judgments involved in their application.
 
 Valuation of Deferred Tax Assets
 
 We regularly evaluate our ability to recover the reported amount of our deferred income taxes considering several factors, including our estimate of the likelihood that we will generate sufficient taxable income in future years in which temporary differences reverse. Due to the uncertainties related to, among other things, the extent and time of future taxable income and the potential changes in the ownership of the Company, which could subject our net operating loss carryforwards to substantial annual limitations, we offset our net deferred tax assets by an equivalent valuation allowance as of December 31, 2009.
 
 Valuation of Long-Lived Assets
 
 We assess the recoverability of long-lived assets, such as mining claims, whenever we determine that events or changes in circumstances indicate that their carrying amount may not be recoverable. Our assessment is primarily based upon our estimate of future cash flows associated with these assets. If at some point in the future, we estimate that the undiscounted cash flows is less than the carrying value of the assets, this determination could result in non-cash charges to income that could materially affect our financial position or results of operations for that period.
  16
  Item 7A.. Quantitative and Qualitative Disclosures about Market Risk.
 
 Not Applicable.
 
 Item 8. Financial Statements and Supplemental Data
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 
 INDEX TO FINANCIAL STATEMENTS
 
 Report of Independent Registered Public Accounting Firm
18Balance Sheets December 31, 2009 and 2008
19Statements of Operations Years Ended December 31, 2009 and 2008 and Period from April 24, 2000 (Date of Inception) to December 31, 2009
20Statements of Changes in Stockholders’ Deficiency Years Ended December 31, 2009 and 2008 and Period from April 24, 2000 (Date of Inception) to December 31, 2009
21Statements of Cash Flows Years Ended December 31, 2009 and 2008 and Period from April 24, 2000 (Date of Inception) to December 31, 2009
22Notes to Consolidated Financial Statements
23
  17
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the Board of Directors and Stockholders
 Diamond Discoveries International Corp.:
 
 We have audited the accompanying consolidated balance sheets of Diamond Discoveries International Corp. (an exploration stage company) (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in stockholders’ deficiency and cash flows for the years then ended and for the period April 24, 2000 (inception) through December 31, 2009, respectively. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
  We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
  In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Diamond Discoveries International Corp. (an exploration stage company), as of December 31, 2009 and 2008, and the results of its operations and cash flows for the years then ended and for the period April 24, 2000 (inception) through December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
  The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has no present revenue. The success of the Company’s business plan is also dependent upon the amount of funds it is able to raise in the near future. The Company’s capital resources as of March 31, 2011 are not sufficient to sustain operations or complete its planned activities for the upcoming year unless it raises additional funds. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are described in Note 1. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.
 
 /s/ Rodefer Moss & Co, PLLCKnoxville, TennesseeMay 4, 2011
  18
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 BALANCE SHEETS
 DECEMBER 31, 2009 AND 2008
 
 2009


2008ASSETSCurrent assetsCash

$
5,533


$
33,848Other current assets


—



—5,533



33,848Property and equipment, net


—



—Other assets


237,517



222,775Total

$
243,050


$
256,623LIABILITIES AND STOCKHOLDERS’ DEFICIENCYLiabilities:Notes payable

$
1,463,869


$
1,264,529Accounts payable


215,441



198,659Other current liabilities


—



175,000Advances from stockholders


274,924



202,8741,954,234



1,841,062Total liabilities


1,954,234



1,841,062Commitments and contingenciesStockholders’ deficiency:Preferred stock, par value $.001 per share; 20,000,000 shares authorized; none issued


—



—Common stock, par value $.001 per share; 480,000,000 shares authorized; 401,491,830 and 383,991,830 shares issued and outstanding at December 31, 2009 and 2008, respectively


401,492



383,992Additional paid-in capital


17,218,641



17,061,141Deficit accumulated during the exploration stage


(18,490,824
)


(18,376,483
)Accumulated other comprehensive (loss)


(840,493
)


(646,584
)Unearned compensation


—



(6,505
)Total stockholders’ deficiency


(1,711,184
)


(1,584,439
)Total

$
243,050


$
256,623
 
 See Notes to Consolidated Financial Statements.
  19
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 STATEMENTS OF OPERATIONS
 YEARS ENDED DECEMBER 31, 2009 AND 2008 AND PERIOD FROM
 APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2009
 
 2009


2008


April 24,

2000 to

December 31,

2009Revenues

$
—


$
—


$
—Operating expenses:Exploration costs


26,281



216,367



3,980,010Reimbursements of exploration costs


—



(343,803
)


(1,549,438
)Exploration costs, net of reimbursements


26,281



(127,436
)


2,430,572General and administrative expenses


88,060



1,001,930



16,359,139Total operating expenses


114,341



874,494



18,789,711Operating loss


(114,341
)


(874,494
)


(18,789,711
)Other income (expenses)(Loss) gain on modification of debt


—



—



1,193,910Interest expense


—



—



(895,023
)Net loss

$
(114,341
)

$
(874,494
)

$
(18,490,824
)Basic net loss per common share

$
—


$
—Basic weighted average common shares outstanding


397,176,762



370,037,390
 
 See Notes to Consolidated Financial Statements.
  20
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
 YEARS ENDED DECEMBER 31, 2009 AND 2008 AND PERIOD FROM APRIL 24, 2000
 (DATE OF INCEPTION) TO DECEMBER 31, 2009
 
 Additional


Deficit

Accumulated

during the


Accumulated

other

comprehensive


SubscriptionsPreferred stock


Common stock


paid-in


exploration


income


receivable


UnearnedShares


Amount


Shares


Amount


capital


stage


(loss)


Shares


Amount


compensation


TotalIssuance of shares to founders effective as of April 24, 2000


—


$
—



4,850,000


$
4,850


$
—


$
—



—



—


$
—


$
—


$
4,850Issuance of shares as payment for legal services


—



—



150,000



150



3,600



—



—



—



—



—



3,750Issuance of shares in connection with acquisition of mineral permits


—



—



2,000,000



2,000



48,000



—



—



—



—



—



50,000Subscription for purchase of 10,000,000 shares


—



—



10,000,000



10,000



240,000



—



—



10,000,000



(250,000
)


—



—Proceeds from issuance of common stock


—



—



—



—



—



—



—



(1,000,000
)


25,000



—



25,000Net loss


—



—



—



—



—



(713,616
)


—



—



—



—



(713,616
)Balance, December 31, 2000


—



—



17,000,000



17,000



291,600



(713,616
)






9,000,000



(225,000
)


—



(630,016
)Proceeds from issuance of common stock


—



—



—



—



—



—



—



(9,000000
)


225,000



—



225,000Net loss


—



—



—



—



—



(1,021,190
)


—



—



—



—



(1,021,190
)Balance, December 31, 2001


—



—



17,000,000



17,000



291,600



(1,734,806
)






—



—



—



(1,426,206
)Proceeds from private placements of units of common stock and warrants


—



—



1,685,000



1,685



756,565



—



—



51,758



(23,291
)


—



734,959Net loss


—



—



—



—



—



(877,738
)


—



—



—



—



(877,738
)Balance, December 31, 2002


—



—



18,685,000



18,685



1,048,165



(2,612,544
)






51,758



(23,291
)


—



(1,568,985
)Issuance of shares as payment for accounts payable


—



—



3,000,000



3,000



295,423



—



—



—



—



—



298,423Issuance of shares as payment for services


—



—



6,715,000



6,715



1,368,235



—



—



—



—



—



1,374,950Issuance of stock options


—



—



—



—



1,437,000



—



—



—



—



(1,437,000
)


—Issuance of shares as payment for advances from stockholders


—



—



7,500,000



7,500



767,500



—



—



—



—



—



775,000Issuance of shares as payment for notes payable


—



—



1,810,123



1,810



124,898



—



—



—



—



—



126,708Proceeds from issuance of common stock


—



—



6,000,000



6,000



444,000



—



—



4,000,000



(281,250
)


—



168,750Proceeds from issuance of common stock in connection with exercise of stock options


—



—



10,050,000



10,050



292,450



—



—



—



—



—



302,500Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



169,744



169,744Net loss


—



—



—



—



—



(3,222,057
)


—



—



—



—



(3,222,057
)Foreign currency translation adjustment


—



—



—



—



—



—



(360,900
)


—



—



—



(360,900
)Total comprehensive loss ($3,582,957)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2003


—



—



53,760,123



53,760



5,777,671



(5,834,601
)


(360,900
)


4,051,758



(304,541
)


(1,267,256
)


(1,935,867
)Issuance of shares as payment for services


—



—



16,842,000



16,842



1,614,858



—



—



—



—



—



1,631,700Proceeds from issuance of common stock


—



—



4,000,000



4,000



384,832



—



—



524,207



(56,754
)


—



332,078Issuance of shares as payment for accounts payable


—



—



1,400,000



1,400



138,600



—



—



—



—



—



140,000Issuance of stock options


—



—



—



—



1,139,000



—



—



—



—



(1,139,000
)


—Proceeds from issuance of common stock in connection with exercise of stock options


—



—



31,125,000



31,125



395,125



—



—



—



—



—



426,250Forgiveness of stock subscriptions


—



—



—



—



—



—



—



(4,575,965
)


361,295



—



361,295Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



529,423



529,423Net loss


—



—



—



—



—



(3,724,106
)


—



—



—



—



(3,724,106
)Foreign currency translation adjustment


—



—



—



—



—



—



(131,269
)


—



—



—



(131,269
)Total comprehensive loss ($3,855,375)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2004


—



—



107,127,123



107,127



9,450,086



(9,558,707
)


(492,169
)


—



—



(1,876,833
)


(2,370,496
)Issuance of shares as payment for services


—



—



6,000,000



6,000



204,000



—



—



—



—



—



210,000Proceeds from issuance of common stock


—



—



69,883,657



69,884



2,376,044



—



—



—



—



—



2,445,928Issuance of shares as payment for accounts payable


—



—



36,481,050



36,481



1,156,386



—



—



—



—



—



1,192,867Issuance of stock options


—



—



—



—



1,218,500



—



—



—



—



(1,218,500
)


—Proceeds from issuance of common stock in connection with exercise of stock options


—



—



28,125,000



28,125



253,125



—



—



—



—



—



281,250Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



889,960



889,960Net loss


—



—



—



—



—



(3,419,547
)


—



—



—



—



(3,419,547
)Foreign currency translation adjustment


—



—



—



—



—



—



(151,691
)


—



—



—



(151,691
)Total comprehensive loss ($3,571,238)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2005


—



—



247,616,830



247,617



14,658,141



(12,978,254
)


(643,860
)


—



—



(2,205,373
)


(921,729
)Issuance of shares as payment for services


—



—



46,000,000



46,000



1,334,000



—



—



—



—



—



1,380,000Proceeds from issuance of common stock


—



—



100,000



100



3,400



—



—



—



—



—



3,500Issuance of stock options


—



—



—



—



150,000



—



—



—



—



(150,000
)


—Proceeds from issuance of common stock in connection with exercise of stock options


—



—



11,500,000



11,500



103,500



—



—



—



—



—



115,000Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



1,142,674



1,142,674Net loss


—



—



—



—



—



(3,053,173
)


—



—



—



—



(3,053,173
)Foreign currency translation adjustment


—



—



—



—



—



—



(48,535
)


—



—



—



(48,535
)Total comprehensive loss ($3,101,708)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2006


—



—



305,216,830



305,217



16,249,041



(16,031,427
)


(692,395
)


—



—



(1,212,699
)


(1,382,263
)Issuance of shares as payment for services


—



—



52,000,000



52,000



416,000



—



—



—



—



—



468,000Issuance of stock options


—



—



—



—



10,000



—



—



—



—



(10,000
)


—Proceeds from issuance of common stock in connection with exercise of stock options


—



—



1,000,000



1,000



9,000



—



—



—



—



—



10,000Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



784,560



784,560Net loss


—



—



—



—



—



(1,470,562
)


—



—



—



—



(1,470,562
)Foreign currency translation adjustment


—



—



—



—



—



—



(244,177
)


—



—



—



(244,177
)Total comprehensive loss ($1,714,741)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2007


—



—



358,216,830



358,217



16,684,041



(17,501,989
)


(936,572
)


—



—



(438,139
)


(1,834,442
)Issuance of shares as payment for services


—



—



10,025,000



10,025



121,600



—



—



—



—



—



131,625Issuance of shares in connection with acquisition of mineral permits


—



—



10,000,000



10,000



120,000



—



—



—



—



—



130,000Proceeds from issuance of common stock


—



—



5,750,000



5,750



135,500



—



—



—



—



—



141,250Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



431,634



431,634Net loss


—



—



—



—



—



(874,494
)


—



—



—



—



(874,494
)Foreign currency translation adjustment


—



—



—



—



—



—



289,988



—



—



—



289,988Total comprehensive loss ($584,506)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2008


—


$
—



383,991,830


$
383,992


$
17,061,141


$
(18,376,483
)


(646,584
)


—


$
—


$
(6,505
)

$
(1,584,439
)Proceeds from issuance of common stock


—



—



17,500,000



17,500



157,500



—



—



—



—



—



175,000Amortization of unearned compensation


—



—



—



—



—



—



—



—



—



6,505



6,505Net loss


—



—



—



—



—



(114,341
)


—



—



—



—



(114,341
)Foreign currency translation adjustment


—



—



—



—



—



—



(193,909
)


—



—



—



(193,909
)Total comprehensive loss ($308,237)


—



—



—



—



—



—



—



—



—



—



—Balance, December 31, 2009


—


$
—



401,491,830


$
401,492


$
17,218,641


$
(18,490,824
)


(840,493
)


—


$
—


$
—


$
(1,711,184
)
  See Notes to Consolidated Financial Statements.
  21
  
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 STATEMENTS OF CASH FLOWS
 YEARS ENDED DECEMBER 31, 2009 AND 2008 AND PERIOD FROM
 APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2009
 2009


2008


April 24,

2000 to

December 31,

2009Operating activities:Net loss

$
(114,341
)

$
(874,494
)

$
(18,490,824
)Adjustments to reconcile net loss to net cash used in operating activities:Costs of services paid through issuance of common stock


—



131,625



5,204,875Amortization of unearned compensation


6,505



431,634



3,954,500Amortization of discount on note payable


—



—



45,107Forgiveness of stock subscriptions


—



—



361,295(Loss) gain on modification of debt


—



—



(1,193,910
)Cost of mineral permits paid through the issuance of common stock


—



—



50,000Loss on disposal of property and equipment


—



70,533



74,680Depreciation


—



47,022



171,953Changes in operating assets and liabilities:Other assets


—



43,570



(34,133
)Accounts payable


(9,808
)


35,723



2,898,610Net cash used in operating activities


(117,644
)


(114,387
)


(6,957,847
)Investing activities:Purchases of property and equipment


—



—



(252,733
)Acquisition of Caribou Property


—



(75,000
)


(75,000
)Proceeds from sale of property and equipment


—



—



10,000Net cash used in investing activities


—



(75,000
)


(317,733
)Financing activities:Advances from stockholders, net


89,329



(52,228
)


1,736,919Proceeds from issuance of notes payable, net of payments


—



(45,000
)


212,729Proceeds from issuance of common stock and warrants


—



316,250



5,331,465Net cash provided by financing activities


89,329



219,022



7,281,113Net increase (decrease) in cash


(28,302
)


29,635



5,533Cash, beginning of period


33,848



4,213



—Cash, end of period

$
5,533


$
33,848


$
5,533Supplemental informationCash paid forInterest

$
—


$
—


$
895,023Income taxes

$
—


$
—


$
—
  See Notes to Consolidated Financial Statements.
  22
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.
 (An Exploration Stage Company)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 Note 1—Business and basis of presentation:
 
 Diamond Discoveries International Corp. (the “Company”) was incorporated in the State of Delaware on April 24, 2000. The Company is engaged in activities related to the exploration for mineral resources in Canada. It conducts exploration and related activities through contracts with third parties.
 
 As further explained in Note 3, the Company acquired mineral permits for property in the “Torngat Fields” located in the Province of Quebec, Canada. The Company intended to develop the permits from early stage exploration through completion of the exploration phase. Prior to any further exploration decisions, a mineral deposit must be appropriately assessed. Gathering this data usually takes several years. Once the appropriate data was gathered, management determined not to proceed any further with the exploration of this property.
 
 In March 2008, the Company acquired mineral rights for property located in the Thetford Mines area (the “Caribou Property”).  The Company intends to develop the mineral rights from the early stage exploration through completion of the exploration phase. Prior to any further exploration decisions, a mineral deposit must be appropriately assessed. Gathering this data usually takes several years. Once the appropriate data has been gathered, management will determine how to proceed any further with the exploration of this property.
 
 Other than contracting with third parties to conduct exploration and gather data on its behalf, the Company had not conducted any operations or generated any revenues as of December 31, 2009. Accordingly, it is considered an “exploration stage company” for accounting purposes.  In addition to exploration costs, the Company incurs general and administrative expense which consists primarily of professional fees relating to corporate filings and consulting and other expenses incurred in operating our business.
 
 The accompanying financial statements have been prepared assuming the Company will continue as a going concern. However, in addition to not generating any revenues, the Company had a working capital deficiency of approximately $1,949,000 and a stockholders’ deficiency of approximately $1,711,000 as of December 31, 2009. Management believes that the Company will not generate any revenues during the twelve month period subsequent to December 31, 2009 in which it will be gathering and evaluating data related to the mineral rights for the Caribou Property. Since its inception, the Company has received total consideration of $7,281,113 as a result of proceeds of shareholder advances, the issuance of notes payable and the sales of common stock, management believes that the Company will still need total additional financing of approximately $500,000 to continue to operate as planned during the twelve month period subsequent to December 31, 2009. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
 
 Management plans to obtain such financing through private offerings of debt and equity securities. However management cannot assure that the Company will be able to obtain any or all of the additional financing it will need to continue to operate through at least December 31, 2010 or that, ultimately, it will be able to generate any profitable commercial mining operations. If the Company is unable to obtain the required financing, it may have to curtail or terminate its operations and liquidate its remaining assets and liabilities.
 
 The accompanying financial statements do not include any adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue its operations as a going concern.
 
 Note 2—Summary of significant accounting policies:
 
 Use of estimates:
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
 Mining costs:
 
 Exploration and evaluation costs are expensed as incurred. Management’s decision to develop or mine a property will be based on an assessment of the viability of the property and the availability of financing. The Company will capitalize mining exploration and other related costs attributable to reserves in the event that a definitive feasibility study establishes proven and probable reserves. Capitalized mining costs will be expensed using the unit of production method and will also be subject to an impairment assessment.
  23
  Concentrations of credit risk:
 
 The Company maintains its cash in bank deposit accounts, the balances of which, at times, may exceed Federal insurance limits. Exposure to credit risk is reduced by placing such deposits with major financial institutions and monitoring their credit ratings.
 
 Impairment of long-lived assets:
 
 Impairment losses on long-lived assets, such as mining claims, are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the fair value of assets to their carrying amounts.
 
 Income taxes:
 
 Income tax expense is provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes.  Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes.  The differences relate primarily to the effects of net operating loss carry forwards.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.
 
 Refundable tax credit:
 
 The Company is eligible for a refundable tax credit given by the Province of Quebec to encourage mineral exploration in the province.  Eligible expenses include exploration expenses within Quebec.
 
 The Company files a tax return claiming the refundable tax credit.  However, the Quebec government subjects the return to a review process which may result in a substantial adjustment to the initial claimed credit prior to issuing an assessment of the refundable tax credit.  Due to the uncertainty of the amount approved by the Quebec government, the Company’s policy is to record the refundable tax credit at such time that it has been notified by the Quebec government of an assessment.  During the years ended December 31, 2009 and 2008, the Company did not receive any refunds under the program.
 
 Net earnings (loss) per share:
 
 The Company presents “basic” earnings (loss) per share and, if applicable, “diluted” earnings per share pursuant to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “Earnings per Share”.  Basic earnings (loss) per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding during each period. The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options and warrants, were issued during the period.
 
 Since the Company had a net loss for the years ended December 31, 2008, the assumed effects of the exercise of the warrants to purchase 95,576,849 shares of common stock that were issued during 2005 and the application of the treasury stock method would have been anti-dilutive.  Therefore, there is no diluted per share amounts in the 2008 statements of operations.  The warrants expired in 2008.
 
 Foreign currency translation and transactions:
 
 The functional currency of the Company’s operations is Canadian dollars.  The assets and liabilities arising from these operations are translated at current exchange rates and related revenues and expenses at average exchange rates in effect during the year.  Resulting translation adjustments, if material, are recorded in the statement of changes in stockholders' deficiency while foreign currency transaction gains and losses are included in operations.
 
 The Company recorded a loss of $114,341, $874,494 and $18,490,824 during the years ended December 31, 2009 and 2008 and the period from April 24, 2000 (Date of Inception) to December 31, 2009, respectively.  During the years ended December 31, 2009 and 2008, the Company recorded a net foreign currency translation adjustment of $(193,909) and $289,988, respectively, in its interest in the Caribou Property and Torngat Mountains operations reflecting a strengthening of the Canadian dollar against the U. S. dollar which is included in accumulated other comprehensive income (loss).
  24
  Comprehensive loss
 
 Comprehensive loss consists of net loss for the period, unrealized hedging transactions and foreign currency translation adjustments.
  25
  Recent accounting pronouncements:
 
 In June 2009, the FASB issued ASC 105, Codification which establishes FASB Codification as the source of authoritative generally accepted accounting pronouncements (“US GAAP”) recognized by the FASB to be applied by non-governmental entities.  The final rule was for interim and annual periods issued after September 15, 2009.  The adoption of ASC 105 did not have a material impact on the Company’s consolidated financial statements.
 
 In December 2007, the FASB issued ASC 805-10 (Prior authoritative literature SFAS No. 141(R)), “Business Combinations,” which revises the previously issued SFAS 141. ASC 805-10 establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquire.  The statement also provides guidance for recognizing and measuring goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. ASC 805-10 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and will be applied prospectively. The adoption of this statement is not expected to have a material impact on the Company’s consolidated financial statements.
 
 In December 2007, the FASB issued ASC 805-10-65 (Prior authoritative literature SFAS No. 160), “Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51.” ASC 805-10-65 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. ASC 805-10-65 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. ASC 805-10-65 is effective for financial statements issued for fiscal years beginning after December 15, 2008. ASC 805-10-65 will be applied prospectively, with a disclosure requirement for existing minority interests to be applied retrospectively. The adoption of this statement is not expected to have a material impact on the Company’s consolidated financial statements.
 
 Note 3—Permits:
 
 Pursuant to an agreement consummated on September 12, 2000, the Company acquired certain permits in the Torngat Fields from Peter Ferderber and S. G. Hawkins, who were key consultants and advisors to the Company, for total consideration of $90,540, of which $40,540 ($60,000 Canadian) represents the amount paid in cash and $50,000 represents the fair value of a total of 2,000,000 shares of the Company’s common stock issued to Messrs. Ferderber and Hawkins. The exchange of shares for the permits was a non-cash transaction that is not reflected in the accompanying statement of cash flows for the period from April 24, 2000 to December 31, 2009.
 
 In connection with the acquisition of these permits, the Company assigned to the sellers a 1% interest in the “net smelter returns” of the property, one-half of which is payable over the first $50,000,000 (Canadian) of revenues produced from the property. Such interest would terminate once the sellers receive a total of $10,000,000 (Canadian) based on such interest. Net smelter returns are determined by the net amount received from the sale to a smelter or other buyer of ore, ore concentrates or other products produced from the property.
 
 Mr. Hawkins owns Tandem Resources, Ltd. (“Tandem”). As part of the agreement for the purchase of the permits, the Company granted Tandem an option to purchase a 40% interest in a joint venture that would be formed between the Company and Tandem to conduct operations related to the properties covered by the permits at such time as the Company has incurred expenditures related to such operations totaling $5,000,000 (Canadian). The exercise price for the option will be $2,000,000 (Canadian). Mr. Ferderber also is the president of PGL.
 
 In 2002, the Company acquired additional permits for 50,000 acres of adjacent property in the Torngat Fields by staking the property and paying the requisite fees to the Quebec Department of Natural Resources. The Company performed exploration activities related to the Torngat Property through the end of 2007 at which time it was determined not to pursue any further exploration of that property.
 
 Pursuant to an agreement consummated on March 17, 2008, the Company acquired certain mineral rights in property located in the Thetford Mines area, part of the Appalachian Belt, Province of Quebec, Canada from Bertrand Brassard and Michel Lavoie for total consideration of $205,000, of which $75,000 represents the amount paid in cash and $130,000 represents the fair value of a total of 10,000,000 shares of the Company’s common stock issued to Messrs. Brassard and Lavoie.  The exchange of shares for the permits was a non-cash transaction that is not reflected in the accompanying statement of cash flows for the year ended December 31, 2008 and for the period from April 24, 2000 to December 31, 2009.
 
 In connection with the acquisition of these mineral rights, the Company agreed to pay the sellers a 2% royalty on the “net smelter returns” of the property. Net smelter returns are determined by the net amount received from the production of all metals and/or minerals from the property. The Company has the right to purchase, at any time prior to the beginning of any commercial production on the property, 1% royalty on the “net smelter returns” for a total cash payment of $1,000,000.
  26
  Note 4—Property and equipment:
 
 Property and equipment is stated at cost.  Depreciation is calculated using the straight-line method over the estimated useful lives of such assets.  Expenditures for maintenance and repairs are charged to expense as incurred.
 
 At December 31, 2009 and 2008, major classes of property and equipment are as follows:
 
 Estimated2009


2008

Useful LivesDrilling equipment

$
—


$
—

5 yearsLess accumulated depreciation


—



—Property and equipment, net

$
—


$
—
  Depreciation expense for the year ended December 31, 2009 and 2008 was $— and $47,022, respectively. During the year ended December 31, 2008, the Company recorded an impairment loss of $70,533 for the remaining balance of property and equipment which is included in general and administrative expenses in the accompanying statement of operations.
 
 Note 5—Notes payable:
 
 In November 2005, the Company and Prospecting Geophysics Ltd. (“PGL”) entered into an agreement whereby the amount due to PGL was converted to a non-interest bearing note payable totaling $1,500,000 (Canadian).  The note is secured with the permits identified in Note 3.  In connection with the agreement, the Company recorded a gain on the modification of debt of $1,349,623 during 2005.  The Company recorded the note using a 12% discount rate.  The Company was unable to make the scheduled payments ($600,000 Canadian) during 2006 under this note payable and therefore the note is effectively in default.
 
 Note 6—Stockholders’ deficiency:
 
 Preferred stock
 
 As of December 31, 2009, the Company was authorized to issue up to 20,000,000 shares of preferred stock with a par value of $.001 per share. The preferred stock may be issued in one or more series with dividend rates, conversion rights, voting rights and other terms and preferences to be determined by the Company’s Board of Directors, subject to certain limitations set forth in the Company’s Articles of Incorporation. No shares of preferred stock had been issued by the Company as of December 31, 2009.
 
 Common stock
 
 During the period from April 24, 2000 to December 31, 2000, the Company issued 150,000 shares of common stock as payment for legal services. Accordingly, general and administrative expenses in the accompanying statement of operations, and common stock and additional paid-in capital in the accompanying statements of stockholders’ deficiency, for the period from April 24, 2000 to December 31, 2004 was increased to reflect the estimated fair value of the shares of $3,750.
 
 On May 20, 2000, the Company completed the sale of 10,000,000 shares of common stock for $250,000, or $.025 per share, through a private placement intended to be exempt from registration under the Securities Act of 1933 (the “Act”). Initially, the buyer paid $25,000 in cash and $225,000 through the issuance of a 10% promissory note. The exchange of shares for a note receivable was a noncash transaction that is not reflected in the accompanying statement of cash flows for the period from April 24, 2000 to December 31, 2004. The 10% promissory note was paid on various dates through May 20, 2001.
 
 During the year ended December 31, 2002, the Company received total cash consideration of $734,959 as a result of the sale of 1,633,242 units of common stock and warrants to purchase common stock at $.45 per unit through private placements intended to be exempt from registration under the Act. Each unit consisted of one share of common stock and one warrant to purchase one share of common stock exercisable at $.75 per share for a two year period from the date of purchase. The Company had also received subscriptions through the private placements for the purchase of 51,758 units at $.45 per unit or a total of $23,291 as of December 31, 2002. The notes receivable from the subscribers are noninterest bearing and were due six months from the respective dates of sale, but remained outstanding at December 31, 2004. All the warrants remained outstanding as of December 31, 2004.
 
 In 2003, the Company issued 6,715,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $1,374,950, or $0.20 per share, for the fair value of the shares.
  27
  In May 2003, the Company issued 1,500,000 shares of its common stock in payment of accounts payable to Prospecting Geophysics, Ltd. of $148,423, or $0.10 per share, which approximated the fair value of the shares.
 
 From July 2003 to September 2003, the Company issued 1,810,123 shares of its common stock in payment of 8% demand notes payable of $126,708, or $0.07 per share, which approximated the fair value of the shares.
 
 In August 2003, in connection with a private placement of its common stock, the Company issued 2,000,000 shares of its common stock for $150,000, or $0.08 per share.  In addition, the Company issued 6,500,000 shares of its common stock for $65,000, or $0.01 per share, in connection with the exercise of stock options.
 
 In September 2003, the Company issued 5,000,000 shares of its common stock in payment of advances from stockholders of $525,000, or $0.11 per share, which approximated the fair value of the shares.
 
 In October 2003, the Company issued 2,500,000 shares of its common stock in payment of advances from stockholders of $250,000, or $0.10 per share, which approximated the fair value of the shares.  In addition, in connection with a private placement of its common stock, the Company issued 4,000,000 shares of its common stock for $300,000, or $0.08 per share, $281,250 of which represents a subscription receivable at December 31, 2004.  Also, the Company issued 540,000 shares of its common stock in payment for accounts payable of $54,000, or $0.10 per share, which approximated the fair value of the shares. Further, the Company issued 2,350,000 shares of its common stock for $225,500, or $0.10 per share, in connection with the exercise of stock options.
 
 In November 2003, the Company issued 1,200,000 shares of its common stock for $12,000, or $0.01 per share, in connection with the exercise of stock options.
 
 In December 2003, the Company issued 960,000 shares of its common stock in payment for accounts payable of $96,000, or $0.10 per share, which approximated the fair value of the shares.
 
 In 2004, the Company issued 15,467,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $1,546,700 for the fair value of the shares.
 
 In March 2004, in connection with a private placement of its common stock, the Company issued 2,500,000 shares of its common stock for $238,832.
 
 In March 2004, the Company issued 450,000 shares of its common stock in payment of $45,000 of accounts payable, which approximated the fair value of the shares.
 
 In May 2004, in connection with a private placement of its common stock, the Company issued 125,000 shares of its common stock valued at $12,500 as payment for the commission associated with the private placement.
 
 In May 2004, the Company issued 950,000 shares of its common stock in payment of $95,000 of accounts payable, which approximated the fair value of the shares.
 
 In July 2004, in connection with a private placement of its common stock, the Company issued 1,500,000 shares of its common stock for $150,000.  In addition, the Company issued 1,250,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $99,750 for the fair value of the shares.  Further, the Company issued 1,250,000 shares of its common stock in connection with the exercise of stock options.
 
 In December 2004, the Company issued 29,875,000 shares of its common stock in connection with the exercise of stock options.
 
 In January 2005, the Company issued 2,600,000 shares of its common stock in connection with the exercise of stock options.
 
 In July 2005, in connection with a private placement of its common stock, the Company issued 27,750,000 shares of its common stock for $971,250.  In addition, the Company issued 8,587,858 shares of its common stock in payment of $302,500 of accounts payable, which approximated the fair value of the shares.
 
 In August 2005, the Company issued 1,100,000 shares of its common stock in connection with the exercise of stock options.
  28
  In September 2005, in connection with a private placement of its common stock, the Company issued 2,300,000 shares of its common stock for $80,500.
 
 In October 2005, the Company issued 6,000,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $210,000 for the fair value of the shares.
 
 In December 2005, in connection with a private placement of its common stock, the Company issued 39,833,657 shares of its common stock for $1,394,178.  In addition, the Company issued 27,893,192 shares of its common stock in payment of $890,367 of accounts payable, which approximated the fair value of the shares.  Further, the Company issued 24,425,000 shares of its common stock in connection with the exercise of stock options.
 
 In January 2006, the Company issued 11,500,000 shares of its common stock in connection with the exercise of stock options.  In addition, in connection with a private placement of its common stock, the Company issued 100,000 shares of its common stock for $3,500.  Finally, the Company issued 46,000,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $1,380,000 which approximated the fair value of the shares.
 
 In September 2007, the Company issued 52,000,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $468,000 which approximated the fair value of the shares.  In October 2007, the Company issued 1,000,000 shares of its common stock in connection with the exercise of stock options.
 
 In May 2008, in connection with a private placement of its common stock, the Company issued 5,750,000 shares of its common stock for $141,250. In June 2008, the Company issued 10,000,000 shares of its common stock in connection with the acquisition of the Caribou property which is recorded in other assets in the accompanying balance sheet of $130,000 which approximated the fair value of the shares.  In October 2008, the Company issued 10,025,000 shares of its common stock in exchange for services performed by various consultants and recorded a charge to general and administrative expenses of $131,625 which approximated the fair value of the shares.
 
 In April 2009, in connection with a private placement of its common stock, the Company issued 17,500,000 shares of its common stock for $175,000.
 
 The issuances of common stock for services and in payment of accounts payable, 8% demand notes payable, advances to stockholders and acquisitions were non-cash transactions and, accordingly, they are not reflected in the accompanying statements of cash flows for the years ended December 31, 2009 and 2008 and the period from April 24, 2000 (Date of Inception) to December 31, 2009.
 
 Stock Option Plans
 
 2005 Plan
 
 On November 14, 2005, the Company adopted the Diamond Discoveries International Corp. 2005 Stock Incentive Plan (the “2005 Plan”).  Under the 2005 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2005 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2005 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2005 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2005 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2005 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2005 Plan.  Options granted under the 2005 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the 2005 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the 2005 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
  29
  2004 Plan
 
 On September 30, 2004, the Company adopted the Diamond Discoveries International Corp. 2004 Stock Incentive Plan (the “2004 Plan”).  Under the 2004 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2004 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2004 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2004 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2004 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2004 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2004 Plan.  Options granted under the 2004 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the 2004 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the 2004 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
 
 2003 Plan
 
 On May 30, 2003, the Company adopted the Diamond Discoveries International Corp. 2003 Stock Incentive Plan (the “Plan”).  Under the Plan, 15,000,000 shares of common stock are reserved for issuance.  The purpose of the Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the Plan to all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the Plan and to prescribe, amend and rescind the rules and regulations pertaining to the Plan.  Options granted under the Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of an incentive option granted to a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
 
 In 2003, the Company issued options to acquire 13,875,000 shares of its common stock at a weighted average exercise price of $.04 per share to consultants and other non-employees.  The options had an aggregate fair market value of $1,437,000 at the respective dates of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $1,437,000 to record the fair value of the options.
 
 In February 2004, the Company issued options to acquire 1,000,000 shares of its common stock at an exercise price of $.10 per share to consultants and other non-employees.  The options had an aggregate fair market value of $90,000 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $90,000 to record the fair value of the options.
  30
  In December 2004, the Company issued options to acquire 33,975,000 shares of its common stock at an exercise price of $.01 per share to consultants and other non-employees.  The options had an aggregate fair market value of $1,049,000 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $1,049,000 to record the fair value of the options.
 
 In July 2005, the Company issued options to acquire 1,150,000 shares of its common stock at an exercise price of $.01 per share to consultants and other non-employees.  The options had an aggregate fair market value of $34,500 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $34,500 to record the fair value of the options.
 
 In December 2005, the Company issued options to acquire 30,000,000 shares of its common stock at an exercise price of $.01 per share to consultants and other non-employees.  The options had an aggregate fair market value of $1,184,000 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $1,184,000 to record the fair value of the options.
 
 In January 2006, the Company issued options to acquire 5,000,000 shares of its common stock at an exercise price of $.01 per share to consultants and other non-employees.  The options had an aggregate fair market value of $150,000 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $150,000 to record the fair value of the options.
 
 In October 2007, the Company issued options to acquire 1,000,000 shares of its common stock at an exercise price of $.01 per share to consultants and other non-employees.  The options had an aggregate fair market value of $10,000 at the date of issuance as determined based on the Black-Scholes options-pricing model. Accordingly, the Company initially increased unearned compensation and additional paid-in capital by $10,000 to record the fair value of the options.
 
 The Company recorded a charge of $6,505 and $431,634 to compensation expense to amortize unearned compensation for the years ended December 31, 2009 and 2008, respectively.
 
 The following assumptions were used to price options granted during the years ended December 31, 2009 and 2008, all of whose exercise price was less than market at the date of grant: Risk free rate of return, 4%; expected life, 3 years; expected volatility, 300.59%; expected dividends, zero.
 
 The following table summarizes information with respect to options granted under the 2005 Plan, 2004 Plan and the 2003 Plan as of and for the years ended December 31, 2009 and 2008.
 
 2009


2008Shares


Weighed

Average

Exercise

Price


Shares


Weighted

Average

Exercise

PriceOptions outstanding beginning of year


—


$
—



—


$
—Options expired


—


$
—



—


$
—Options exercised


—


$
—



—


$
—Options granted


—


$
—



—


$
—Options outstanding end year


—


$
—



—


$
—Options exercisable end of year


—


$
—



—


$
—Options price range, end of year

$
—






$
—Options price range for exercised shares

$
—






$
—Options available for grant at end of year


3,700,000







3,700,000Weighted average fair value of options granted during the year

$
—






$
—Weighted average exercise price of options granted during the year

$
—






$
—
 
 Warrants
 
 In August 2003, in connection with its private placement of common stock, the Company issued warrants to acquire 2,000,000 shares of its common stock at an exercise price of $.075 per share.  The warrants expired in August 2006.
  31
  In January 2004, in connection with its private placement of common stock, the Company issued warrants to acquire 2,500,000 shares of its common stock at an exercise price of $0.10 per share.  The warrants expired in January 2007.
 
 In 2005, in connection with its private placement of common stock, the Company issued warrants to acquire 95,576,849 shares of its common stock at an exercise price of $.035 per share.  The warrants expired in December 2008.
 
 Note 7—Income taxes:
 
 As of December 31, 2009, the Company had net operating loss carryforwards of approximately $19,331,000 available to reduce future Federal taxable income which will expire at various dates through 2024. The Company had no other material temporary differences as of that date. Due to the uncertainties related to, among other things, the changes in the ownership of the Company, which could subject those loss carryforwards to substantial annual limitations, and the extent and timing of its future taxable income, if any, the Company offset the deferred tax assets of approximately $7,732,000 attributable to the potential benefits from the utilization of those net operating loss carryforwards by an equivalent valuation allowance as of December 31, 2009.
 
 The Company had also offset the potential benefits from net operating loss carryforwards of approximately $7,732,000 and $7,609,000 by equivalent valuation allowances as of December 31, 2009 and 2008. As a result of the increases in the valuation allowance of $123,000 for the year ended December 31, 2009, $234,000 for the year ended December 31, 2008 and $7,732,000 for the period from April 24, 2000 to December 31, 2009, the Company did not recognize any credits for income taxes in the accompanying statements of operations to offset its pre-tax losses in any of those periods.
 
 Note 8—Guarantee:
 
 On March 14, 2003, the Company became a guarantor of a promissory note issued by one of its stockholders with an outstanding balance of approximately $101,200 that was originally scheduled to mature on July 31, 2003. The maturity dates of the promissory note and the guaranty have been extended to April 30, 2011.
 
 *        *        *
 
 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
 
 None
 
 Item 9A(T). Controls and Procedures
 
 (A) EVALUATION OF DISCLOSURE 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 December 31, 2009. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Antonio Sciacca and former Chief Financial Officer, Mr. Edward Williams. Based upon that evaluation, our Chief Executive Officer and former Chief Financial Officer concluded that, as of December 31, 2009, our disclosure controls and procedures were not effective. In making this evaluation, the Chief Executive Officer and former Chief Financial Officer considered, among other things, the material weakness in our internal control over financial reporting described below.
 
 Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and former Chief Financial Officer, to allow timely decisions regarding required disclosure.
  32
  (B) MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 
 Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with United States’ generally accepted accounting principles (US GAAP), including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
 
 Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this evaluation, management concluded that, as of December 31, 2009, the Company did not maintain effective internal controls over financial reporting due to our limited number of employees which resulted in our inability to effectively segregate all conflicting duties.
 
 Currently we use one consultant to assist in the preparation of the financial statements and accompanying footnotes.
 
 To remedy this material weakness, we will, to the extent possible, implement procedures to assure the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals. Further, concurrent with having sufficient resources we will engage additional individuals to assist us in remedying this material weakness.
 
 Limitations on the Effectiveness of Internal Controls
 
 Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and former Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
 
 This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in the Annual Report.
 
 (C) CHANGES IN INTERNAL CONTROL
 
 There have been no significant changes in our internal controls over financial reporting during the quarter ended December 31, 2009 that have materially affected or are reasonably likely to materially affect such controls.
 
 Item 9B. Other Information
 
 None.
  33
 
 PART III
 
 Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(A) Of The Exchange Act
 
 The following Table sets forth certain information regarding the executive officers and directors of the Company as of May 4, 2011.  All officers and directors are elected for a term of one year and until their successors are elected.
 
 Name

Age

Company PositionAntonio Sciacca

51

Chairman, President, CEO, and Director
 
 Antonio Sciacca
  Mr. Sciacca has been our chief executive officer since June 2008 and a director since March 2007.  Since 1995 Mr. Sciacca has been the Director of Programs/Operations of North American Controls Inc a manufacturing company with facilities for the U.S. defense industry.  Mr. Sciacca currently sits on the board of Immaculate Conception schools in Warren, Michigan.
  Conflicts of Interest
 
 Our management has other financial and business interests to which a significant amount of time is devoted which may pose conflicts of interest with regard to allocation of their time and efforts. Teodosio Pangia, our former president, director and CEO beneficially owns 1.1% of our common stock and is also the sole principal of Epwort Trading, Ltd., a holder of 13.3% of our common stock, and beneficially owns and/or controls, either directly or indirectly, seven companies, Altea Investments, Ltd., Gata Investments, Ltd., Baychester Investments, Ltd., TVP Capital Corp., Bekeman Investments, Ltd., Aester Investment Holdings Limited and S D Investments, Ltd., which in the aggregate hold 8,243,000 shares or 2.0% of our shares of common stock. There can be no assurance that management will resolve all conflicts of interest in favor of Diamond Discoveries. Failure of management to conduct Diamond Discoveries’ business in its best interest may result in liability of the management to Diamond Discoveries.
 
 Committees
 
 The entire Board of Directors performs the functions of the audit committee and compensation committee.  The Company does not have an audit committee financial expert serving on the audit committee.  The Company intends to add such persons to the Board of Directors and the Audit Committee at such time as the Company has adequate funds to compensate such persons for their services.
 
 Section 16(a) Beneficial Ownership Reporting Compliance
 
 Section 16(a) of the Security Exchange Act of 1934 requires directors, executive officers and 10% or greater shareholders of the Company to file with the Securities and Exchange Commission initial reports of ownership (Form 3) and reports of changes in ownership of equity securities of the Company (Form 4 and Form 5) and to provide copies of all such Forms as filed to the Company. Based solely on our review of the copies of these forms received by us or representations from certain reporting persons, we believe that SEC beneficial ownership reporting requirements for fiscal 2008 were met with the following exceptions:
 
 Our former CEO Teodosio V. Pangia failed to timely file Form 3 and a Form 4 to report transactions in March 2003 and has not yet filed these reports.
  34
  Code of Ethics
 
 We have a code of ethics (the “Code”) that applies to members of our Board of Directors, our officers including our president (being our principal executive officer), and our chief financial officer (being our principal financial and accounting officer).  The Code sets forth written standards that are designed to deter wrongdoing and to promote: honest and ethical conduct, full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us; compliance with applicable governmental laws, rules and regulations; prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and accountability for adherence to the Code.
 
 A copy of the Code is attached as an exhibit to the Form 10-K filed on April 14, 2004.
 
 Item 11. Executive Compensation
 
 The table below shows the annual, long-term and other compensation for services in all capacities to the Company and its subsidiaries paid during the years ended December 31, 2009 and 2008, to the Chief Executive Officer and the other four most highly compensated executive officers of the Company during the years ended December 31, 2009 and 2008 (our “named executive officers”):
 
 SUMMARY COMPENSATION TABLE
 
 Annual Compensation


Long Term CompensationName and Position

Year

Salary ($)


Bonus ($)


Other

Annual

Compen-
sation ($)


Restricted

Stock

Awards ($)


Securities

Under-lying

Options/

SARS (#)


All Other

Compen-
sation ($)Antonio Sciacca

2009

$
—Chief Executive Officer

2008


—Edward C. Williams(1)

2009

$
—Chief Financial Officer

2008


—
 (1)
During 2010, Mr. Williams resigned from his positions of Chief Financial Officer and Director.
 
 Grants of Plan Based Awards
 
 There were no grants under plan based awards during fiscal 2009 or 2008.
 
 Outstanding Equity Awards at Fiscal Year-End
 
 There were no outstanding equity awards as of December 31, 2009 for the CEO or CFO.
 
 Long Term Incentive Plans - Awards in Last Fiscal Year
 
 None.
 
 Compensation of Directors
 
 Standard Arrangements.
 
 At present, the Company does not pay its directors for attending meetings of the Board of Directors, although the Company may adopt a director compensation policy in the future. The Company has no standard arrangement pursuant to which directors of the Company are compensated for any services provided as a director or for committee participation or special assignments.
 
 Other Arrangements.
 
 During the years ended December 31, 2009 and 2008, and except as disclosed elsewhere in this report, no director of the Company received any form of compensation from the Company.
 
 Employment Contracts and Termination of Employment, and Change-in-Control Arrangements.
 
 We have not entered into employment agreements with any of our officers or directors.
  35
  Item 12. Security Ownership of Certain Beneficial Owners and Management
 
 The following table sets forth the name and address of each officer and director of the Company and each person who owns beneficially more than five percent of the Common Stock of the Company, and the number of shares owned by each such person and by all officers and directors as a group as of May 4, 2011:
  Name and Address of Beneficial Owner(1)

Amount and Nature of Ownership


Approximate

% of Class(2)Antonio Sciacca, Chairman, President, CEO and Director


14,114,286



3.5
%Directors and Officers as a Group


14,114,286



3.5
%Teodosio V. Pangia


66,564,763
(3)


16.5
%Epwort Trading Ltd.(4)


53,821,763



13.3
%
  * Less than 1%
 (1)
Unless otherwise indicated, the beneficial owner’s address is the same as the Company’s principal office.
 (2)
Percentages calculated on the basis of the amount of outstanding shares plus, for each person, any shares that person has the right to acquire within 60 days pursuant to options or other rights.
 (3)
Includes an aggregate of 8,243,000 shares held TVP Capital Corp., Altea Investments, Ltd., Gata Investments, Ltd., Bekeman Investments, Ltd., SD Investments, Ltd., Baychester Investments Ltd., and Aester Investments Holdings Limited, companies beneficially owned and/or controlled (directly or indirectly) by Mr. Pangia, 4,500,000 shares held by Mr. Pangia and 53,821,763 shares held by Epwort Trading, Ltd., see footnote (4) below.
 (4)
Teodosio V. Pangia is the sole officer, director and shareholder of Epwort Trading, Ltd.
 
 Equity Compensation Plan Information:
 
 Number of securities to be

issued upon exercise of

outstanding options,

warrants and rights


Weighted-average exercise

price of outstanding options,

warrants and rights


Number of securities

available for future issuance

under equity compensation

plans (excluding securities

reflected in column

(a))(a)


(b)


(c)Equity compensation plans approved by security holders


0


$
0.00



1,500,000Equity compensation plans not approved by security holders


0


$
0.00



2,200,000Total


0


$
0.00



3,700,000
 
 Stock Option Plans
 
 2005 Plan
 
 On November 14, 2005, the Company adopted the Diamond Discoveries International Corp. 2005 Stock Incentive Plan (the “2005 Plan”).  Under the 2005 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2005 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2005 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2005 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2005 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2005 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2005 Plan.  Options granted under the 2005 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
  36
  Any incentive stock option that is granted under the 2005 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the 2005 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
 
 2004 Plan
 
 On September 30, 2004, the Company adopted the Diamond Discoveries International Corp. 2004 Stock Incentive Plan (the “2004 Plan”).  Under the 2004 Plan, 35,000,000 shares of common stock are reserved for issuance.  The purpose of the 2004 Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  Options granted under the 2004 Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the 2004 Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The 2004 Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the 2004 Plan and to prescribe, amend and rescind the rules and regulations pertaining to the 2004 Plan.  Options granted under the 2004 Plan generally vest over three years.  No option is transferable by the optionee other than by will or the laws of descent and distribution and each option is exercisable, during the lifetime of the optionee, only by the optionee.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the 2004 Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant.
 
 Each option granted under the 2004 Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
 
 2003 Plan
 
 On May 30, 2003, the Company adopted the Diamond Discoveries International Corp. 2003 Stock Incentive Plan (the “Plan”).  Under the Plan, 15,000,000 shares of common stock are reserved for issuance.  The purpose of the Plan is to provide incentives for officers, directors, consultants and key employees to promote the success of the Company, and to enhance the Company’s ability to attract and retain the services of such persons.  The Plan orivudes for the grant of incentive stock options and nonqualified stock options (“Options”) and restricted stock awards (“Restricted Stock Awards”) and Stock Appreciation Rights, Performance Shares, Dividend Equivalent Payments, and Other Stock Based Awards (“Options,”“Restricted Stock Awards,” and “Stock Appreciation Rights,” are collectively referred to herein as “Awards”). Options granted under the Plan may be either: (i) options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified stock options.  Stock options may be granted under the Plan for all employees and consultants of the Company, or employees of any present or future subsidiary or parent of the Company.  The Plan is administered by the Board of Directors.  The Compensation Committee is empowered to interpret the Plan and to prescribe, amend and rescind the rules and regulations pertaining to the Plan.  Options granted under the Plan generally vest over three years.  The Compensation Committee may not receive options.
 
 Any incentive stock option that is granted under the Plan may not be granted at a price less than the fair market value of the Company’s Common Stock on the date of grant (or less than 110% of the fair market value in the case of holders of 10% or more of the total combined voting power through all classes of stock of the Company or a subsidiary or parent of the Company.)  Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company’s Common Stock on the date of grant, but in no event shall such exercise price be less than 55% of such fair market value.
 
 Each option granted under the Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of an incentive stock option granted to a holder of more than 10% of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient’s employment with the Company, or as determined by the Compensation Committee.
  37
  Awards are generally non-transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order.
 
 The Company’s Board of Directors may at any time, and from time to time, amend, terminate, or suspend one or more of the Plan in any manner it deems appropriate, provided that such amendment, termination or suspension cannot adversely affect rights or obligations with respect to shares or options previously granted, unless the Award recipient consents to such changes in writing. The Board of Directors may not, without shareholder approval: make any amendment which would materially modify the participation eligibility requirements for the 2005 Plan and 2004 Plan, to the extent they require approval in order to satisfy the Internal Revenue Code requirements; make other modifications requiring stockholder approval to satisfy the Internal Revenue Code requirements, increase the total number of shares of common stock which may be issued pursuant to the 2005 Plan and 2004 Plan, except in the case of a reclassification of the Company’s capital stock or a consolidation or merger of the Company.
 
 Item 13. Certain Relationships and Related Transactions.
 
 Teodosio Pangia, our former president, director and CEO, beneficially owns 4,500,000 shares or 1.1% of our shares or common stock and is the sole principal of Epwort Trading Ltd., which owns 53,821,763 shares, or 13.3% of our shares of common stock and beneficially owns and/or controls, either directly or indirectly, seven companies, TVP Capital Corp., Altea Investments, Ltd., Gata Investments, Ltd., Baychester Investments, Ltd., Bekeman Investments, Ltd., Aester Investments Holdings Limited and S D Investments, Ltd., which in the aggregate hold 8,243,000 shares or 2.0% of our shares of common stock.
 
 We entered into an Acquisition Agreement dated September 12, 2000 with Mr. Ferderber, Mr. Hawkins and Tandem Resources Ltd. The Acquisition Agreement provides for us to purchase certain mineral exploration permits from Messrs. Ferderber and Hawkins. Such permits cover 469.05 square kilometers in the Torngat fields in northwest Quebec, Canada, on the eastern shore of Ungava Bay. As consideration for the acquisition of these permits, we have issued 1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins and have paid $35,000 Canadian to Mr. Hawkins and $25,000 Canadian to Mr. Ferderber.
 
 In addition, the Acquisition Agreement further provides for an option to Tandem Resources Ltd., to purchase 40% of the properties covered by the permits conditioned on (i) the Company expending $5,000,000 Canadian on exploration of the properties; (ii) Tandem paying us $2,000,000 Canadian and (iii) Tandem entering into a joint venture agreement with us to operate the properties within 60 days of our demonstrating expenditure of $5,000,000 Canadian on exploration of the properties. In addition, we will have twenty-one (21) days from the date we notify Tandem that we have expended $5,000,000 Canadian on exploration of the properties, to negotiate a financing agreement with Tandem to provide Tandem with the $2,000,000 Canadian required to exercise the option. Should no agreement be reached in the twenty-one (21) day period, our right to provide this financing shall expire. Also, upon the closing of the acquisition, we assigned to Messrs. Ferderber and Hawkins a one (1%) percent interest in the Net Smelter Returns of the properties, half of which is payable over the first $50,000,000 Canadian in revenues from the properties. This interest in the Net Smelter Returns terminates once Ferderber and Hawkins have received, in the aggregate, $10,000,000 Canadian.
 
 In connection with the Acquisition Agreement, Mr. Ferderber has executed an agreement with us as of June 20, 2000 which transfers mineral rights over all of the properties to us.
 
 We entered into a Prospecting and Survey Agreement with Prospecting Geophysics Ltd. dated November 20, 2000, whereby Prospecting Geophysics Ltd. will act as the project manager for the Company’s mineral exploration operations. Peter Ferderber is the President of Prospecting Geophysics Ltd. Under the agreement, we are to pay for Mr. Ferderber’s services at a rate of $500 per day, on days that he personally attends the properties, in addition to reimbursing all expenses incurred by Prospecting Geophysics on behalf of the Company. Mr. Ferderber anticipates attending the properties approximately five to seven days every month. Prospecting Geophysics is required under the agreement to conduct prospecting and surveying activities on our behalf. The agreement has a term of eighteen (18) months with automatic renewal unless either party gives 30 days’ notice of its intent to terminate. During the years ended December 31, 2006 and 2005 and the periods from April 24, 2000 (date of inception) to December 31, 2006, we incurred exploration costs by Prospecting Geophysics Ltd. of $0 Canadian, $0 Canadian and $3,992,022Canadian, respectively. In addition, the Company owed Prospecting Geophysics Ltd. $1,500,000 Canadian at December 31, 2006.
  38
  Item 14.  Principal Accountant Fees and Services
 
 During 2009 and 2008, the Company incurred the following fees for professional services rendered by the principal accountant:
 
 2009


2008Fees for audit services

$
15,100


$
26,800Fees for audit-related services

$
0


$
0Tax fees

$
0


$
0All other fees

$
0


$
0
 
 The Audit Committee pre-approves all audit and non-audit services to be performed by the Company’s independent auditors.
 
 Item 15. Exhibits and Reports on Form 8-K.
 
 There were no Current Reports on Form 8-K filed by the Registrant during the fourth quarter of the calendar year ended December 31, 2009.
 
 Exhibit

Number

Description of Document3.1

Articles of Incorporation as filed on April 24, 2000(1)3.2

Bylaws of Diamond Discoveries International Corp.(1)10.1

Acquisition Agreement dated September 12, 2000 between the Company and Peter Ferderber, Stanley Hawkins and Tandem Resources Ltd.(2)10.2

Prospecting and Survey Agreement between Prospecting Geophysics Ltd and the Company dated August 14, 2000.(1)10.3

Transfer of Mining Rights between Peter Ferderber and the Company dated June 20, 2000.(1)10.4

Option Agreement between Diamond Discoveries International Corp. and Tandem Resources Ltd. dated September 12, 2000.(2)10.5

Revised Prospecting and Survey Agreement between Prospecting Geophysics Ltd. and the Company dated November 20, 2000.(2)10.6

Investment Agreement, dated as of May 10, 2007 by and between Diamond Discoveries International Corp. and Dutchess Private Equities Fund, Ltd.(4)10.7

Registration Rights Agreement, dated as of May 10, 2007, by and between Diamond Discoveries International Corp. and Dutchess Private Equities Fund, Ltd.(4)14

Code of Ethics for the Chief Executive Officer and Chief Financial Officer(3)31.1

Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.32.1

Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350, Section 906 of the Sarbanes Oxley Act of 2002.99.1

Title opinion of Lavery, de Billy on the Mining Exploration Permits.(1)
 
 
 (1)
Previously filed on September 21, 2000 as part of the Company’s Registration Statement on Form 10-SB, File No. 0-31585.
 (2)
Previously filed on December 1, 2000 as part of the Company’s Amended Registration Statement on Form 10-SB, File No. 0-31585.
 (3)
Previously filed on April 14, 2004 as an exhibit to Form 10-K.
 (4)
Previously filed on May 14, 2007 as an exhibit to Form 8-K.
  39
 
 SIGNATURES
 
 In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 DIAMOND DISCOVERIES INTERNATIONAL CORP.By:
/s/ Antonio SciaccaAntonio Sciacca,

Chief Executive Officer and DirectorDated: May 4, 2011
 
 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
 By:
/s/ Antonio SciaccaAntonio Sciacca,

Chief Executive Officer and DirectorDated: Mat 4, 2011
  40