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EX-31 - AMERICAN INTERNATIONAL VENTURES, INC. FORM 10-Q - AMERICAN INTERNATIONAL VENTURES INC /DE/ex311.htm
EX-32 - CERTIFICATION - AMERICAN INTERNATIONAL VENTURES INC /DE/ex32.htm
EX-31 - CERTIFICATION - AMERICAN INTERNATIONAL VENTURES INC /DE/ex312.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


 

 

 

x

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2016

OR

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number 000-30368


American International Ventures, Inc.

(Name of Small Business Issuer in its charter)


 

 

 

Delaware

 

22-3489463

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

15122 Tealrise Way

Lithia, Florida

 


33547

(Address of principal executive offices)

 

(Zip Code)


 

(813) 260-2866

(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 12 months and (2) has been subject to such filing requirements for the past 90 days.    x Yes o No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     x Yes o No

  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

  

Large accelerated filer  o    Accelerated filer   o    Non-accelerated filer  o    Smaller Reporting Company x


Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)   o Yes x No


Indicate the number of shares outstanding of each of the issuers classes of common stock, as of April 21, 2016: 211,649,945 shares of Common Stock, $.00001 par value.



1





TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION

3

Item 1.  Financial Statements

3

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

12

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

15

Item 4. Controls and Procedures.

15

PART II – OTHER INFORMATION

16

Item 1. Legal Proceedings.

16

Item 1A. Risk Factors.

16

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

16

Item 3. Defaults Upon Senior Securities.

16

Item 4. Mine Safety Disclosures.

16

Item 5. Other Information.

16

Item 6. Exhibits

16











2



PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements


AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

February 29, 2016

 

May 31, 2015

 

ASSETS

 

 

 

 

Current Assets

 

 

 

 

Cash

$                     248,022

 

$                 22,121

 

Miscellaneous receivables

21,172

 

22,748

 

Total current assets

269,194

 

44,869

 

 

 

 

 

 

Fixed Assets

 

 

 

 

Vehicles

150,039

 

150,039

 

Mining equipment

502,400

 

502,400

 

Office furniture and equipment

32,444

 

30,022

 

Total assets

684,883

 

682,461

 

Less accumulated depreciation

337,645

 

261,299

 

Net fixed assets

347,238

 

421,162

 

 

 

 

 

 

Other Assets

 

 

 

 

Investment in securities

6,380

 

6,380

 

Mining claims

911,707

 

861,707

 

 

 

 

 

 

Total other assets

918,087

 

868,087

 

TOTAL ASSETS

$                 1,534,519

 

$             1,334,118

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current Liabilities

 

 

 

 

Current portions of notes payable

$                      13,248

 

$                 89,500

 

Accounts payable and accrued expenses

78,534

 

149,250

 

Taxes payable

65,223

 

73,027

 

Advances from officers and directors

113,994

 

238,325

 

Total current liabilities

270,999

 

550,102

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

Long term portions of notes payable

9,577

 

14,707

 

Warrant liability

27,150

 

27,150

 

Total long term liabilities

36,727

 

41,857

 

Total Liabilities

307,726

 

591,959

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

Common stock - authorized, 400,000,000 shares of $.00001 par value; issued and outstanding, 211,649,945 and 212,899,945 shares, respectively

2,170

 

2,129

 

Additional paid in capital

7,369,794

 

7,204,086

 

Accumulated  deficit

(6,119,261)

 

(6,435,968)

 

Total American International Ventures, Inc.  stockholders’ equity

1,252,703

 

770,247

 

Non controlling interest

(25,910)

 

(28,088)

 

Total stockholders' equity

1,226,793

 

742,159

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$             1,534,519

 

$           1,334,118

 


The accompanying notes are an integral part of these financial statements.



3




 

 

 

 

 

 

 

 

 

AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Month Periods Ended

February 29 and 28,

 

Nine Month Periods Ended

February 29 and 28,

 

 

2016

 

2015

 

2016

 

2015

Sales

 

$                    -

 

$                   -

 

$                   -

 

$           58,278

Cost of goods sold

 

-

 

-

 

-

 

30,340

Gross profit

 

-

 

-

 

-

 

27,938

 

 

 

 

 

 

 

 

 

Administrative expenses

 

292,933

 

(51,854)

 

407,682

 

479,661

Operating loss

 

(292,933)

 

(51,854)

 

(407,682)

 

(451,723)

 

 

 

 

 

 

 

 

 

Other Income and Expense:

 

 

 

 

 

 

 

 

Change in valuation of warrants

 

-

 

-

 

-

 

108,600

Gain (loss) on sales of mining rights

 

-

 

(48,000)

 

719,398

 

(206,500)

Interest income

 

12

 

(109)

 

12

 

2,973

Interest expense

 

(780)

 

(3,437)

 

7,157

 

(37,144)

Total other income (expense)

 

(768)

 

(51,546)

 

726,567

 

(132,071)

 

 

 

 

 

 

 

 

 

Net income (loss) before taxes

 

(293,701)

 

(103,400)

 

318,885

 

(583,794)

Provision for income taxes

 

 

 

 

 

 

 

5,008

 

 

 

 

 

 

 

 

 

Net Loss

 

(293,701)

 

(103,400)

 

318,885

 

(588,802)

 

 

 

 

 

 

 

 

 

Net income ( loss) attributable to noncontrolling interests

 

(1,153)

 

-

 

(2,178)

 

11,919

Net income (loss) attributable to American International Ventures, Inc.

 

$     (294,854)

 

$      (103,400)

 

$          316,707

 

$        (576,883)

 

 

 

 

 

 

 

 

 

Net income (loss) Per Share – Basic and Diluted

 

$                    -

 

$                     -

 

$                      -

 

$                      -

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding

 

216,444,389

 

210,294,389

 

212,344,389

 

208,879,044

 

 

 

 

 

 

 

 

 


The accompanying notes are an integral part of these financial statements.



4




 

 

 

 

 

AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

Nine Month Periods Ended

February 29 and 28,

 

 

2016

 

2015

 

 

 

 

 

Cash Flows From Operating Activities:

 

 

 

 

Net income (loss)

 

$            318,885

 

$            (588,802)

Adjustments to reconcile net loss to net cash consumed by operating activities:

 

 

 

 

Charges and credits not requiring the use of cash:

 

 

 

 

Depreciation

 

76,345

 

41,719

Gain on sale of securities

 

-

 

(1,500)

Equity items issued for services

 

60,750

 

246,800

Loss (gain) on sale of mining claim

 

-

 

208,000

Interest charge related to debt discount

 

-

 

526

Interest on convertible loans

 

-

 

-

Gain on revaluation of warrants

 

-

 

(108,600)

Changes in assets and liabilities:

 

 

 

 

Increase (decrease) in accounts payable and accrued   expenses

 

(70,716)

 

58,259

Increases in taxes payable

 

(7,804)

 

4,793

Decrease in miscellaneous receivables

 

1,575

 

-

Decrease (increase) in inventory

 

-

 

31,228

 

 

 

 

 

Net cash consumed by operating activities

 

379,035

 

(107,577)

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

Purchases of fixed assets

 

(2,421)

 

-

Investment in mining claims

 

(50,000)

 

-

 

 

 

 

 

Net cash consumed by investing activities

 

(52,421)

 

-

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

Contributions to paid in capital

 

105,000

 

-

Proceeds from issuances of demand notes

 

-

 

105,325

Payments on notes payable

 

(81,382)

 

(8,840)

Repayment of advances from officers and directors

 

(124,331)

 

-

 

 

 

 

 

Net Cash provided by financing activities

 

(100,713)

 

96,485

 

 

 

 

 

Net change in cash

 

225,901

 

(11,092)

 

 

 

 

 

Cash balance, beginning of period

 

22,121

 

12,862

 

 

 

 

 

Cash balance, end of period

 

$              248,022

 

$                 1,770



The accompanying notes are an integral part of these financial statements.



5



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



1. BASIS OF PRESENTATION


The unaudited interim consolidated financial statements of American International Ventures, Inc. ("the Company") as of February 29, 2016 and for the three and nine month periods ended February 29, 2016 and February 28, 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations for the nine-month period ended February 29, 2016 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2016.


Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2015.


2. BACKGROUND


On March 23, 2012, the Company entered into a share exchange agreement with Placer Gold Prospecting, Inc. (Placer), a Company that was formed on January 25, 2012. This share exchange agreement was treated as a reverse recapitalization, under which the legal acquiree (Placer) was treated as the accounting acquirer and the equity accounts of the Company were adjusted to reflect a reorganization. Inasmuch as Placer was treated as the accounting acquirer, whenever historical financial information is presented, it is Placer information.


On May 3, 2013, the Company formed a subsidiary in Baja California to exploit a mining claim acquired by the subsidiary.  It remained inactive until June 1, 2013 at which time it became operational, on a limited basis.  A problem with the mining permit caused suspension of mining activities in May 2014.  The Company is working to resolve that problem.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


a. Cash

For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with an original maturity of three months or less to be cash equivalents.


b. Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts payable and accrued expenses, and notes payable, approximate their fair values at February 29, 2016.


c. Income (Loss) Per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders for the period by the weighted average number of shares of common stock outstanding during that period. During periods in which a net loss has occurred, outstanding options, warrants, and convertible notes are excluded from the calculation of weighted average number of shares outstanding as their inclusion would be anti-dilutive.



6



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


d. Income Taxes


The Company accounts for income taxes in accordance with current accounting guidance, which requires the use of the “liability method”. Accordingly, deferred tax liabilities and assets are determined based on differences between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Current income taxes are based on the income that is currently taxable.


e. Marketable Securities

Marketable securities, when owned, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on these securities are recognized as increases or decreases in accumulated other comprehensive income.


f. Fixed Assets

Fixed assets are recorded at cost. Depreciation is computed using the straight line method, with useful lives of seven years for mining equipment and five years for vehicles.


g. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.


h. Advertising Costs

The Company expenses advertising costs when the advertisement occurs. There was no advertising expense in the three and nine month periods ended February 29, 2016.


i. Segment Reporting

The Company is organized in one reporting and accountable segment.


j. Recognition of Revenue

Revenue is realized from product sales. Recognition occurs upon shipment to customers, and where the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the sales price is fixed or determinable; and collectability is reasonably assured. Additional revenue from royalties is recognized when persuasive evidence of an arrangement exits; the amount due is fixed or determinable; and collectability is reasonably assured.


k. Stock Based Compensation

The cost of equity instruments issued to non-employees in return for goods and services is measured by the fair value of the goods or services received or fair value of the equity instruments issued, whichever is the more readily determinable. The cost of employee services received in exchange for equity instruments is based on the grant date fair value of the equity instruments issued.




7



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


l. Investments in Mining Claims

Mining claims held for development are recorded at the cost of the claims, plus related acquisition costs. These costs will be amortized when extraction begins.


m. Exploration Stage Accounting

The Company is an exploration stage company, as defined in pronouncements of the Financial Accounting Standards Board (FASB) and Industry Guide #7 of the Securities and Exchange Commission.  Generally accepted accounting principles govern the recognition of revenue by an exploration stage enterprise and the accounting for costs and expenses. As an exploration stage company it is also required to make additional disclosures as defined under the  Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, “Development-Stage Entities”. Additional disclosures required are that our financial statements be identified as those of an exploration stage company, and that the statements of operations, changes in stockholders’ deficit and cash flows disclose activity since the date of its Inception (January 21, 1998). Effective June 10, 2014, the FASB changed its regulations with respect to development stage entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2015, with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in its financial statements.


n. Mine Development Costs

Mine development costs include engineering and metallurgical studies, and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines.


The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling; and (c) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. In addition, reserves cannot be considered proven and probable until they are supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are economically and legally extractable at the time of the reserve determination.




8



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Costs incurred at a mine site before proven reserves have been established are expensed as mine development costs. At the point proven reserves have been established at a mine site, such costs will be capitalized and will be written off as depletion expense as the minerals are extracted.


As of February 29, 2016, none of the mine concessions met the requirements for proven reserves; development costs are therefore expensed.


o. Impairment

The Company performs a review for potential impairment of long-lived assets whenever an event or change in circumstances indicates that the carrying value of an asset may not be recoverable.


p. Foreign Currency Translation


The assets of the Mexican subsidiary are in Mexico.  The Mexican subsidiary depends on the ability of the parent company to raise cash which is transferred to the subsidiary to meet its operating cash needs.  Therefore, the Company's management has determined that the functional currency of the Mexican subsidiary is the US dollar.  Since that is the case, the Company remeasures its subsidiary financial statements in US dollars.  Any gains or losses are reflected on the Statements of Operations.


The accounts of the Mexican subsidiary are remeasured in US dollars as follows:


(a) Monetary assets and liabilities are translated based on the rates of exchange in effect at balance sheet dates.


(b) Non-monetary assets, liabilities, and equity accounts are translated at the exchange rates prevailing at the times of acquisition of assets, assumption of liabilities or equity investments.


(c) Revenues and expenses are translated at the average exchange rates for each period, except for charges for amortization and depreciation of non-monetary assets which are translated at the rates associated with the assets.


q. New Accounting Pronouncements

The Company does not believe the adoption of recently issued pronouncements will have a significant effect on Company results of operations, financial position, or cash flows.


4. GOING CONCERN AND LIQUIDITY


As shown in the accompanying financial statements, the Company has experienced losses since its inception.  It also had a working capital deficiency at February 29, 2016 and presently does not have sufficient resources to meet its outstanding liabilities or accomplish its objectives during the next twelve months. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.



9



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



5.  DEBT OBLIGATIONS


On August 31, 2014, the Company defaulted on its obligation for $130,000 of convertible notes.  The obligation for all but $60,000 of these notes has been satisfied.


6.  WARRANT LIABILITY


During the year ended May 31, 2013, the Company issued 2,715,000 warrants to an investment banker; these warrants have "full-ratchet anti-dilution protection".  In accordance with pronouncements of the Financial Accounting Standards Board, these warrants have been classified as liabilities.  They will be periodically revalued by use of a Black Sholes valuation model.  Changes in the value will be recorded on the statement of operations.  During the nine month periods ended February 29, 2016 and February 28, 2015, the value was reduced by $0 and $108,600, respectively.


7. CAPITAL STOCK


The following is a summary of stock activity during the quarter:


 

 

 

 

 

Shares

 

Amount

 

 

 

 

Balance May 31, 2015

212,949,945

 

$2,129

Shares issued for services

-1,285,000

 

-12

Balance February 29, 2016

211,664,945

 

$2,117


8. SUPPLEMENTARY CASH FLOW INFORMATION


There was no cash paid for interest in the nine-month period ended February 29, 2016 and $25,743 paid in cash in the nine-month period ended February 28, 2015; there was no cash paid for income taxes during either of the nine month periods.


On June 16, 2014, the Company sold its El Tule Canyon mining claim and the remainder of the Gypsy claim for 1,500,000 shares of restricted common stock of the buyer; these shares were valued at $1,500,  which brings to 6,500,000 the number of shares of the buyer that are owned by the Company.


9. WARRANTS


There were 2,715,000 warrants outstanding at February 29, 2016, as presented below:.


 

 

 

 

 

Number of Warrants

 

Exercise Price

 

Weighted Life (in Years)

 

 

 

 

 

2,715,000(A)

 

$ .125    

 

2.63


(A)  These warrants were principally issued for services.  They were valued using a Black Scholes valuation model.



10



AMERICAN INTERNATIONAL VENTURES, INC.

(An Exploration Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 29, 2016

(Unaudited)



10. RELATED PARTY TRANSACTIONS


During the nine month period ended February 29, 2016, the Company issued shares (valued at $31,775) to its directors.  


The Company repaid $124,331 of shareholder loans during the current nine month period.  During the 2015 nine month period, the Company received $105,325 of shareholder loans.


11.  SUBSEQUENT EVENTS


On January 12, 2016 Jose G. Garcia was appointed Chief Executive Officer of the Company (see 8K filed January 15, 2016). On January 22, 2016 Kevin Gillen was appointed Chief Operating Officer (see 8K filed on January 25, 2016). Mr. Gillen is the son-in-law of Mr. Wagenti.




11





Forward Looking Statements and Cautionary Statements .


Certain of the statements contained in this Quarterly Report on Form 10-Q include "forward looking statements." All statements other than statements of historical facts included in this Form 10-Q regarding the Company's financial position, business strategy, and plans and objectives of management for future operations and capital expenditures, and other matters, are forward looking statements. These forward-looking statements are based upon management's expectations of future events. Although the Company believes the expectations reflected in such forward looking statements are reasonable, there can be no assurances that such expectations will prove to be correct. Additional statements concerning important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") are disclosed in the Cautionary Statements section and elsewhere in the Company’s Form 10-K for the period ended May 31, 2015. Readers are urged to refer to the section entitled “Cautionary Statements” and elsewhere in the Company’s Form 10-K for a broader discussion of these statements, risks, and uncertainties. These risks include the Company’s limited operations and lack of revenues. In addition, the Company’s auditor, in his audit report for the fiscal year ended May 31, 2015, has expressed a “going concern” opinion about the future viability of the Company. All written and oral forward looking statements attributable to the Company or persons acting on the Company’s behalf subsequent to the date of this Form 10-Q are expressly qualified in their entirety by the referenced Cautionary Statements.


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

During the nine month period ended February 28, 2015, the Company had revenue of $58,278, compared with no revenue during the nine month period of 2016.  These 2014 revenues were derived from mining activity of its subsidiary, AIVN de Mexico.  During the quarter ended August 31, 2014, AIVN de Mexico stopped all pilot plant mining operations and started the application process with the government of Mexico for mining permits.  Cost of goods sold consisting of mining, milling and personnel costs was $30,340 during the nine month period ended February 28, 2015.

Gross profit for the 2014 nine month period was $30,340, compared with nothing in the 2016 period.

Administrative expenses for the nine month period ended February 29, 2016 were $407,682 compared to $479,661 in the comparable period of 2015.  Administrative expenses consist primarily of consulting fees, director awards and other services compensated with equity items.  Administrative costs for the current period were affected by an unusual consulting fee connected with the acquisition of additional mining claims.

The Company had operating losses in both the nine month period ended February 29, 2016 and the comparable period of the previous year.  The current loss is significantly higher than in the previous year, the result of the consulting fee.

Interest expense in the current nine month period was a gain of $7,157, compared with an expense of $37,144 in the comparable period of 2015.  Interest expense accrues on outstanding debt obligations and on credit card charges, which were higher in the 2015 period.  The gain realized in the 2016 period was the result of forgiveness by two directors of interest that had previously accrued on loans they had made to the Company.

The Company has a warrant issuance that is considered a derivative security.  The Company realizes income from reductions in its liability for these warrants.  The liability reduction in the 2015 nine month period was $108,600.  There was no liability reduction in the 2016 nine month period.


Net profit for the 2016 nine month period was $318,885, compared with a net loss of $588,802 in the comparable period of 2015.  The favorable change is due to a $719,398 profit on the sale of the Bruner mining claim, which occurred during the second quarter of 2015.  This was partially offset by the consulting fee mentioned above.




12





The Company had no revenue during either the three month period ended February 29, 2015, or the three month period ended February 28, 2015, as its Mexican mining operations were suspended during the second quarter of 2014.   


There was no gross profit during either of the three month periods being reported.


Administrative expenses for the three months ended February 29, 2016 were $272,933 compared to $51,854 in the comparable period of 2015. Administrative expenses in the 2016 period were affected by the consulting fee referred to above.


The Company had an operating loss in both the current three month period and the three month period of the prior year.  


Interest expense in the current three month period was $780, compared with $3,437 in the comparable period of 2015. Interest expense accrues on outstanding debt obligations, which were lower in the 2016 period.  As explained above, the favorable result in the 2016 period was principally the result of forgiveness by two directors of interest that had previously accrued on loans they had made to the Company.


The Company has a warrant issuance that is considered a derivative security.  The Company realizes income from reductions in its liability for these warrants.  There was a liability reduction of $108,600 in the 2015 period and none in the 2016 period.


Net loss for the current three month period was $293,701, compared with a net loss of $103,400 in the comparable period of 2015.  The unfavorable change was primarily due to the unusual consulting fee mentioned above.


Since the acquisition of PGPI, our operations have focused on developing, planning and operating past producing precious metal properties and mines. Specifically, we are now a gold and silver exploration and extraction company, operating primarily in Baja California, Mexico, and Nevada.  We will focus on acquiring gold and base mineral resource properties that historically produced gold and silver until 1942 when all gold production in the United States was halted due to World War II. There is no guarantee that such properties will produce gold or silver in the future or that these properties may have already been depleted, as they were previously mined .


None of our properties or claims has any proven or probable reserves and all of our activities undertaken and currently proposed are exploratory in nature.


As of February 29, 2015, the Company had a working capital deficit of $1,805, compared with a working capital deficit of $505,233 as of May 31, 2015. The significant improvement is principally due to the sale of the Bruner claim, as noted above.


The Company has projected that its administrative overhead for the next 12 months will be approximately $185,000 which consists of accounting fees (including tax, audit and review) in the approximate amount of $45,000, legal fees in the approximate amount of $40,000, and miscellaneous expenses of $100,000. The projected legal and accounting fees relate to the Company’s reporting requirements under the Securities Exchange Act of 1934. The Company expects to incur additional legal and accounting fees in order to effect acquisitions and share exchanges or a business combination transaction. The Company has no other capital commitments. To continue its business plan, the Company will be required to raise additional funds through the private placement of its capital stock or through debt financing to meet its ongoing corporate overhead obligations. If the Company is unable to meet its corporate overhead obligations, it will have a material adverse impact on the Company and the Company may not be able to complete its plan of operations of finding a suitable business acquisition or combination candidate.




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Please refer to the Company’s Form 10-K for the period ending May 31, 2015 for a discussion of other risks attendant to its proposed plan of operations of effecting a business acquisition or combination, including the occurrence of significant dilution and a change of control. Even if successful in effecting a business acquisition or combination, it is likely that numerous risks will exist with respect to the new entity and its business.


Off-Balance Sheet Arrangements


We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues and results of operations, liquidity or capital expenditures


Significant Accounting Policies


a.    Cash


For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.


b.    Fair Value of Financial Instruments


The carrying amounts of the Company’s financial instruments, which include cash equivalents, and accrued liabilities, approximate their fair values at November 30, 2015.


c.    Loss (Income) Per Share


Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders for the period by the weighted average number of shares outstanding. During periods when a net loss has occurred, as was the case in the three and nine month periods ended February 28, 2015, outstanding options and warrants are excluded from the calculation of diluted loss per share as their inclusion would be anti-dilutive.


d.    Income Taxes


The Company accounts for income taxes in accordance with current accounting guidance, which requires the use of the “liability method”.  Accordingly, deferred tax liabilities and assets are determined based on differences between the financial statement and tax bases of assets and liabilities, and consideration of net operating loss carry forwards, using enacted tax rates in effect for the year in which the differences are expected to reverse.  Current income taxes are based on the income that is currently taxable.


e.    Marketable Securities


Marketable securities, when owned, are classified as available-for-sale and are carried at fair value.  Unrealized gains and losses on these securities are recognized as direct increases or decreases in accumulated other comprehensive income.


f.    Fixed Assets


Fixed assets are recorded at cost.  Depreciation is computed by using accelerated methods, with useful lives of seven years for furniture and equipment and five years for computers and automobiles.


g.    Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.



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h.    Advertising Costs


The Company expenses advertising costs when the advertisement occurs. There was no advertising expense in the three month period ended February 29, 2016.


i.    Segment Reporting


The Company is organized in one reporting and accountable segment.


Item 3. Quantitative and Qualitative Disclosures about Market Risk.


Not Applicable . Smaller Reporting Companies are not required to provide the information required by this item.


Item 4. Controls and Procedures.


Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer (one and the same person), we undertook an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934, Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that such disclosure controls and procedures were not effective to ensure (a) that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) that information required to be disclosed is accumulated and communicated to management to allow timely decisions regarding disclosure.


There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the quarter ended February 29, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.


None


Item 1A. Risk Factors.  


Smaller Reporting Companies are not required to provide the information required by this item.

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


There were 3,500,000 shares of Company common stock purchased for $25,000 during the three month period ended February 29, 2016.


Each officer and director is an accredited investor and agreed to hold such shares for investment purposes.  In addition, the issued shares contained restricted legends.  All of the securities issuances referred to above were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Act”) or the rules and regulations promulgated there under, including Regulation D and Rule 701.

Item 3. Defaults Upon Senior Securities.


None

Item 4. Mine Safety Disclosures.


None

Item 5. Other Information.


See note 10 to the financial statements.

Item 6. Exhibits


(a) Exhibits Furnished.


Exhibit #31.1 – Certification Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit #31.2 – Certification Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit #32    – Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.


The following exhibits contain information from our Quarterly Report on Form 10-Q for the quarter ended November 30, 2015 formatted in Extensible Business Reporting Language (XBRL):


Exhibit #101.INS – XBRL Instance Document

Exhibit #101.SCH – XBRL Taxonomy Schema Document

Exhibit #101.CAL – XBRL Taxonomy Calculation Linkbase Document

Exhibit #101.DEF – XBRL Taxonomy Extension Definition Linkbase

Exhibit #101.LAB – XBRL Taxonomy Label Linkbase Document

Exhibit #101.PRE – XBRL Taxonomy Presentation Linkbase Document



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SIGNATURES

  

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

  

AMERICAN INTERNATIONAL VENTURES, INC.

(Registrant)


By:    /s/ Jose Garcia

       ___________________________________

         Jose Garcia

         Chief Executive Officer

        (Principal Executive Officer)


By:  /s/ Jack Wagenti

       ___________________________________

       Jack Wagenti

       Chairman and Chief Financial Officer

       (Principal Financial Officer)


Date:   April 25, 2016






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