Attached files
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10-K
☒ ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended August 31,
2016
☐
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 333-182071
AIM EXPLORATION INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
|
67-0682135
|
(State
or Other Jurisdiction of Incorporation of
Organization)
|
|
(I.R.S.
Employer Identification No.)
|
179
S Green Valley Pkwy, Suite 300
Henderson,
Nevada 89012
(Address of
principal executive offices)
1-844-246-7378
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(g) of the Exchange Act: Common Stock,
$0.001 par value, Preferred Stock, $0.001 par
value
Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. Yes ☐
No ☒
Indicate by check
mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes
☐ No ☒
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 preceding 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 ☐
Indicate by check
mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained
herein, and will not 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. ☐
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 definition of “ large accelerated
filer and “
accelerated filer ” and “ smaller reporting
company ”
in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer ☐
Accelerated
filer ☐
Non-accelerated
filer ☐
Smaller reporting
company ☒
Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act) Yes ☐ No
☒
Aggregate market
value of the voting and non-voting stock of the registrant held by
non-affiliates of the registrant as of the last day of the
Company’s most recently-completed second fiscal quarter
(February 29, 2016): $220,753.
As of
December 15, 2016 the
registrant’s outstanding stock consisted of 576,728,348 common shares and
210,000 preferred
shares.
TABLE
OF CONTENTS
Item
1.
|
Business
|
3
|
Item
1A.
|
Risk
Factors
|
13
|
Item
1B.
|
Unresolved Staff
Comments
|
13
|
Item
2.
|
Properties
|
13
|
Item
3.
|
Legal
Proceedings
|
13
|
Item
4.
|
Mine
Safety Disclosures
|
13
|
Item
5.
|
Market
for Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
|
14
|
Item
6.
|
Selected Financial
Data
|
16
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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16
|
Item
7A.
|
Quantitative and
Qualitative Disclosures About Market Risk
|
19
|
Item
8.
|
Financial
Statements and Supplementary Data
|
19
|
Item
9.
|
Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure
|
42
|
Item
9A.
|
Controls and
Procedures
|
42
|
Item
9B.
|
Other
Information
|
42
|
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
43
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Item
11.
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Executive
Compensation
|
45
|
Item
12.
|
Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder
Matters
|
46
|
Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
|
47
|
Item
14.
|
Principal
Accountant Fees and Services
|
47
|
Item
15.
|
Exhibits,
Financial Statement Schedules
|
48
|
2
PART
1
Item 1. BUSINESS
We are
an exploration stage company engaged in the acquisition and
exploration of mineral properties with the intent to take
properties into production. We were incorporated as a Nevada
state corporation on February 18, 2010. We acquired mining
concession properties in Peru during the fiscal year ended August
31, 2014.
We are
considered an exploratory stage company, as we are involved in the
examination and investigation of land that we believe may contain
valuable minerals, for the purpose of discovering the presence of
ore, if any, and its extent. There is no assurance that a
commercially viable mineral deposit exists on the Peruvian
properties, and further exploration will be required before a final
evaluation as to the economic and legal feasibility for our future
exploration is determined. We have no known reportable
reserves of any type of mineral. To date, we have not
discovered an economically viable mineral deposit on the property,
and there is no assurance that we will discover one.
As of
August 31, 2016, we had cash reserves of $417 and a working
capital deficit of $2,897,303.
We do not have sufficient funds to enable us to complete the
initial phase of our exploration programs for the mining claims,
and will require additional financing in order to do so. There
is no assurance that we will be able to obtain additional
financing. Both advanced exploration and an economic
determination will be contingent upon the results of our
preliminary exploration programs and our ability to raise
additional financing in order to proceed with advanced exploration
and an economic evaluation. There is no assurance that we
will be able to obtain any additional financing to fund our
exploration activities.
Philippine Mining Claims
Nature
of Ownership
On
August 3, 2016, the Company terminated its management agreement
with Paladino Management and Development Corp. to manage operations
on the ground in the Philippines. The Philippine government enacted
new legislation which made it no longer financially feasible to
continue the Philippine feldspar operations.
Peruvian
Property
On June
23, 2014, Aim Exploration, Inc. entered into a Mining Concession
Asset Acquisition Agreement (the “Agreement”) with
Percana Mining Corp. (“Percana”). Pursuant to the
Agreement, the Company has acquired three separate mining
concessions. Two of the concession titles are unencumbered and
these make up 40% of the mining concessions. These two concessions
are known as El Tunel Del Tiempo 1 code 11060780 and El Tunel Del
Tiempo 2 code 11060781, and the registered ownership of these two
concessions have been transferred to the Company. The third
concession property is Agujeros Negros MA-AG makes up the remaining
60%, the documentation has all been completed to transfer ownership
to the company however formal registration has not yet been
completed however it is expected to be completed soon. Meanwhile
however, the Company has a Contract of Mining Assignment providing
AIM with full rights and authorities over the
concession.
In
consideration for the above concessions, the Company has issued
15,750, 000 common shares to Percana in two separate blocks; the
first In consideration for the above concessions, the Company has
issued 63,000 restricted common shares (15,750,000 restricted
common shares pre-consolidation) (Note 6) to Percana in two
separate blocks; the first block consists of 25,200 common shares
(6,300,000 common shares pre-consolidation) which are to be held in
escrow until either the Company raises $1,000,000 or when Percana
waives this requirement. The second block consists of 37,800 common
shares (9,450,000 common shares pre-consolidation) which are to be
held in escrow until such time as the Company is satisfied the
formal registration has been completed at which time the shares may
be released out of escrow at the option of Percana. On April 25,
2016, the Company entered into an amendment to its Agreement with
Percana and issued an additional 15,687,000 common shares to
Percana to bring its post-consolidation shareholdings back to
15,750,000 common shares. Furthermore, under the terms of the
amended Agreement, the Company agreed to issue additional common
shares to Percana at any time common shares are issued to any
director and/or controlling shareholder of the Company, the number
of common shares issued to Percana to be equal to those issued to
the director and/or controlling shareholder.
These
Mining Concessions were acquired based on the assumption the
properties are rich in high grade Anthracite Coal, currently there
are 20 small tunnels on the property already producing anthracite
coal which was being mined by illegal miners. Testing of the coal
samples was performed indicating the presence of high-grade
anthracite coal. Prior to acquisition AIM reviewed a non-compliant
technical report prepared by Engineers/Geologists together with
hiring a US based firm Gustavson Associates to visit the property
and review the reports. The firm provided AIM with a report, which
included recommendation for further exploration.
One of
the Company’s director is also a director of
Percana.
The
Peruvian Property consists of
three separate mining concessions, all are within one contiguous
block of property, and all three concessions are located in the
Province of Otuzco, La Libertad region. The formal transfer for two
of the mining concessions known as El Tunel del Tiempo 1 (Unique
code # 01-0209106 – 200 hectares) and El Tunel del Tiempo 2
(Unique code # 01-0209206 – 200 hectares) was executed
August1, 2014 and made into public deed on August 5, 2014 within
the Peruvian Public Registries.
3
The
third mining concession, known as Agujeros Negros MA-AG (unique
code # 01-0184000, 600 hectares) is under contract with AIM, as a
Contract of Mining Assignment and Option to Purchase was executed
on August 1, 2014 and was made into a Public Deed on August 5,
2014. By the Assignment and Option AIM has an irrevocable and
exclusive option to purchase 100% of the rights and interests of
this mining concession. This option was registered into public deed
on August 5, 2014. The option to purchase is for 5 years from the
date of registration which was completed Oct 2, 2014, in addition
contained within the contract AIM has complete control over this
mining concession for a period of 5 years following formal
registration which was registered October 2, 2014. The option to
purchase was exercised and all documentation to transfer the
concessions to the company has been completed however formal
registration with the Peruvian authorities has not yet been
completed.
The
reason this concession was not formally transferred is the fact
that AIM wanted to perform additional due diligence as there was an
Arbitration process with the registered owners and the former
concession owners of 80% of the concession. Subsequent to this time
the former owners who commenced the arbitration process has
abandoned the arbitration thus nullifying the process.
Royalties
The
combined concessions are known as “The Black Hole”, the
first two concessions, El Tunel del Tiempo 1 & 2 do not have
royalties payable. The third concession, Agujeros Negros WA-AG has
a royalty consisting of payment of US $1.00 per each metric ton of
anthracite coal extracted from and sold. The royalty applies from
the time when the sales of anthracite coal reach US
$150,000.
Process
Whereby Mineral Rights Are Acquired in Peru (Peruvian System of
Concessions)
In
Peru, any individual or company can solicit (through a
“Petition” to the Government, the grant of a mining
concession. Through an administrative process at INGEMMET (the
geological Mining and Metallurgical Institute), when all technical
and legal requirements are complied with, the Government will grant
the mining concession. The mining concession grants the titleholder
the right to explore, exploits, process, transport, market and
refine mineral whether it is metallic, non-metallic or coal
mineral. Once the concession is granted it must be registered at
the Public Registries and the concession titleholder can freely
transfer, assign, encumber or exercise over it any kind of
disposition act.
A
mining concession in Peru does not have duration of time limit.
However, it carries an obligation to pay annual Validity fees to
prevent cancellation from the Government as in Peru the nature of a
mining concession entails a duty for its development and production
in order to grant it added value. In the General Regime this is for
medium and large mining, the payment of validity fees is US$ 3.00
per hectare per year.
Rights
and Obligations: Concession titleholder’s rights
●
The properties are
all located on vacant land, and vacant land properties are entitled
to the free mining use of the surface land that corresponds to the
concession and outside of it, for its economic advantage without
the need for any additional request, however that being said the
titleholder does not have the right for the use of surface land
without formal consent, the properties are owned by the government
and for a total fee of approx. US$15,000.00 the surface rights are
readily available to AIM.
●
The right to
request from the mining authorities easements of third party lands
that are necessary for the reasonable use the
concession.
●
The right to free
trade of extracted minerals provided they have the respective
permits and authorizations.
●
To build on
neighboring concessions the labor work that is necessary for the
access, ventilation and drainage of their own concession, mineral
transport and safety of the workers.
●
The right to use
the water that is necessary for the domestic service of the staff
workers and for the operations of the concession, in accordance
with the legal provisions for these matters.
●
The right to
inspect the work of neighboring or adjacent mining concessions when
invasion is suspected or when there is danger of flooding, collapse
or dire due to the bad state of the labor work of the neighbors or
adjacent for the work they are carrying out.
Duties
of the Concession titleholders:
●
Validity fee
payment of US $3.00 per hectare, due June 30 every year. If not
paid for two years, concession returns to the Government. Fee to be
paid by AIM. (Paid)
●
Payment of penalty
fees if not in production is US $6.00 per year up to year seven
increasing to US $20.00 per year from year 12. After failure to pay
for two years the concession reverts to the Government. Fee to be
paid by AIM. (Paid)
●
Follow the
occupational health and safety provided for in Regulations of
Occupational Health and Safety.
●
Follow the
Environment Management Instruments.
We
confirm the Environmental Management permits are currently being
applied for and we expect to have these in place within the ensuing
six months.
4
Peruvian
Property Location
The
property is accessible by standard vehicles; all roadways are
drivable with the roadways being paved and or gravel roadways. The
driving time is approx. 3 hours from the city of Trujillo Peru. In
addition, there is roadway running through the property making it
feasible for exploration and drilling. The entire property consists
of 1,000 hectares. The official location of the property
is:
Republic:
Peru
Department: La
Libertad
Province:
Otuzco
District:
Huaranchal
Spot:
Between Huayobamba and Lajon
Figure
1 is a map that shows the location of the project and the
surrounding area. The coordinates near the centroid of the property
are 7° 44’ 13.06” S and 78° 31’
05.87” W. The property is 1,000 hectares and are all with one
contiguous block of property.
↑
North
Note:
This location map is copied from a previous geological report done
for the property by MTC and the map was completed in May of
2012.
5
Figure
1 Property Location
Geology
The
geology in the area of the property and surrounding areas in
general have a regional stratigraphy, composed in large percentage
of sequences of Mesozoic sedimentary rocks ranging from Jurassic in
the western sector, then the Lower Cretaceous superior and in the
northwest-northeast with Tertiary volcanic sequences, which cover
much of the region, and the upper most are alluvial deposits from
the recent Quaternary. There are also some Tertiary intrusive
bodies that outcrop in the southwest area of the
region.
The
local geology for the property consists of sedimentary units,
corresponding to the Chimú Chicama formations, Santa, Carhuaz
and Farrat, and the Alto Chicama River basin is characterized by
outcrops of Mesozoic rocks that have the have major folding and
fracturing. This folding is apparent in the Jurassic sedimentary
rocks (Chicama formation) at lower levels near the Alto Chicama
River. Chicama Formation is characterized by the presence of dark
gray shale with interbedded sandstones, and slate gray tuffaceous
quartz at some levels. The Chimú Formation is present in most
of the study area, and is the most noticeable towards the southwest
and Chicama formation is exposed near the river. These formations
are important because this is the horizon in the area of
greatest interest because of the presence of coal seams and
in some cases have the presence of sub-anthracite and anthracite,
occurring with some areas as "lenses" in the bituminous coal. The
following is the sedimentary sequence; sandstones, siltstones,
shale, and black shale (Cobbing et al., 1996: 73-74). The two
formations are exposed mostly in streams and Quina Shangala
(erosional cut within the property), covering most of the local
area. The Santa and Carhuaz formations, are not fully
differentiated in the study area, having found areas with shale,
siltstone, limestone, sandstone, quartzite and in some sectors they
have small "lenses" of bituminous coal, but are of smaller
magnitude. In summary these formations, especially the formation
Chimú, are of great interest, as possible sources for economic
development for the "Black Holes Property".
There
are granodioritic intrusive rocks that outcrop in the form of
stocks, with the presence of a large intrusive towards the left of
the village of Lajon (northwest corner of the property). This
area is heavily disturbed and altered, and has the presence of
metallic minerals, which is an association of the coal deposits of
the basin Chicama (usually Au.).
These
various Shangala features (used in sampling activities) are
essentially a creek that dissects perpendicular to the outcrops
surrounding the river Alto Chicama, both sectors have significant
levels of bituminous coal, quite broken, which could be of value in
the economic exploration to exploitation of the
property.
The
oldest rocks in the prospect of coal formations are the Upper
Jurassic Chicama and overlie rocks of the Chimú formation,
this being the one with the anthracite coal and sub-anthracites
plus it includes other sedimentary horizons with bituminous coal.
These formations and especially above the village of Chimú is
of great interest as a source of possible development of the mining
project because they are the carriers of coal in the area and this
is this geological unit which covers 80% of the area.
The
studies done by MTC and later by Gustavson are not done to NI43-101
or coal industry standards to report resources and reserves. The
property is currently without known reserves and current and
planned exploration programs are exploratory in
nature.
Current
and planned exploration:
The
previous work completed on or near the property has focused on
geologic mapping and sampling via trenches at the outcrop areas and
in old, existing tunnels. There are active small mining operations
on the northwest area of the property that has also added
information on the quality of the coal from the
property.
The
property’s evaluation and database will be greatly improved
by a program of additional geologic mapping, trenching and most of
all by completing 3-4 drill holes that provide core for sampling
and testing, but also will be an important guide to the structure
of the coal deposits. More drill holes are required to define
resources; the first suggested drilling program may define the need
for additional drill holes due to the structural complexity of the
coal beds.
Figure
2 shows many relevant features of the property. The map is very
busy so some explanation is required.
Note:
this figure is also from the MTC Report of 2012 and shows many
features of the property that are describe and explained in the
text of this report.
6
Figure
2 Property Map showing Site Specific Features
The
outline of the property is shown by a lavender line that defines a
rectangle shape that is extended to the south. There is no north
arrow, but there are grid lines that show north-south and
east-west. The Alto Chicama River is in the south (bottom) of the
figure and the features, some with red markings that cross the
property in a northeast to southwest direction, are the features
referred to as Shangalas. The small black marks towards the
northwest are the small mines mentioned above.
The
main feature from Figure 2 that will aid the exploration and
drilling effort is the existing road that crosses the center of the
property and is shown as a light blue, meandering line. The
importance of this existing road is that it will give easy access
to the center of the property where the proposed drill holes can be
located. The coal deposits proposed to define first are south of
the road and by setting up at various locations along the road and
drilling at an angle towards the south will provide the best
possibility to intersect and sample the coal seams. Four drill
holes along the road can be spaced to provide data points to define
some resources as Indicated. The exact drill sites will be defined
in a combination of future site visits and geologic mapping, which
is the first phase of exploration.
The
cost and timing for the Phase I of drill hole siting and mapping is
estimated at about $35,000 and will be started as soon as AIM has
the necessary funds, the process is expected to take approximately
10 days. The planning for Phase 2, drilling, sampling, analysis and
possible more trenching is estimated at $350,000 to include a
drilling contractor, geologic support, sample analysis and
reporting and could complete the 4 drilling program in 6 weeks.
This data provided by Phase 1 and Phase 2 could then be utilized to
develop a NI43-101 Resource Report and possible a Preliminary
Economic Assessment (PEA).
The
cost and timing for the required permitting for the property is as
follows:
COSTS BREAKDOWN
DESCRIPTION
|
COSTS $
|
TIME
|
1. ENVIRONMENTAL
IMPACT STUDY
|
50,000
|
6
months
|
Conceptual
hydrological and hydrogeological study
|
25,000
|
|
2. START OF MINING
OPERATIONS
|
|
4
months
|
Authorization of
the surface land (titleholder)
|
14,999
|
|
Mine
plan
|
15,000
|
|
Detailed
Ventilation Study
|
10,000
|
|
Detailed
Geomechanics Study
|
10,000
|
|
Seismic risk
studies
|
7,000
|
|
Design of
explosives storage
|
2,000
|
|
Occupational Health
and Safety Plan
|
2,000
|
|
Design of tailings
storage
|
15,000
|
|
3. CLOSURE
PLAN
|
35,000
|
4
months
|
4. PREPARATION OF
FILE OF WATER USE ISSUED BY ANA
|
7,000
|
1
month
|
5. PREPARATION OF
FILE FOR DISPOSAL OF WATER (DIGESA AND ANA)
|
5,000
|
1
month
|
6. LEGAL COSTS
ASSOCIATED TO OBTAIN ALL THE AFOREMENTIONED PERMITS
|
50,000
|
Throughout the
process
|
TOTAL
COSTS $
|
$247,999
|
|
Summary
Gustavson
Associates based out of Boulder Colorado provided the technical
information on the Peruvian property. Gustavson Associates is a
mining consulting firm with over 30 years of extensive
international experience. Mr. Karl D. Gurr of Gustavson Associates
completed a site visit of the property together with visiting the
Port of Salaverry located in Trujillo Peru and has reviewed
numerous reports. Mr. Karl Gurr is a Registered Member of the
Society of Mining Engineers and has degrees in Geology and Mining
Engineering with over 25 years of direct experience in the coal
industry, which defines Mr. Gurr’s status as a qualified
person. As stated Mr. Gurr performed a property visit and a
visit to the Port of Salaverry and confirms that the property is a
known coal bearing area with sufficient past geologic study to
merit additional work (exploration) to better define coal resource
and eventually a plan for mining the resource. Any further
exploration will be overseen and supervised by or through Mr. Gurr
and will be focused on providing additional information to advance
the project and to do it in a cost effective manner. Mr. Gurr
has confirmed the infrastructure and property access already exists
and the Port of Salaverry has the capability to store and ship the
produced coal.
In
addition to Mr. Gurr’s visit we solicited the efforts of
mining engineer and geologist Manuel Chumpitaz Cama. Mr. Cama has
known the property for many years and he attended to extractive of
coal samples from various mine tunnels within the property. Through
the supervision of Mr. Cama samples of coal were taken from the
property and delivered to the local university lab for testing.
Following is the official results of the testing.
The
legal and permitting information was provided to AIM by their team
of Peruvian legal advisors based in Lima Peru.
7
Analysis of Coal Samples
The
following report was obtained from world-renowned SGS Canada
Inc.:
8
9
10
WE WILL REQUIRE
SIGNIFICANT ADDITIONAL FINANCING IN ORDER TO CONTINUE OUR
EXPLORATION ACTIVITIES AND OUR ASSESSMENT OF THE COMMERCIAL
VIABILITY OF OUR PROPERTIES. EVEN IF WE DISCOVER COMMERCIAL
RESERVES OF PRECIOUS METALS ON OUR MINERAL PROPERTY, WE CAN PROVIDE
NO ASSURANCE THAT WE WILL BE ABLE TO SUCCESSFULLY ADVANCE INTO
COMMERCIAL PRODUCTION.
While
we are very optimistic the properties contain minerals we are not
sure. Our business plan calls for significant expenditures in
connection with the exploration of the property. We will,
however, require additional financing in order to complete the
remaining phases of the exploration program, and to conduct the
economic evaluation that would be necessary for us to assess
whether sufficient mineral reserves exist to justify commercial
exploitation. We currently are in the exploration stage and
have no revenue from operations. We currently do not have any
arrangements in place for additional financing, and we may not be
able to obtain financing on terms that are acceptable to us, or at
all. If we are unable to obtain additional financing, we will
not be able to continue our exploration activities and our
assessment of the commercial viability of the property.
Further, if we are able to establish that development of the
property is commercially viable, our inability to raise additional
financing at this stage would result in our inability to place the
property into production and recover our investment.
11
Competition
We are
a junior mineral resource exploration company. We compete
with other mineral resource exploration companies for financing and
for the acquisition of new mineral properties. Many of the
mineral resource exploration companies with whom we compete have
greater financial and technical resources than those available to
us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their
mineral properties. In addition, they may be able to afford
more geological expertise in the targeting and exploration of
mineral properties. This competition could result in
competitors having mineral properties of greater quality and
interest to prospective investors who may finance additional
exploration and development. This competition could adversely
impact on our ability to achieve the financing necessary for us to
conduct further exploration of our mineral properties.
We will
also compete with other junior mineral exploration companies for
financing from a limited number of investors that are prepared to
make investments in junior mineral exploration companies. The
presence of competing junior mineral exploration companies may
impact on our ability to raise additional capital in order to fund
our exploration programs if investors are of the view that
investments in competitors are more attractive based on the merit
of the mineral properties under investigation and the price of the
investment offered to investors.
We will
also compete with other junior and senior mineral companies for
available resources, including, but not limited to, professional
geologists, camp staff, helicopter or float planes, mineral
exploration supplies and drill rigs.
As
at August 31, 2016, we had cash reserves of $417 and
working capital deficit of $2,897,303. We do not have sufficient
funds to enable us to complete this initial phase of our
exploration programs for the mining claims. We will require
additional financing in order to commence the initial phases of
exploration of the properties. There is no assurance that
will be able to obtain additional financing. Both advanced
exploration and an economic determination will be contingent upon
the results of our preliminary exploration programs and our ability
to raise additional financing in order to proceed with advanced
exploration and an economic evaluation. There is no assurance
that we will be able to obtain any additional financing to fund our
exploration activities.
Patents,
Trademarks, Franchises, Royalty Agreements or Labor
Contracts
We have
no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor
contracts. We will assess the need for any copyright, trademark or
patent applications on an ongoing basis.
Research
and Development
We have
not spent any amounts on research and development activities during
the year ended August 31, 2016. We anticipate that we will
not incur any expenses on research and development over the next 12
months. Our planned expenditures on our operations or a
business combination are summarized under the section of this
annual report entitled “Management’s Discussion and
Analysis of Financial Position and Results of
Operations”.
Employees
and Employment Agreements
At
present, we have no employees other than our executive officers and
directors. We presently do not have pension, health, annuity,
insurance, stock options, profit sharing or similar benefit plans;
however, we may adopt such plans in the future. There are
presently no personal benefits available to any officers, directors
or employees.
12
Item 1A. RISK FACTORS
As a
“smaller reporting company”, we are not required to
provide the information required by this Item.
Item 1B. UNRESOLVED STAFF COMMENTS
As a
“smaller reporting company”, we are not required to
provide the information required by this Item.
Item 2. PROPERTIES
Descriptions of the
leases concerning our mining facilities can be found in Item 1 of
this report on Form 10-K. We do not currently own any property or
real estate of any kind. Our executive offices are located at
701 North Green Valley Parkway, Suite 200, Henderson Nevada,
89012.
Item 3. LEGAL PROCEEDINGS
A
company called Tarpon Bay commenced legal action with the company
as at August 30, 2016 claiming the company owed them $78,678. The
company is disputing the claim and it is currently in the hands of
the courts. This relates to the S-1 registration statement that
became effective June 1, 2015. The S-1 that was registered in the
name of Southridge Capital and the amount of the claim represents
the “standby fee”. In view of the fact that the equity
line of credit with Southridge Capital was completed wrong and
could not be utilized technically Southridge or Tarpon Bay was not
on “standby”. The S-1 registration statement was
approved by Southridge (Tarpon Bay) in- house legal department
prior to submitting to the SEC for registration." There are no
proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial stockholder, is an adverse party or
has a material interest adverse to our interest.
Item 4. MINE SAFETY DISCLOSURES
Not
applicable.
13
PART
II
Item 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
Market
Information
There
is no established public trading market for our securities and a
regular trading market may not develop, or if developed, may not be
sustained. A shareholder in all likelihood, therefore, will
not be able to resell his or her securities should he or she desire
to do so when eligible for public resales.
Furthermore, it is
unlikely that a lending institution will accept our securities as
pledged collateral for loans unless a regular trading market
develops. We would like to register our shares for resale by
our selling stockholders and then obtain a trading symbol to trade
our shares over the OTC Bulletin Board. However, there is no
assurance that we will be successful in getting our common stock
quoted on the OTC Bulletin Board.
Number
of Holders
As of
December 15, 2016, we had approximately 45 shareholders of
record of our common stock.
As of
December 15, 2016, we had 2 shareholders of record of our preferred
stock.
Dividend
Policy
We have
not declared any cash dividends on our common stock since our
inception and do not anticipate paying such dividends in the
foreseeable future. We plan to retain any future earnings for
use in our business. Any decisions as to future payments of
dividends will depend on our earnings and financial position and
such other facts, as the Board of Directors deems
relevant.
Recent
Sales of Unregistered Securities; Use of Proceeds from Registered
Securities
On
October 28, 2015, Aim Exploration Inc. (the “Company”)
entered into a Note Purchase Agreement with Tangiers
Investment Group, LLC (“Tangiers” or
“Holder” in the event of assignment or succession) for
the sale of a 10% convertible promissory note (the
“Note”), in the principal amount of $330,000 (the
“Principal Sum”), convertible into shares of common
stock of the Company. Upon execution of the Note, Tangiers
delivered $75,000 to the Company. The Note has an original issue
discount of $7,500, which Tangiers retained for due diligence and
legal bills related to the transaction. The financing closed on
October 28, 2015 (the “Closing Date”). The Effective
Date is that day when the Note is executed by both parties and the
delivery of the first payment of consideration is made (the
“Effective Date”).
On
April 1, 2016, Tangiers delivered another $18,302 to the Company.
During the year, Rockwell Capital (“Rockwell”) assumed
$92,000 of the Tangiers note. Subsequent to August 31, 2016, the
Rockwell note was assumed by a private party, and the balance of
the Tangiers note was paid in full by a director of the
Company.
The Note bears interest at
the rate of 10% per annum. All interest and principal must be
repaid one (1) year after the Effective Date (the “Maturity
Date”). The Note is convertible into common stock, at
Tangiers’ option, at the lower of (i) $0.10 per share or (ii)
50% of the lowest trading price of the Company’s common stock
during the 25 consecutive trading days prior to the date on which
Tangiers elects to convert all or part of the Note (the
“Conversion Price”).
14
The
Note may be prepaid by the Company, in whole or in party, according
to the following: if under 30 days from the Effective Date,
Prepayment amount shall be 100% of Principal sum plus accrued
interest; between 31 and 60 days, 110% of Principal Sum plus
accrued interest; between 61 and 90 days, 120% of Principal Sum
plus accrued interest; between 91 and 120 days, 130% of Principal
Sum plus accrued interest; between 121 and 150 days, 140% of the
Principal Sum plus accrued interest; and between 151 and 180 days,
150% of Principal Sum plus accrued interest. After 180 days from
the Effective Date, the Note may not be prepaid without written
consent from the Holder.
In the
event of a default, the Note may be accelerated by Tangiers,
whereby the outstanding balance is immediately due and payable in
cash at 150% of the outstanding Principal Sum of the Note. In
addition, an interest rate of the lesser of 18% per annum or the
maximum rate permitted under law will be applied to the outstanding
balance. Tangiers is prohibited from owning more than 9.99% of the
Company’s outstanding shares pursuant to the
Note.
The
Company claims an exemption from the registration requirements of
the Securities Act of 1933, as amended (the “Act”) for
the private placement of these securities pursuant to Section 4(2)
of the Act and/or Regulation D promulgated there under since, among
other things, the transaction did not involve a public
offering, Tangiers is an accredited investor, Tangiers had
access to information about the Company and their investment,
Tangiers took the securities for investment and not resale, and the
Company took appropriate measures to restrict the transfer of the
securities.
Related
to entering into the Note, the parties documented their intention
that the Company’s obligations to repay under the terms of
the Note be secured by certain assets, represented by the Security
Agreement and Memorandum of Security Agreement, entered into by the
parties on October 28, 2015.
On
October 28, 2015, the Company entered into a Strategic Consulting
Agreement with Tangiers for strategic advising and consulting
services. The Term is twelve months, although it may be terminated
at any time. As consideration for providing consulting services,
the Company shall pay Tangiers one hundred twenty thousand dollars
($120,000) in restricted shares of the Company’s common
stock, payable in four equal installments of $30,000 per month
each, due at ninety-day intervals. Additionally, the Company shall
issue to Tangiers 500,000 five-year warrants with an exercise price
of fifteen cents ($.15) a share and a cashless exercise option. The
Company also granted Tangiers the option to purchase up to fifteen
thousand (15,000) tons of coal per month (FOB) at a fifteen percent
(15%) discount to market on a to be determined
formula.
On that
same date, the Company entered into an Investment Agreement and
Registration Rights Agreement with Tangiers (the “Investment
Agreement”) through which the Company has agreed to issue and
sell to Tangiers an indeterminate number of shares of the
Company’s common stock, par value of $.001 per share, up to
an aggregate purchase price of five million dollars ($5,000,000).
The Company is obligated to register these shares to be sold under
the Investment Agreement on Form S-1.
On
August 14, 2015, the Company issued to Auctus Fund, LLC a
convertible promissory note in the principal amount of $76,750, in
connection with a securities purchase agreement entered into by the
parties on August 14, 2015. The note accrues interest at a rate of
10% per annum, with a maturity date of May 14, 2016. The holder of
the note may convert any or all of the principal outstanding into
shares of the Company’s common stock at a price equal to 55%
of the lowest trading price of the common stock during the fifteen
trading days prior to issuing a notice of conversion to the
Company. During the year, Rockwell Capital (“Rockwell”)
assumed $40,000 of the Auctus note. Subsequent to August 31, 2016,
the Rockwell note was assumed by a private party.
On
August 31, 2015, the Company issued to St. George Investments LLC a
convertible promissory note in the principal amount of $40,000, in
connection with a securities purchase agreement entered into by the
parties on August 31, 2015. The purchase price for this note and
warrant (as described in the securities purchase agreement) shall
be $25,000, computed as follows: original principal balance of
$40,000, less a $10,000 original issue discount and $5,000 to cover
lender’s legal fees, accounting costs, due diligence, and
other transaction costs incurred in connection with the note.
Interest does not accrue on the outstanding principal. The note
matures six months after the purchase price is delivered to the
Company by the lender. The holder of the note may convert any or
all of the principal outstanding into shares of the Company’s
common stock at a price equal to 60% of the lowest trading price of
the common stock during the twenty trading days prior to issuing a
notice of conversion to the Company. Subsequent to August 31, 2016,
a private party assumed the St. George note.
On
September 17, 2015, the Company issued to EMA Financial, LLC a
convertible promissory note in the principal amount of $40,000, in
connection with a securities purchase agreement entered into by the
parties on September 17, 2015. The note accrues interest at a rate
of 12% per annum, with a maturity date of September 17, 2016. The
holder of the note may convert any or all of the principal
outstanding into shares of the Company’s common stock at a
price equal to 55% of the lowest trading price of the common stock
during the 20 trading days prior to issuing a notice of conversion
to the Company.
On
January 12, 2016, the Company issued to Yoshar Trading, LLC a
convertible promissory note in the principal amount of $30,000, in
connection with a Securities Purchase Agreement entered into by the
parties on January 12, 2016. The note accrues interest at a rate of
10% per annum, with a maturity date of January 12, 2017. The holder
of the note may convert any or all of the principal outstanding
into shares of the Company’s common stock at a price equal to
55% of the lowest trading price of the common stock during the 20
trading days prior to issuing a notice of conversion to the
Company.
15
Equity
Compensation Plan Information
We do
not have in effect any compensation plans under which our equity
securities are authorized for issuance and we do not have any
outstanding stock options.
Purchase
of Equity Securities by the Issuer and Affiliated
Purchasers
We did
not purchase any of our shares of common stock or other securities
during our fourth quarter of our fiscal year ended August 31,
2016.
Item 6. SELECTED FINANCIAL DATA
As a
“smaller reporting company”, we are not required to
provide the information required by this Item.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You
should read the following discussion and analysis in conjunction
with our financial statements, including the notes thereto,
included in this Report. Some of the information contained in
this Report may contain forward-looking statements within the
meaning of Section 27A of the Securities Exchange Act of 1933, as
amended (the “Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
This information may involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from future
results, performance or achievements expressed or implied by any
forward-looking statements. Forward-looking statements which
involve assumptions and describe our future plans, strategies and
expectations, are generally identifiable by the use of the words
“may,” “will,” “should,”
“expect,” “anticipate,”
“estimate,” “believe,” “intend”
or “project” or the negative of these words or other
variations on these words or comparable terminology. These
forward-looking statements are based on assumptions that may be
incorrect, and there can be no assurance that the projections
included in these forward-looking statements will come to pass.
Our actual results could differ materially from those
expressed or implied by the forward looking statements as a result
of various factors. We undertake no obligation to update
publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the
future.
Purchase
of Significant Equipment
We do
not intend to purchase any significant equipment over the next
twelve months.
Personnel
Plan
We do
not expect any material changes in the number of employees over the
next 12-month period (although we may enter into employment or
consulting agreements with our officers or directors). We do
and will continue to outsource contract employment as
needed.
16
Results
of Operations for the Fiscal Year Ended August 31, 2016 compared
to the Fiscal Year Ended August 31, 2015
We did
not earn any revenues for the period from February 18, 2010
(Inception) to August 31, 2016. We incurred a net loss in the
amount of $1,141,304 during the
fiscal year ended August 31, 2016, compared to a net loss of
$1,448,618 for the fiscal year ended August 31, 2015. These
operating expenses were comprised of mineral property expenditures
of $22,916 (2015: recapture of
$21,843), consulting fees of $70,437 (2015: $128,451), filing fees
of $15,831 (2015: $15,923), finder’s fees of $15,000 (2015:
$113,603), foreign exchange gain of $61,517 (2015: loss of $664); management
fees of $216,000 (2015: $241,500), office and general fees of
$54,710 (2015: $70,142),
professional fees of $105,409 (2015: $306,925), and public
relations expense of $72,854 (2015: $180,452). We wrote-down
accounts receivable of $45,800 (2015: $Nil), wrote-down accounts
payable by $Nil (2015: $11,285), and incurred the following
expenses related to the convertible: accretion of $529,914 (2015:
$85,329), interest expense of $62,431 (2015: $49,112), finance
costs of $197,571 (2015: $305,998) from amortization of debt
discounts and excess of derivative liability over the face value of
the notes, and a change in the fair value of the derivative
liability of $206,052 (2015: $16,353).
Revenues
We have
had no operating revenues since our inception on February 18, 2010
to August 31, 2016.
Expenses
We
incurred a net loss in the amount of $1,141,304 during the fiscal year ended August
31, 2016, compared to a net loss of $1,448,618 for the fiscal year
ended August 31, 2015. These operating expenses were
comprised of mineral property expenditures of $22,916 (2015: recapture of $21,843),
consulting fees of $70,437 (2015: $128,451), filing fees of $15,831
(2015: $15,923), finder’s fees of $15,000 (2015: $113,603),
foreign exchange gain of $61,517 (2015: loss of $664); management fees
of $216,000 (2015: $241,500), office and general fees of $54,710
(2015: $70,142), professional fees of $105,409 (2015: $306,925),
and public relations expense of $72,854 (2015: $180,452). We
wrote-down accounts receivable of $45,800 (2015: $Nil), wrote-down
accounts payable by $Nil (2015: $11,285), and incurred the
following expenses related to the convertible: accretion of
$529,914 (2015: $85,329), interest expense of $62,431 (2015:
$49,112), finance costs of $197,571 (2015: $305,998) from
amortization of debt discounts and excess of derivative liability
over the face value of the notes, and a change in the fair value of
the derivative liability of $206,052 (2015: $16,353).
Liquidity
and Capital Resources
As at
August 31, 2016, we had cash reserves of $417 and working capital
deficit of $2,227,835. As at August 31, 2015, we had cash
reserves of $2,349 and working capital deficit of
$1,209,747.
Cash
Used in Operating Activities
Net
cash used in operating activities was $409,984 during the fiscal
year ended August 31, 2016, compared to $812,788 for the fiscal
year ended August 31, 2015.
Cash
from Financing Activities
We have
funded our business to date primarily from the issuance of
convertible notes, loans from related parties, as well as sales of
our common stock. During the fiscal year ended August 31,
2016, we raised a total of $408,052 in financing activities.
This was comprised of the issuance of convertible debt in the
amount of $215,000, loans received in the amount of $69,350, and
loans from our director and key management personnel of
$123,702. During the fiscal year ended August 31, 2015, we
raised a total of $813,275 in financing activities. This was
comprised of the issuance of convertible debt in the amount of
$385,553, offset by payment on convertible notes of $47,250,
issuance of convertible debt to related parties in the amount of
$170,000, and loans from our director and key management personnel
of $304,972
17
Off-Balance
Sheet Arrangements
We have
no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to stockholders.
We have
not attained profitable operations and are dependent upon obtaining
financing to pursue marketing and distribution activities.
For these reasons, there is substantial doubt that we will be
able to continue as a going concern.
Critical
Accounting Policies
The
discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally
accepted in the United States of America. Preparing financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by
management’s application of accounting policies. We
believe that understanding the basis and nature of the estimates
and assumptions involved with the following aspects of our
financial statements is critical to an understanding of our
financial statements.
Basis
of Accounting
Our
Company’s financial statements are prepared using the accrual
method of accounting. The Company has elected an August
year-end.
Cash
Equivalents
Our
Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash
equivalents.
Use
of Estimates and Assumptions
The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Stock-Based
Compensation
Our
Company records stock-based compensation in accordance with ASC
718, Compensation – Stock Based Compensation, using the fair
value method. All transactions in which goods or services are
the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued,
whichever is more reliably measurable. Equity instruments
issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value
of the equity instruments issued.
Recently
Issued Accounting Pronouncements
Our
Company has evaluated all the recent accounting pronouncements and
believes that none of them will have a material effect on the
company’s financial statement.
Contractual
Obligations
As a
“smaller reporting company” we are not required to
provide tabular disclosure obligations.
18
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
As a
“smaller reporting company” we are not required to
provide the information required by this Item.
Item
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
19
AIM
EXPLORATION INC.
CONSOLIDATED
FINANCIAL STATEMENTS
August
31, 2016
20
Report
of Independent Registered Public Accounting Firm
Consolidated
Balance Sheets of August 31, 2016 and 2015
Consolidated
Statements of Operations for the years ended August 31, 2016 &
2015
Consolidated
Statements of Stockholder’s Equity (Deficit)
Consolidated
Statements of Cash Flows for the years ended August 31, 2016 and
2015
Notes
to Consolidated Financial Statements
21
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders
and Board of Directors
AIM
Exploration Inc.
701
North Green Valley Parkway, Suite 200
Henderson, NV
89012
We have audited the accompanying consolidated balance sheets
of AIM Exploration Inc. (the
“Company”) as of August 31, 2016 and 2015, and the
related consolidated statements of operations, changes in
stockholders’ equity (deficit), and cash flows for the years
then ended. 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
audit.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States of
America). Those standards require that we plan and perform the
audits 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 on
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. An audit also
includes 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 financial statements referred to the above
present fairly, in all material respects, the financial position
of AIM Exploration Inc. as of August 31, 2016
and 2015, and the results of their operations and cash flows for
the year then ended, 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 described in Note 3 to the financial statements, the
Company has incurred an accumulated deficit from inception to
August 31, 2016. This raises substantial doubt about the
Company’s ability to continue as a going concern.
Management’s plans in regard to this matter are also
described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/Anton & Chia, LLP
Newport Beach, California
December 15,
2016
22
AIM
EXPLORATION INC.
CONSOLIDATED
BALANCE SHEETS
ASSETS
|
Aug 31,
2016
|
Aug 31,
2015
(Restated)
|
CURRENT
ASSETS
|
|
|
Cash
|
$417
|
$2,349
|
Loans
receivable
|
–
|
45,800
|
Deposits
|
72,873
|
39,303
|
Total
Current Assets
|
73,290
|
87,452
|
|
|
|
Mineral
property
|
342,656
|
326,969
|
|
|
|
TOTAL
ASSETS
|
$415,946
|
$414,421
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
Accounts payable
and accrued liabilities
|
$211,601
|
$214,513
|
Loans
payable
|
69,350
|
–
|
Loans payable
– related party
|
598,955
|
478,453
|
Convertible note
– related party
|
191,264
|
103,762
|
Convertible note,
net of unamortized discount
|
433,446
|
86,707
|
Derivative
liability
|
796,509
|
571,687
|
TOTAL
LIABILITIES
|
2,301,125
|
1,455,122
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
Capital
Stock
|
|
|
Authorized
|
|
|
250,000,000
shares of common stock, $0.001 par value Issued and outstanding
22,392,729 shares (356,400 shares outstanding as at August 31,
2015)
|
|
|
1,000,000 shares of
preferred stock, $0.001 par value Issued and
outstanding 100,000 shares (Nil as at August 31, 2015)
|
145,707
|
89,200
|
Additional paid in
capital
|
871,507
|
626,098
|
Shares
receivable
|
(5,090)
|
–
|
Accumulated
deficit
|
(2,897,303)
|
(1,755,999)
|
|
|
|
TOTAL
STOCKHOLDERS' DEFICIT
|
(1,885,179)
|
(1,040,701)
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$415,946
|
$414,421
|
The
accompanying notes are an integral part of these consolidated
financial statements
24
AIM EXPLORATION INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
12 months
ended
Aug 31,
2016
|
12 months
ended
Aug 31,
2015
(Restated)
|
|
|
|
REVENUE
|
|
|
Total
Revenue
|
$-
|
$-
|
|
|
|
Gross
Profit
|
-
|
-
|
|
|
|
MINERAL
PROPERTY OPERATIONS
|
|
|
Acquisition
expenses
|
–
|
(37,556)
|
Exploration
expenses
|
22,916
|
15,713
|
Total
Mineral Property Operations
|
22,916
|
(21,843)
|
|
|
|
EXPENSES
|
|
|
Accretion
|
529,914
|
85,329
|
Consulting
fees
|
70,437
|
128,451
|
Filling
fees
|
15,831
|
15,923
|
Finder’s
fees
|
15,000
|
113,603
|
Foreign exchange
(gain) loss
|
(61,658)
|
664
|
Management
fees
|
216,000
|
241,500
|
Office &
general
|
54,710
|
70,142
|
Professional
fees
|
105,409
|
306,925
|
Public
relations
|
72,854
|
180,452
|
|
|
|
Total
Expenses
|
1,018,638
|
1,142,989
|
|
|
|
Net
Loss
|
(1,041,554)
|
(1,121,146)
|
|
|
|
Interest
expense
|
(62,431)
|
(49,112)
|
Finance
costs
|
(197,571)
|
(305,998)
|
Change
in fair value of derivative liability
|
206,052
|
16,353
|
Write-down
of accounts receivable
|
(45,800)
|
–
|
Write-down
of accounts payable
|
–
|
11,285
|
|
|
|
Total
Other Expense
|
(99,750)
|
(327,472)
|
|
|
|
Net
Loss
|
$(1,141,304)
|
$(1,448,618)
|
|
|
|
BASIC
AND DILUTED LOSS PER COMMON SHARE
|
$(0.05)
|
$(0.01)
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
6,391,865
|
353,784
|
BASIC
AND DILUTED LOSS PER PREFERRED SHARE
|
$(0.00)
|
$(0.00)
|
WEIGHTED
AVERAGE NUMBER OF PREFERRED SHARES OUTSTANDING
|
100,000
|
99,452
|
The
accompanying notes are an integral part of these consolidated
financial statements
25
AIM EXPLORATION INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
|
Common Stock
|
Preferred Stock
|
|
|
|
|
||
|
Number of
|
Amount
|
Number of
|
Amount
|
Additional Paid-in Capital
|
Share Subscriptions Receivable
|
Accumulated Deficit
|
Total
|
|
shares
|
$
|
shares
|
$
|
$
|
$
|
$
|
$
|
Balance
at inception – February 18, 2010
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Founders
shares, issued for cash
|
40,000
|
10,000
|
-
|
-
|
-
|
(10,000)
|
-
|
-
|
Net
Loss to August 31, 2010
|
-
|
-
|
-
|
-
|
-
|
-
|
(29,400)
|
(29,400)
|
Balance, August 31, 2010
|
40,000
|
10,000
|
-
|
-
|
-
|
(10,000)
|
(29,400)
|
(29,400)
|
Subscription
Received
|
-
|
-
|
-
|
-
|
-
|
10,000
|
-
|
10,000
|
Common
stock issued for cash
|
160,000
|
40,000
|
-
|
-
|
-
|
-
|
-
|
40,000
|
Net
loss for the year ended August 31, 2011
|
-
|
-
|
-
|
-
|
-
|
-
|
(18,939)
|
(18,939)
|
Balance, August 31, 2011
|
200,000
|
50,000
|
-
|
-
|
-
|
-
|
(48,339)
|
1,661
|
Net
loss to August 31, 2012
|
–
|
–
|
–
|
–
|
-
|
-
|
(28,109)
|
(28,109)
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2012
|
200,000
|
50,000
|
-
|
-
|
-
|
-
|
(76,448)
|
(26,448)
|
Sale
of common stock 18,000,000 common shares at $0.001 par
value
|
72,000
|
18,000
|
-
|
-
|
-
|
-
|
-
|
18,000
|
Imputed
Interest
|
-
|
-
|
-
|
-
|
2,035
|
-
|
-
|
2,035
|
Net
loss for the year ended August 31, 2013
|
-
|
-
|
-
|
-
|
-
|
-
|
(47,901)
|
(47,901)
|
Balance, August 31, 2013
|
272,000
|
68,000
|
-
|
-
|
2,035
|
-
|
(124,349)
|
(54,314)
|
15,750,000
common shares at $0.001 par value
|
63,000
|
15,750
|
-
|
-
|
311,219
|
-
|
-
|
326,969
|
Net
loss for the year ended August 31, 2014
|
-
|
-
|
-
|
-
|
-
|
-
|
(183,032)
|
(183,032)
|
Balance, August 31, 2014
|
335,000
|
83,750
|
-
|
-
|
313,254
|
-
|
(307,381)
|
89,623
|
Shares
issued for services
|
1,400
|
350
|
1,000,000
|
100
|
192,550
|
-
|
-
|
193,000
|
Shares
issued in deposit
|
20,000
|
5,000
|
-
|
-
|
-
|
-
|
-
|
5,000
|
Convertible
debt discount
|
-
|
-
|
-
|
-
|
99,630
|
-
|
-
|
99,630
|
Gain
on repurchase of convertible note
|
-
|
-
|
-
|
-
|
20,664
|
-
|
-
|
20,664
|
Net
loss for the year ended August 31, 2015
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,448,618)
|
(1,448,618)
|
Balance, August 31, 2015 (Restated)
|
356,400
|
89,100
|
1,000,000
|
100
|
626,098
|
-
|
(1,755,999)
|
(1,040,701)
|
The
accompanying notes are an integral part of these consolidated
financial statements
26
AIM EXPLORATION INC.
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(Continued)
|
Common
Stock
|
Preferred
Stock
|
|
|
|
|
||
|
Number
of
|
Amount
|
Number
of
|
Amount
|
Additional
Paid-in Capital
|
Share
Subscriptions Receivable (Refundable)
|
Accumulated
Deficit
|
Total
|
|
shares
|
$
|
shares
|
$
|
$
|
$
|
$
|
$
|
Shares
issued for services
|
1,286,494
|
715
|
-
|
-
|
125,875
|
-
|
-
|
126,590
|
Shares
issued for debt
|
3,200,000
|
3,200
|
-
|
-
|
-
|
-
|
-
|
3,200
|
Shares
issued on conversion of notes
|
1,862,835
|
36,905
|
-
|
-
|
119,534
|
-
|
-
|
156,439
|
Shares
issued for mineral property
|
15,687,000
|
15,687
|
-
|
-
|
-
|
-
|
-
|
15,687
|
Shares
to be returned to treasury
|
-
|
-
|
-
|
-
|
-
|
(5,090)
|
-
|
(5,090)
|
Net
loss for the year ended August 31, 2016
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,141,304)
|
(1,141,304)
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2016
|
22,392,729
|
145,607
|
1,000,000
|
100
|
871,507
|
(5,090)
|
(2,897,303)
|
(1,885,179)
|
The
accompanying notes are an integral part of these consolidated
financial statements
27
AIM EXPLORATION INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
12 months
ended
August 31,
2016
|
12 months
ended
August 31,
2015
(Restated)
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
Net
Loss
|
$(1,141,304)
|
$(1,448,618)
|
Adjustments to
reconcile Net Income (Loss) to netCash used in operating
activities:
|
|
|
Accretion
related to convertible note
|
529,914
|
85,329
|
Debt
discount related to convertible note
|
–
|
(35,478)
|
Finance
costs and derivative expense
|
260,002
|
305,998
|
Accrued
interest on convertible note
|
–
|
13,987
|
Loss
on derivative liability
|
(206,052)
|
(16,353)
|
Loss
on repurchase of convertible note
|
–
|
20,664
|
Shares
issued for services
|
126,500
|
193,000
|
Write-down
of accounts receivable
|
45,800
|
–
|
Write-down
of accounts payable
|
–
|
(11,285)
|
Changes in non-cash
working capital:
|
|
|
Loans
Receivable
|
–
|
(45,800)
|
Deposits
|
(38,570)
|
(8,798)
|
Provisions
|
–
|
(55,000)
|
Accounts
Payable
|
13,726
|
189,566
|
|
|
|
NET
CASH USED IN OPERATING ACTIVITIES
|
(409,984)
|
(812,788)
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
Mineral property
expenditures
|
(17,400)
|
–
|
NET
CASH USED IN INVESTING ACTIVITIES
|
(17,400)
|
–
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
Convertible debt
– related party
|
–
|
170,000
|
Convertible
debt
|
215,000
|
385,553
|
Payments on
convertible notes
|
–
|
(47,250)
|
Loans
received
|
69,350
|
–
|
Loans from related
party
|
123,702
|
304,972
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
408,052
|
813,275
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
(1,932)
|
487
|
|
|
|
CASH,
BEGINNING OF YEAR
|
2,349
|
1,862
|
|
|
|
CASH,
END OF YEAR
|
$417
|
$2,349
|
The
accompanying notes are an integral part of these consolidated
financial statements
28
AIM EXPLORATION
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF
PRESENTATION
Aim
Exploration, Inc. (“Company”) is an exploration stage
company as defined by FASB ASC 915. The Company was organized to
engage in mineral exploration and has incurred losses totaling
$2,897,303 since inception. The Company was incorporated on
February 18, 2010 in the State of Nevada and established a fiscal
year end at August 31.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis
of Presentation
The
condensed consolidated financial statements present the condensed
consolidated balance sheets, condensed consolidated statements of
operations and condensed consolidated cash flows of the Company.
These financial statements are presented in United States dollars
and have been prepared in accordance with accounting principles
generally accepted in the United States.
Principles
of Consolidation
The
condensed consolidated statements incorporate the financial
statements of the Company and its wholly-owned subsidiary, Aim
Exploration SA, of Peru. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Cash
and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers
highly liquid financial instruments purchased with a maturity of
three months or less to be cash equivalents. There were no cash
equivalents at August 31, 2016 or 2015.
Advertising
Advertising costs
are expensed as incurred. As of August 31, 2016, no advertising
costs have been incurred.
Property
The
Company does not own or rent any property. The Company’s
office space is being provided by the president at no charge to the
Company.
Use
of Estimates and Assumptions
Preparation of the
financial statements in conformity with accounting principles
generally accepted in the United States requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
Income
Taxes
The
Company follows the liability method of accounting for income
taxes. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax balances. Deferred tax assets
and liabilities are measured using enacted or substantially enacted
tax rates expected to apply to the taxable income in the years in
which those differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the date
of enactment or substantive enactment.
29
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Fair Value of Financial Instruments
The
Company has adopted Accounting Standards Codification subtopic
820-10, Fair Value Measurements and Disclosures ("ASC 820-10"). ASC
820-10 defines fair value, establishes a framework for measuring
fair value and enhances fair value measurement disclosure The
adoption of ASC 820-10 requires that the Company disclose assets
and liabilities that are recognized and measured at fair value on a
non-recurring basis, presented in a three-tier fair value
hierarchy, as follows:
- Level
1. Observable inputs such as quoted prices in active
markets;
- Level
2. Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
- Level
3. Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.
The
following presents the gross value of assets that were measured and
recognized at fair value:
- Level
1: none
- Level
2: none
- Level
3: none
The
Company adopted ASC 825-10, Financial Instruments, which permits
entities to choose to measure many financial instruments and
certain other items at fair value. The adoption of this standard
did not have an impact on the Company's financial position, results
of operations or cash flows. The carrying value of cash and cash
equivalents, accounts payable and accrued expenses, as reflected in
the balance sheets, approximate fair value because of the
short-term maturity of these instruments.
Derivative Liability
The
conversion features embedded in the outstanding convertible notes
payable are separately accounted for as a derivative liability in
accordance with ASC 815-15, Embedded Derivative. This is because
the number of shares that may be acquired upon conversion is
indeterminable as the conversion rates are expressed as a
percentage discount to the current fair market value of common
stock at the time of conversion. Derivative liabilities are valued
when the host instruments (convertible notes) are initially issued
and are also revalued at each reporting date, with the change in
the respective fair values being recorded as a gain or loss to the
derivative liability.
Net
Loss per Share
Basic
loss per share includes no dilution and is computed by dividing
loss available to common stockholders by the weighted average
number of common shares outstanding for the period. Dilutive loss
per share reflects the potential dilution of securities that could
share in the losses of the Company. Because the Company does not
have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
Impairment of Long-Lived Assets
In
accordance with ASC 360, Property Plant and Equipment, the Company
tests long-lived assets or asset groups for recoverability when
events or changes in circumstances indicate that their carrying
amount may not be recoverable. Circumstances which could trigger a
review include, but are not limited to: significant decreases in
the market price of the asset; significant adverse changes in the
business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the
acquisition or construction of the asset; current period cash flow
or operating losses combined with a history of losses or a forecast
of continuing losses associated with the use of the asset; and
current expectation that the asset will more likely than not be
sold or disposed significantly before the end of its estimated
useful life. Recoverability is assessed based on the carrying
amount of the asset and its fair
30
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Impairment of Long-Lived Assets (Continued)
value
which is generally determined based on the sum of the undiscounted
cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain
instances. An impairment loss is recognized when the carrying
amount is not recoverable and exceeds fair value.
Mineral Property Costs
Mineral
property exploration costs are expensed as incurred until such time
as economic reserves are quantified. To date, the Company has not
established any proven or probable reserves on its mineral
properties. The Company has capitalized $342,656 of mineral
property acquisition costs reflecting its investment in its
properties.
Stock-based
Compensation
The
Company adopted FASB guidance on stock based compensation upon
inception at February 18, 2010. ASC 718-10-30-2 requires all
share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based
on their fair values. The Company has not had any stock and stock
options issued for services and compensation for the period from
inception (February 18, 2010) through August 31, 2016.
Recent
Accounting Pronouncements
In April 2014, the FASB issued ASU
2014-08, Presentation of Financial
Statements (Topic 205) and Property, Plant, and Equipment (Topic
360): Reporting Discontinued Operations and Disclosures of
Disposals of Components of an Entity. The amendments in the ASU change the criteria
for reporting discontinued operations while enhancing disclosures
in this area. It also addresses sources of confusion and
inconsistent application related to financial reporting of
discontinued operations guidance in U.S. GAAP. Under the new
guidance, only disposals representing a strategic shift in
operations should be presented as discontinued operations. In
addition, the new guidance requires expanded disclosures about
discontinued operations that will provide financial statement users
with more information about the assets, liabilities, income, and
expenses of discontinued operations. The amendments in the ASU are
effective in the first quarter of 2015 for public organizations
with calendar year ends. Early adoption is permitted. The Company
does not expect the adoption to have a significant impact on its
consolidated financial statements.
In May 2014, the FASB issued ASU No.
2014-09, Revenue from Contracts with
Customers. This new
standard will replace most existing revenue recognition guidance in
U.S. GAAP. The core principle of the ASU is that an entity should
recognize revenue for the transfer of goods or services equal to
the amount it expects to receive for those goods and services. The
ASU requires additional disclosure about the nature, amount, timing
and uncertainty of revenue and cash flows arising from customer
contracts, including significant judgments and estimates, and
changes in those estimates. The ASU will be effective for the
Company beginning January 1,
2017, and allows for both
retrospective and modified- retrospective methods of adoption. The
Company is in the process of determining the method of adoption it
will elect and is currently assessing the impact of this ASU on its
consolidated financial statements and footnote
disclosures.
In August 2014, the FASB issued ASU
2014-15, Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going
Concern. The amendment in the
ASU provides guidance on determining when and how to disclose
going-concern uncertainties in the financial statements. The new
standard requires management to perform interim and annual
assessments of an entity’s ability to continue as a going
concern within one year of the date the financial statements are
issued. An entity must provide certain disclosures if conditions or
events raise substantial doubt about the entity’s ability to
continue as a going concern. The amendments in this Update are
effective for annual periods and interim periods within
those
31
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Recent
Accounting Pronouncements (Continued)
annual periods beginning after December 15, 2016. Earlier adoption is permitted. The Company does
not expect the adoption to have a significant impact on its
consolidated financial statements.
In August, 2015, the FASB issued ASU No.
2015-14, Revenue from Contracts with
Customers (Topic 606): Deferral of the Effective
Date. The amendment in
this ASU defers the effective date of ASU No. 2014-09 for all
entities for one year. Public business entities, certain
not-for-profit entities, and certain employee benefit plans should
apply the guidance in ASU 2014-09 to annual reporting periods
beginning December 15,
2017, including interim
reporting periods within that reporting period. Earlier application
is permitted only as of annual reporting periods beginning
after December 31,
2016, including interim
reporting periods with that reporting period.
In September, 2015, the FASB issued ASU No.
2015-16, Business Combinations (Topic
805). Topic 805 requires that
an acquirer retrospectively adjust provisional amounts recognized
in a business combination, during the measurement period. To
simplify the accounting for adjustments made to provisional
amounts, the amendments in the Update require that the acquirer
recognize adjustments to provisional amounts that are identified
during the measurement period in the reporting period in which the
adjustment amount is determined. The acquirer is required to also
record, in the same period’s financial statements, the effect
on earnings of changes in depreciation, amortization, or other
income effects, if any, as a result of the change to the
provisional amounts, calculated as if the accounting had been
completed at the acquisition date. In addition an entity is
required to present separately on the face of the income statement
or disclose in the notes to the financial statements the portion of
the amount recorded in current-period earnings by line item that
would have been recorded in previous reporting periods if the
adjustment to the provisional amounts had been recognized as of the
acquisition date. The
adoption of ASU 2015-016 is not expected to have a material effect
on the Company’s financial statements.
Other
recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the American Institute of Certified
Public Accountants, and the United States Securities and Exchange
Commission did not or are not believed by management to have a
material impact on the Company’s present or future
consolidated financial statements.
32
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 3 – GOING CONCERN
The
Company’s financial statements are prepared in accordance
with generally accepted accounting principles applicable to a going
concern. This contemplates the realization of assets and the
liquidation of liabilities in the normal course of business.
Currently, the Company has a working capital deficit of $2,227,835,
an accumulated deficit of $2,897,303 and net loss from operations
since inception of $2,897,303. The Company does not have a source
of revenue sufficient to cover its operation costs giving
substantial doubt for it to continue as a going concern. The
Company will be dependent upon the raising of additional capital
through placement of our common stock in order to implement its
business plan, or merging with an operating company. There can be
no assurance that the Company will be successful in either
situation in order to continue as a going concern. The Company is
funding its initial operations by way of issuing common
shares.
The
officers and directors have committed to advancing certain
operating costs of the Company, including Legal, Audit, Transfer
Agency and Edgarizing costs.
NOTE 4 – MINERAL PROPERTY
Peruvian
Mining Claims:
On June
23, 2014, Aim Exploration, Inc. entered into a Mining Concession
Asset Acquisition Agreement (the “Agreement”) with
Percana Mining Corp. (“Percana”). Pursuant to the
Agreement, the Company acquired three separate mining concessions.
Two of the concession titles are unencumbered and comprise 40% of
the mining concessions. These two concessions are known as El Tunel
Del Tiempo 1 code 11060780 and El Tunel Del Tiempo 2 code 11060781,
and the registered ownership of these two concessions have been
transferred to the Company. The third concession property known as
Agujeros Negros MA-AG comprising the remaining 60% has not yet been
transferred to the Company, however the Company has entered into a
Contract of Mining Assignment and Option to Purchase the concession
for a five year term. This contract provides AIM with full rights
and authorities over the concession.
In
consideration for the above concessions, the Company has issued
63,000 restricted common shares (15,750,000 restricted common
shares pre-consolidation) (Note 6) to Percana in two separate
blocks; the first block consists of 25,200 common shares (6,300,000
common shares pre-consolidation) which are to be held in escrow
until either the Company raises $1,000,000 or when Percana waives
this requirement. The second block consists of 37,800 common shares
(9,450,000 common shares pre-consolidation) which are to be held in
escrow until such time as the Company is satisfied at its
discretion that any arbitration issues have been resolved with the
third concession, at which time the shares may be released out of
escrow at the option of Percana. The fair value of these shares is
$326,969 which was based on fair market value. On April 25, 2016,
the Company entered into an amendment to its Agreement with Percana
and issued an additional 15,687,000 common shares to Percana to
bring its post-consolidation shareholdings back to 15,750,000
common shares. The fair value of these additional shares is
$15,687. Furthermore, under the terms of the amended Agreement, the
Company agreed to issue additional common shares to Percana at any
time common shares are issued to any director and/or controlling
shareholder of the Company, the number of common shares issued to
Percana to be equal to those issued to the director and/or
controlling shareholder.
These
Mining Concessions were acquired based on the assumption the
properties are rich in high grade Anthracite Coal, currently there
are 20 small tunnels on the property already producing anthracite
coal which was being mined by illegal miners. Testing of the coal
samples was performed indicating the presence of high-grade
anthracite coal. Prior to acquisition AIM reviewed a non-compliant
technical report prepared by Engineers/Geologists together with
hiring a US based firm Gustavson Associates to visit the property
and review the reports. The firm provided AIM with a report, which
included recommendation for further exploration.
One of
the Company’s director is also a director of
Percana.
33
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 5 – CONVERTIBLE NOTE
During
the year ended August 31, 2016, the Company issued convertible
notes with a principal balance of $233,302, with maturity dates
ranging from February 29, 2016 to January 12, 2017, and an interest
rate per annum ranging from 10% to 22%. The principal is
convertible into common shares of the Company at a conversion rate
equal to 50% - 60% of the lowest trading price of the
Company’s common stock for the fifteen prior trading days, as
defined in the agreements.
During
the year ended August 31, 2016, 1,862,835 common shares were issued
in relation to conversion options exercised during the year valued
at $156,439; $129,475 related to principal of the convertible
notes, $15,864 to accrued interest, and $11,100 to
fees.
During
the year ended August 31, 2015, the Company issued convertible
notes with a principal balance of $306,875, with maturity dates
ranging from November 6, 2015 to July 22, 2016, and an interest
rate per annum ranging from 8% to 12%. The principal is convertible
into common shares of the Company at a conversion rate equal to 55%
- 60% of the lowest trading price of the Company’s common
stock for the fifteen prior trading days, as defined in the
agreements.
The
Company is accounting for the conversion feature as a separate
derivative liability under ASC 815. As such, the Company will carry
the conversion feature liability at fair value on the balance
sheet. The Company determined the fair value of the conversion
feature as at the dates of issue and also as of the year ended
August 31, 2016. To determine the put and call values, the Company
used the Black-Scholes option valuation model using the following
inputs:
|
August 31,
2016
|
|
August 31,
2015
|
Fair
value of common stock
|
$0.03
- $0.40
|
|
$0.21
- $0.42
|
Exercise
price
|
$0.015
- $0.22
|
|
$0.1350 -
$0.2585
|
Contractual
term
|
3
months – 1 year
|
|
9
months – 1 year
|
Volatility
|
141.9%
- 675.9%
|
|
119.50% -
143.10%
|
Risk-free interest
rate
|
0.33%
- 0.69%
|
|
0.12%
- 0.41%
|
On May
11, 2015, the Company exercised its option to redeem convertible
notes with a principal balance of $47,250 within 180 days of their
issuance, by opting to prepay the note at 150% of the principal
amount plus accrued interest in the amount of $1,853. The Company
recorded a loss on the repurchase of the convertible note in the
amount of $20,664, which was credit to the additional paid in
capital account.
.
During
the year ended August 31, 2016, the Company recognized change in
fair value of the derivative liability of $206,052 related to the
change in fair value of the conversion feature. The change in fair
value of the conversion feature is being recorded through operating
results.
When
recording the conversion feature liability at during the year, the
Company recognized a 100% debt discount on the convertible notes
payable of $233,302 and finance costs expense of $197,571 from
amortization of debt discounts and excess of derivative liability
over the face value of the note. The debt discount is being
accreted to finance costs using the straight-line method over the
one-year contractual term of the debt. During the year ended August
31, 2016, the Company also recognized in the normal course
accretion of $529,914.
34
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 6 – CAPITAL STOCK
On
April 25, 2016, the Company consolidated its share capital on a
250:1 basis. All common shares and per share amounts have been
restated to reflect this share consolidation.
The
Company has authorized 250,000,000 shares of common stock with a
par value of $0.001 per share and 1,000,000 shares of preferred
stock with a par value of $0.001 per share.
At
August 31, 2016, 22,392,729 shares of common stock were issued and
outstanding, and 100,000 shares of preferred stock were issued and
outstanding.
Year ended August 31, 2016
On
April 25, 2016, the Company issued an additional 15,687,000 to
Percana to bring their post-consolidation shareholdings back up to
15,750,000 common shares. The value of these shares is $342,656
which is based on fair market value. These shares were issued in
connection with the acquisition of certain mining property. (Note
4)
During
the year ended August 31, 2016, the Company issued 1,862,835 common
shares pursuant to the exercise of the option attached to
outstanding convertible notes. (Note 5)
During
the year ended August 31, 2016, the Company issued 1,286,494 common
shares in connection with services rendered. Such services had a
fair value of $126,590.
During
the year ended August 31, 2016, the Company issued 3,200,000 common
shares in connection with paying down $3,200 of debt to two related
parties.
Year ended August 31, 2015
During
the year ended August 31, 2015, the Company issued 20,000 shares to
1 shareholder in connection with an asset acquisition agreement at
fair value of $5,000. The Company also issued 1,400 common shares
to 1 shareholder in connection with a six-month investor relations
campaign at fair value of $175,000.
During
the period ended August 31, 2015, the Company issued 100,000
preferred shares to 1 shareholder at fair value of $18,000, a
related party of the Company, in connection with services
rendered.
As of
August 31, 2016, the Company has not granted any stock options and
has not recorded any stock-based compensation.
NOTE 7 – LOAN PAYABLE - RELATED PARTIES
During the period ended August 31, 2016
and 2015, advances from a director of
the Company were $24,111 and $Nil, respectively. The amounts are
unsecured, non-interest bearing and are due on demand. During the
same period, the Company made repayments of $99,643 to a
director.
During the period ended August 31, 2016
and 2015, advances from related
parties were $43,934 and $294,972, respectively. During the period
ended August 31, 2014, advances from related parties totaled
$183,481. The amounts are unsecured, non-interest bearing and are
due on demand. During the same period, the Company made repayments
of $63,900 to related parties; of this amount of $60,700 was paid
in cash and $3,200 in common shares of the
Company.
During
the period ended August 31, 2016 and 2015, management fees totaling
$216,000 and $Nil, respectively, where accrued as payable to two
directors of the Company.
35
AIM EXPLORATION
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
August
31, 2016
NOTE 8 – RESTATEMENTS
During
the year ended August 31, 2016, accounting errors were discovered
that required a restatement of amounts previously reported, related
to loan payable that was issued against a finder's fee incurred.
The loan payable was amended, and the terms revised to a
convertible note payable. The loan payable and its subsequent
amendment to a convertible note payable were not reported during
the year ended August 31, 2015. This error resulted in changes to
the convertible note, derivative liability, accretion expense,
finder's fee expense, interest expense, finance costs, and the
change in fair value of derivative liability. As a result of
correcting these errors, the Company’s net loss increased by
$157,923 for the year ended August 31, 2015.
36
AIM EXPLORATION
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 8 – RESTATEMENTS – CONTINUED
BALANCE
SHEET
August
31, 2015
|
||||
ASSETS
|
Originally
Stated
|
Adjustments
|
Note
|
Restated
|
CURRENT
ASSETS
|
|
|
|
|
Cash
|
$
2,349
|
|
|
$
2,349
|
Loans
receivable
|
45,800
|
|
|
45,800
|
Deposits
|
39,303
|
|
|
39,303
|
Total
Current Assets
|
87,452
|
|
|
87,452
|
Mineral
property investment
|
326,969
|
|
|
326,969
|
TOTAL
ASSETS
|
$
414,421
|
|
|
$
414,421
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDER'S EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts payable
and accrued liabilities
|
$
214,513
|
|
|
$
214,513
|
Loans
payable – related party
|
478,453
|
|
|
478,453
|
Convertible note
– related party
|
103,762
|
|
|
103,762
|
Convertible note,
net of unamortized discount
|
70,936
|
13,328
+ 2,443
|
b
|
86,707
|
Derivative
liability
|
429,535
|
146,204
– 4,052
|
a,
c
|
571,687
|
TOTAL
LIABILITIES
|
1,297,199
|
157,923
|
|
1,455,122
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|
|
|
|
Capital
Stock
|
|
|
|
|
Authorized
|
|
|
|
|
250,000,000 shares
of common stock, $0.001 par valueIssued and outstanding 126,126,678
shares (89,100,000 shares outstanding as at August 31,
2015)
|
89,200
|
|
|
89,200
|
1,000,000 shares of
preferred stock, $0.001 par value Issued and
outstanding 100,000 shares (1,000,000 as at August 31,
2015)
|
|
|
|
|
Additional paid in
capital
|
626,098
|
|
|
626,098
|
Accumulated
deficit
|
(1,598,076)
|
(157,923)
|
|
(1,755,999)
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(882,778)
|
(157,923)
|
|
(1,040,701)
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
414,421
|
|
|
$
414,421
|
Notes:
a.
Record issuance of
convertible note
b.
Record accretion
and accrue interest
c.
Mark-to market
convertible note
37
AIM EXPLORATION
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 8 – RESTATEMENTS – CONTINUED
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
August
31, 2015
|
||||
|
Originally
Stated
|
Adjustments
|
Note
|
Restated
|
|
|
|
|
|
REVENUE
|
|
|
|
|
Total
Revenue
|
$
0
|
|
|
$
0
|
Gross
Profit
|
0
|
|
|
0
|
MINERAL
PROPERTY OPERATIONS
|
|
|
|
|
Acquisition
expenses
|
(37,556)
|
|
|
(37,556)
|
Exploration
expenses
|
15,713
|
|
|
15,713
|
Total
Mineral Property Operations
|
(21,843)
|
|
|
(21,843)
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
Accretion
|
72,001
|
13,328
|
b
|
85,329
|
Consulting
fees
|
128,451
|
|
|
128,451
|
Filling
fees
|
15,923
|
|
|
15,923
|
Finder’s
fees
|
34,925
|
78,678
|
a
|
113,603
|
Management
fees
|
241,500
|
|
|
241,500
|
Office
& general
|
70,806
|
|
|
70,806
|
Professional
fees
|
306,925
|
|
|
306,925
|
Public
relations
|
180,452
|
|
|
180,452
|
Total
Expenses
|
1,050,983
|
92,006
|
|
1,142,989
|
|
|
|
|
|
Net
Loss
|
(1,029,140)
|
|
|
(1,121,146)
|
|
|
|
|
|
Interest
expense
|
(46,669)
|
(2,443)
|
b
|
(49,112)
|
Finance
costs
|
(238,472)
|
(67,526)
|
a
|
(305,998)
|
Change
in fair value of derivative liability
|
12,301
|
4,052
|
c
|
16,353
|
Write-down
of accounts payable
|
11,285
|
|
|
11,285
|
|
|
|
|
|
Total
Other Expense
|
(261,555)
|
(65,917)
|
|
(327,472)
|
|
|
|
|
|
Net
Loss
|
$
(1,290,695)
|
$
(157,923)
|
|
$
(1,448,618)
|
|
|
|
|
|
BASIC
AND DILUTED LOSS PER COMMON SHARE
|
$
0.01
|
|
|
$
0.01
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
88,446,164
|
|
|
88,446,164
|
BASIC
AND DILUTED LOSS PER PREFERRED SHARE
|
$
0.00
|
|
|
$
0.00
|
WEIGHTED AVERAGE NUMBER OF PREFERRED SHARES
OUTSTANDING
|
99,452
|
|
|
99,452
|
Notes:
a.
Record issuance of
convertible note
b.
Record accretion
and accrue interest
c.
Mark-to market
convertible note
38
AIM EXPLORATION
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 8 – RESTATEMENTS – CONTINUED
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
|
Common Stock
|
Preferred Stock
|
|
|
|
|
|
|
||
|
Number of
|
Amount
|
Number of
|
Amount
|
Additional Paid-in Capital
|
Share Subscriptions Receivable
|
Accumulated Deficit
Originally Stated
|
Adjustments
|
Notes
|
Total
|
|
shares
|
$
|
shares
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
Balance
at inception – February 18, 2010
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
-
|
Founders
shares, issued for cash
|
10,000,000
|
10,000
|
-
|
-
|
-
|
(10,000)
|
-
|
|
|
-
|
Net
Loss to August 31, 2010
|
-
|
-
|
-
|
-
|
-
|
-
|
(29,400)
|
|
|
(29,400)
|
Balance, August 31, 2010
|
10,000,000
|
10,000
|
-
|
-
|
-
|
(10,000)
|
(29,400)
|
|
|
(29,400)
|
Subscription
Received
|
-
|
-
|
-
|
-
|
-
|
10,000
|
-
|
|
|
10,000
|
Common
stock issued for cash
|
40,000,000
|
40,000
|
-
|
-
|
-
|
-
|
-
|
|
|
40,000
|
Net
loss for the year ended August 31, 2011
|
-
|
-
|
-
|
-
|
-
|
-
|
(18,939)
|
|
|
(18,939)
|
Balance, August 31, 2011
|
50,000,000
|
50,000
|
-
|
|
-
|
-
|
(48,339)
|
|
|
1,661
|
Net
loss to August 31, 2012
|
–
|
–
|
–
|
–
|
-
|
-
|
(28,109)
|
|
|
(28,109)
|
Balance, August 31, 2012
|
50,000,000
|
50,000
|
-
|
-
|
-
|
-
|
(76,448)
|
|
|
(26,448)
|
Sale
of common stock 18,000,000 common shares at $0.001 par
value
|
18,000,000
|
18,000
|
-
|
-
|
-
|
-
|
-
|
|
|
18,000
|
Imputed
Interest
|
-
|
-
|
-
|
-
|
2,035
|
-
|
-
|
|
|
2,035
|
Net
loss for the year ended August 31, 2013
|
-
|
-
|
-
|
-
|
-
|
-
|
(47,901)
|
|
|
(47,901)
|
Balance, August 31, 2013
|
68,000,000
|
68,000
|
-
|
-
|
2,035
|
-
|
(124,349)
|
|
|
(54,314)
|
15,750,000
common shares at $0.001 par value
|
15,750,000
|
15,750
|
-
|
-
|
311,219
|
-
|
-
|
|
|
326,969
|
Net
loss for the year ended August 31, 2014
|
-
|
-
|
-
|
-
|
-
|
-
|
(183,032)
|
|
|
(183,032)
|
Balance, August 31, 2014
|
83,750,000
|
83,750
|
-
|
-
|
313,254
|
-
|
(307,381)
|
|
|
89,623
|
Shares
issued for services
|
350,000
|
350
|
1,000,000
|
100
|
192,550
|
-
|
-
|
|
|
193,000
|
Shares
issued in deposit
|
5,000,000
|
5,000
|
-
|
-
|
-
|
-
|
-
|
|
|
5,000
|
Convertible
debt discount
|
-
|
-
|
-
|
-
|
99,630
|
-
|
-
|
|
|
99,630
|
Gain
on repurchase of convertible note
|
-
|
-
|
-
|
-
|
20,664
|
-
|
-
|
|
|
20,664
|
Net
loss for the year ended August 31, 2015
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,290,695)
|
(157,923)
|
a
|
(1,448,618)
|
Balance, August 31, 2015
|
89,100,000
|
89,100
|
1,000,000
|
100
|
626,098
|
-
|
(1,598,076)
|
(157,923)
|
|
(1,755,999)
|
Notes:
a.
Record issuance of
convertible note
39
AIM EXPLORATION
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 8 – RESTATEMENTS – CONTINUED
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
August 31, 2015
|
||||
|
Originally
Stated
|
Adjustments
|
Note
|
Restated
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
Net
Loss
|
$(1,290,695)
|
$(157,923)
|
a, b, c
|
$(1,448,618)
|
Accretion
related to convertible note
|
72,001
|
13,328
|
b
|
85,329
|
Debt
discount related to convertible note
|
(35,478)
|
|
|
(35,478)
|
Finance
costs
|
238,472
|
67,526
|
a
|
305,998
|
Accrued
interest on convertible note
|
11,544
|
2,443
|
b
|
13,987
|
Loss
on derivative liability
|
(12,301)
|
(4,052)
|
c
|
(16,353)
|
Loss
on repurchase of convertible note
|
20,664
|
|
|
20,664
|
Shares
issued for services
|
193,000
|
|
|
193,000
|
Write-down
of accounts payable
|
(11,285)
|
|
|
(11,285)
|
Adjustments to
reconcile Net Income (Loss) to netCash used in operating
activities:
|
|
|
|
|
Loans
Receivable
|
(45,800)
|
|
|
(45,800)
|
Deposits
|
(8,798)
|
|
|
(8,798)
|
Provisions
|
(55,000)
|
|
|
(55,000)
|
Accounts
Payable
|
189,566
|
|
|
189,566
|
|
|
|
|
|
NET CASH USED INOPERATING ACTIVITIES
|
(734,110)
|
(78,678)
|
|
(812,788)
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
Convertible debt
– related party
|
170,000
|
|
|
170,000
|
Convertible
debt
|
306,875
|
78,678
|
a
|
385,553
|
Payments on
convertible notes
|
(47,250)
|
|
|
(47,250)
|
Loans from related
party
|
304,972
|
|
|
304,972
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
734,597
|
78,678
|
|
813,275
|
|
|
|
|
|
NET INCREASE IN CASH
|
487
|
|
|
487
|
|
|
|
|
|
CASH, BEGINNING OF PERIOD
|
1,862
|
|
|
1,862
|
|
|
|
|
|
CASH, END OF PERIOD
|
$2,349
|
|
|
$2,349
|
Notes:
a.
Record issuance of
convertible note
b.
Record accretion
and accrue interest
c.
Mark-to market
convertible note
40
AIM EXPLORATION INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2016
NOTE 9 – SUBSEQUENT EVENTS
1.
On September 12,
2016, the Company amended its authorized capital by increasing the
number of authorized common shares from 250,000,000 common shares
with a par value of $0.001 per common share to 1,500,000,000 common
shares with a par value of $0.001 per common share. The amendment
was passed by a majority of the Company’s shareholders on
September 9, 2016.
2.
Subsequent to
August 31, 2016, the Company issued 219,444,444 common shares to
three directors in compensation for their services to August 31,
2016. The fair value of these shares was deemed to be
$395,000.
3.
Subsequent to
August 31, 2016, the Company issued 220,000,000 common shares to
Percana pursuant to the amended agreement outlined in Note 4. The
fair value of these shares was deemed to be $220,000.
4.
Subsequent to
August 31, 2016, the Company issued 25,000,000 common shares in
connection with services rendered. The fair value of these shares
was $75,000.
5.
Subsequent to
August 31, 2016, the Company issued 40,000,000 common shares in
connection with the conversion of a related party convertible note
with a face value of $100,000.
6.
Subsequent to
August 31, 2016, the Company issued 40,000,000 common shares in
connection with debt repayment to a related party in the amount of
$40,000.
7.
Subsequent to
August 31, 2016, the Company issued 110,000 preferred shares to a
director in compensation for their services to August 31,
2016.
8.
On October 31,
2016, the Company closed an offering and offered 3,343,340 common
shares for gross proceeds of $98,300.
41
Item
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE
On
August 13, 2015, the Company dismissed David A. Aronson, CPA, PA as
the Company’s principal accountant and auditor. The
auditor’s reports on the financial statements for either of
the past two years contained no adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles. The Company’s Board of
Directors approved this dismissal.
On or
about August 13, 2015, the Company’s Board of Directors
approved the engagement of Anton & Chia LLC as its principal
accountant to audit the Company’s financial statements.
During the Company’s two most recent fiscal years or
subsequent interim period, the Company has not consulted with Anton
& Chia LLC regarding the application of accounting principles
to a specific transaction, either completed or proposed, or the
type of audit opinion that might be rendered on the Company’s
financial statements. Neither has Anton & Chia LLC provided
advice to the Company, either written or oral, that has been deemed
an important factor considered by the Company in reaching a
decision as to its accounting, auditing or financial
reporting.
There
were no disagreements with our accountants related to accounting
principles or practices, financial statement disclosure, internal
controls or auditing scope or procedure during the two fiscal years
and subsequent interim periods.
Item 9A. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Our
management is responsible for establishing and maintaining adequate
internal control over financial reporting. Responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of control procedures.
The objectives of internal control include providing
management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with
management’s authorization and recorded properly to permit
the preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the United States.
Our management, including our chief executive officer and
chief financial officer, assessed the effectiveness of our internal
control over financial reporting as of August 31, 2016. In
making this assessment, our management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control-Integrated Framework.
Our management, including our chief executive officer and
chief financial officer, has concluded that, as of August 31, 2015,
our internal control over financial reporting was not effective in
providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with US generally accepted
accounting principles. Our management reviewed the results of
their assessment with our board of directors.
This
annual report does not include an attestation report of our
company’s registered public accounting firm regarding
internal control over financial reporting. Management’s
report was not subject to attestation by our company’s
registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission that permit our company to
provide only management’s report in this annual
report.
Inherent
Limitations on Effectiveness of Controls
Internal control
over financial reporting has inherent limitations which include but
is not limited to the use of independent professionals for advice
and guidance, interpretation of existing and/or changing rules and
principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over
financial reporting is a process that involves human diligence and
compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent
limitations, internal control over financial reporting may not
prevent or detect misstatements on a timely basis, however these
inherent limitations are known features of the financial reporting
process and it is possible to design into the process safeguards to
reduce, though not eliminate, this risk. Therefore, even
those systems determined to be effective can provide only
reasonable assurance with respect to financial statement
preparation and presentation. Projections of any evaluation
of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may
deteriorate.
Changes
in Internal Control over Financial Reporting
There
have been no changes in our internal controls over financial
reporting that occurred during the year ended August 31, 2014 that
have materially or are reasonably likely to materially affect, our
internal controls over financial reporting.
Item
9B. OTHER INFORMATION
None.
42
PART
III
Item
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Directors
and Executive Officers
All
directors of our company hold office until the next annual meeting
of the security holders or until their successors have been elected
and qualified. The officers of our company are appointed by
our board of directors and hold office until their death,
resignation or removal from office.
On
November 1, 2016, Mr. Guil Rivera was removed as a director of the
Company.
Our
directors and executive officers, their ages, positions held, and
duration as such, are as follows:
Name
|
|
Age
|
|
Position
|
Mr.
James Robert Todhunter
|
|
64
|
|
President, CEO
& Director
|
Mr.
Gregorio Formoso
|
|
52
|
|
Secretary,
Treasurer, CFO & Director
|
Dr.
Carlos Arias Eguiguren
|
|
54
|
|
Director
|
James
Robert Todhunter, President, CEO, Director
Mr.
Todhunter has been our President, Chief Executive Officer and a
Director since September 18, 2014. From 2007 to present, Mr.
Todhunter has been a director or officer of Percana Mining Corp, a
private company. He has accrued a monthly fee of $15,000 per month
since September 1, 2014.
Gregorio
Formoso, Secretary, Treasurer, CFO, Director
Mr.
Formoso has been our sole officer and a director since our
inception on February 18, 2010. He is responsible for
directing the focus of our operations as well as handling our
day to day operations including sourcing new customers as well as
locating suppliers and consultants that we need to contract.
From 2010 through the present, Mr. Formoso has been the Vice
President for Operations at PharmaCanada, Inc., a provider of early
cancer detection technology in the Philippines. As VP for
Operations, he was instrumental in setting up the first
quantitative cytology laboratory in the Philippines, which uses a
new proprietary technology from Canada. This included
sourcing all the essential equipment, materials and supplies to
operate the laboratory and establishing an effective and efficient
process for the distribution and retrieval of specimen collection
kits between the central laboratory and partner hospitals, clinics
and diagnostic centers. From 2006 to 2010, he was President
and COO of Asialink Business Process Outsourcing, Inc., a provider
of outsourced payroll services to companies in the
Philippines. He is also a Director and Vice President at
Sherpa Global Supply Chain Solutions Center, Inc., a consultancy
and learning center, specializing in Logistics and Supply Chain
Management, that he helped set up in 2009.
Prior
to these, Greg developed a career in logistics and supply chain
management, occupying various management positions over a span of
23 years in the different units of San Miguel Corporation, the
largest food, beverage and packaging materials conglomerate in the
Philippines.
Gregorio Formoso
was employed at San Miguel Corporation (“SMC”) for over
23 years, including 10 years of holding various managerial
positions in the beverage business. In 1999, he was involved
in the acquisition and integration of Sugarland Beverage
Corporation into SMC’s non-liquor business. He was also
involved in new package development where he became familiar with
SMC’s glass business, where he still maintains a number of
contacts. After leaving SMC in 2007, he was involved in the
start-up of a Business Process Outsourcing company, offering
outsourced payroll. In 2011, he was instrumental in the
start-up of a company offering innovative early cancer detection
technology (the first in the Philippines and in Asia).
In
2010, Mr. Formoso was influential convincing Alice Raval-Ventura to
look for joint venture partners for the further development and
operation of the Raval mining claims. He was responsible for
initiating and developing the transaction proposal.
All of
Mr. Formoso’s extensive experience outlined above led to our
decision he should serve as our director.
Mr.
Formoso will remain as our officer until he resigns or is
replaced. He will serve as a director for a one-year term or
until his successor is elected and qualified or until his earlier
resignation or removal.
43
Dr.
Carlos
Arias Eguiguren, Director
Dr.
Arias has sustained a long and distinguished career in the mining
industry throughout the world. Dr. Arias is also a lawyer
specializing in mining law. He was formally educated in Ecuador
where he received a law degree in 1989 and later a doctorate in law
in 2000. He received his Master's Degree in International Business
Legal Studies (IBLS) in 1993 from the University of Exeter in the
United Kingdom, followed by a diploma in transactional contracts
from the International Development Law Institute in Rome, Italy
that same year.
Dr.
Arias is a former Director of the Ecuadorian Chamber of Mines,
serving terms in 1996-1998 and 2001-2005. He has served with
several mining companies and has been responsible for important
mining projects pertaining to acquisition and development. From
1993-1995, Dr. Arias served as President of Ecuadorian Minerals
Corporation (now International Minerals) and was charged with the
acquisition and consolidation of the Gaby and Rio Blanco (formerly
San Luis) mining projects. From 2001-2004, he served as General
Manager of Aurelian Resources, where he was responsible for the
acquisition of the La Zarza mining project and the consolidation of
35 concessions into a single 90,000-hectare project. From
2000-2008, Dr. Arias served as General Manager of Avalanche
Resources, where he was instrumental in acquiring ten mining
concessions in Ecuador and the Alto El Toro gold project in
Colombia.
Currently,
Dr. Arias serves as Vice President and Director of Fort St. James
Nickel Corp. of British Colombia; General Manager of Lateegra
Ecuador S.A.; associate of Investbank Corp.; and Executive Director
for the Andean Region of OIS & Associates. Additionally, he
maintains a busy legal practice, serving as advisor to many
corporations.
Identification
of Significant Employees
We have
no significant employees, other than James Robert Todhunter and
Gregorio Formoso.
Family
Relationships
There
are no family relationships among our officers or
directors.
Legal
Proceedings
No
officer, directors or persons nominated for such positions,
promoter or significant employee has been involved in the last ten
years in any of the following:
●
Any bankruptcy
petition filed by or against any business of which such person was
a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
●
Any conviction in a
criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
●
Being subject to
any order, judgment, or decree, not subsequently reversed,
suspended, or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business,
securities or banking activities; and
●
Being found by a
court of competent jurisdiction (in a civil action), the Securities
and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended, or
vacated.
Audit
Committee and Audit Committee Financial Expert
Our
company does not have an audit committee or an audit committee
financial expert (as defined in Item 407 of Regulation S-K) serving
on its Board of Directors. All current members of the Board
of Directors lack sufficient financial expertise for overseeing
financial reporting responsibilities. Our company has not yet
employed an audit committee financial expert on its Board due to
the inability to attract such a person.
Our
company intends to establish an audit committee of the board of
directors, which will consist of independent directors. The
audit committee’s duties will be to recommend to our
company’s board of directors the engagement of an independent
registered public accounting firm to audit our company’s
financial statements and to review our company’s accounting
and auditing principles. The audit committee will review the
scope, timing and fees for the annual audit and the results of
audit examinations performed by the internal auditors and
independent registered public accounting firm, including their
recommendations to improve the system of accounting and internal
controls. The audit committee will at all times be composed
exclusively of directors who are, in the opinion of our
company’s board of directors, free from any relationship
which would interfere with the exercise of independent judgment as
a committee member and who possess an understanding of financial
statements and generally accepted accounting
principles.
Compliance
with Section 16(a) of the Securities Exchange Act of
1934
Under Section 16(a) of the Exchange Act, all executive officers,
directors, and each person who is the beneficial owner of more than
10% of the common stock of a company that files reports pursuant to
Section 12 of the Exchange Act of 1934, are required to report the
ownership of such common stock, options, and stock appreciation
rights (other than certain cash only rights) and any changes in
that ownership with the Securities and Exchange Commission. The
Company has evaluated all relevant Section 16(a) filings and has
determined that the company is compliant with this section to the
best of its knowledge.
44
Item 11. EXECUTIVE COMPENSATION
The
particulars of the compensation paid to the following
persons:
●
our principal
executive officer;
●
each of our two
most highly compensated executive officers who were serving as
executive officers at the end of the years ended August 31, 2016
and August 31, 2015,
who we
will collectively refer to as the named executive officers of our
company, are set out in the following summary compensation table,
except that no disclosure is provided for any named executive
officer, other than our principal executive officers, whose total
compensation did not exceed $100,000 for the respective fiscal
year:
SUMMARY COMPENSATION TABLE
|
|||||||||
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)(1)
|
Option Awards
($)(1)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change in
Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
All Other
Compensation ($)
|
Total
($)
|
James Robert
Todhunter
|
2015
|
-
|
-
|
-
|
-
|
-
|
-
|
180,000
|
180,000
|
President, CEO,
Director
|
2016
|
-
|
-
|
-
|
-
|
-
|
-
|
180,000
|
180,000
|
Gregorio
Formoso
|
2015
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Secretary,
Treasurer, Director
|
2016
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Guil
Rivera
|
2015
|
-
|
-
|
-
|
-
|
-
|
-
|
36,000
|
36,000
|
Director
|
2016
|
-
|
-
|
-
|
-
|
-
|
-
|
36,000
|
36,000
|
Narrative
Disclosure to Summary Compensation Table
There
are no employment contracts, compensatory plans or arrangements,
including payments to be received from our company with respect to
any executive officer, that would result in payments to such person
because of his or her resignation, retirement or other termination
of employment with our company, or its subsidiaries, any change in
control, or a change in the person’s responsibilities
following a change in control of our company.
Stock
Option Plan
Currently, we do
not have a stock option plan in favor of any director, officer,
consultant or employee of our company.
Stock
Options/SAR Grants
During
our fiscal year ended August 31, 2016 there were no options granted
to our named officers or directors.
Outstanding
Equity Awards at Fiscal Year End
No
equity awards were outstanding as of the year ended August 31,
2016.
Option
Exercises
During
our fiscal year ended August 31, 2016 there were no options
exercised by our named officers.
Compensation
of Directors
We do
not have any agreements for compensating our directors for their
services in their capacity as directors, although such directors
are expected in the future to receive stock options to purchase
shares of our common stock as awarded by our board of
directors.
We have
determined that none of our directors are independent directors, as
that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the
Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(15) of the NASDAQ Marketplace Rules.
Pension,
Retirement or Similar Benefit Plans
There
are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers.
We have no material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be
granted at the discretion of the board of directors or a committee
thereof.
45
Indebtedness
of Directors, Senior Officers, Executive Officers and Other
Management
None of
our directors or executive officers or any associate or affiliate
of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement,
letter of credit or other similar agreement or understanding
currently outstanding.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security
Ownership of Certain Beneficial Owners and Management
The
following tables set forth the ownership, as of the date of this
Prospectus, of our common stock by each person known by us to be
the beneficial owner of more than 5% of our outstanding common
stock, our directors, and our executive officers and directors as a
group. To the best of our knowledge, the persons named have
sole voting and investment power with respect to such shares,
except as otherwise noted. There are not any pending or
anticipated arrangements that may cause a change in
control.
The
information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules
of the Securities and Exchange Commission and is not necessarily
indicative of ownership for any other purpose. Under these
rules, a person is deemed to be a "beneficial owner" of a security
if that person has or shares the power to vote or direct the voting
of the security or the power to dispose or direct the disposition
of the security. A person is deemed to own beneficially any
security as to which such person has the right to acquire sole or
shared voting or investment power within 60 days through the
conversion or exercise of any convertible security, warrant, option
or other right. More than one person may be deemed to be a
beneficial owner of the same securities. The percentage of
beneficial ownership by any person as of a particular date is
calculated by dividing the number of shares beneficially owned by
such person, which includes the number of shares as to which such
person has the right to acquire voting or investment power within
60 days, by the sum of the number of shares outstanding as of such
date plus the number of shares as to which such person has the
right to acquire voting or investment power within 60 days.
Consequently, the denominator used for calculating such
percentage may be different for each beneficial owner. Except
as otherwise indicated below, we believe that the beneficial owners
of our common stock listed below have sole voting and investment
power with respect to the shares shown. The mailing address
for Mr. Arias, Mr. Formoso and Mr. Rivera is Suite 514 VGP Center
6772 Ayala Ave. Makati City, Manila, Philippines.
Shareholders
(1)
|
# of Common
Shares
|
Percentage
|
# of Preferred
Shares
|
Percentage
|
Gregorio
Formoso
|
100,026,000
|
17.3%
|
-
|
-
|
Guil
Rivera
|
100,120,000
|
17.4%
|
100,000
|
47.6%
|
Carlos
Arias
|
19,444,444
|
3.4%
|
|
|
James Robert
Todhunter (2)
|
235,750,000
|
40.9%
|
110,000
|
52.4%
|
All
directors and executive officers as a group
|
455,340,444
|
79.0%
|
210,000
|
100.0%
|
(1)
This table is based
upon information derived from our stock records. The
shareholder named in this table has sole or shared voting and
investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based
upon 576,728,348 shares of common stock outstanding as
of December 15, 2016, and 210,000 preferred stock outstanding
as of December 15, 2016.
(2)
Mr. James Robert
Todhunter, a Director of the Company, beneficially owns these
shares through Percana Mining Corp., a company in which he is a
director, owner and has voting control.
Changes
in Control
We are
unaware of any contract or other arrangement or provisions of our
Articles or Bylaws the operation of which may at a subsequent date
result in a change of control of our company. There are not
any provisions in our Articles or Bylaws, the operation of which
would delay, defer, or prevent a change in control of our
company.
46
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Except
as disclosed herein, no director, executive officer, shareholder
holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in
any transaction, or proposed transaction since the year ended
August 31, 2016, in which the amount involved in the transaction
exceeded or exceeds the lesser of $120,000 or one percent of the
average of our total assets at the year-end for the last three
completed fiscal years.
Director
Independence
We
currently act with three directors. We have determined that
two of our directors are “independent directors” as
defined in NASDAQ Marketplace Rule 4200(a)(15) and one of our
directors is not an “independent
directors”.
We do
not have a standing audit, compensation or nominating committee,
but our entire board of directors acts in such capacities. We
believe that our members of our board of directors are capable of
analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting. The
board of directors of our company does not believe that it is
necessary to have an audit committee because we believe that the
functions of an audit committee can be adequately performed by the
board of directors. In addition, we believe that retaining an
independent director who would qualify as an “audit committee
financial expert” would be overly costly and burdensome and
is not warranted in our circumstances given the early stages of our
development.
Item 14. PRINCIPAL ACCOUNTING FEES AND
SERVICES
|
Year
Ended
August 31,
2016
|
Year
Ended
August 31,
2015
|
Audit
fees
|
$20,000*
|
$15,325
|
Audit-related
fees
|
Nil$
|
Nil$
|
Tax
fees
|
Nil$
|
Nil$
|
All other
fees
|
Nil$
|
Nil$
|
Total
|
$20,000
|
$15,325
|
*
Estimate
Our
board of directors pre-approves all services provided by our
independent auditors. All of the above services and fees were
reviewed and approved by the board of directors either before or
after the respective services were rendered.
Our
board of directors has considered the nature and amount of fees
billed by our independent auditors and believes that the provision
of services for activities unrelated to the audit is compatible
with maintaining our independent auditors’
independence.
47
PART
IV
Item 15. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES
(a)
|
Financial
Statements
|
|
|
|
|
|
(1)
|
Financial
statements for our company are listed in the index under Item 8 of
this document
|
|
(2)
|
All
financial statement schedules are omitted because they are not
applicable, not material or the required information is shown in
the financial statements or notes thereto.
|
Exhibits
Exhibit
Number
|
|
Exhibit
Description
|
10.1
|
|
Note
Purchase Agreement by and among the Company and Tangiers
Investment Group, LLC, dated October 28, 2015
|
10.2
|
|
Convertible
Promissory Note issued to Tangiers Investment Group, LLC, dated
October 28, 2015
|
10.3
|
|
Security Agreement
by and among the Company and Tangiers Investment Group, LLC, dated
October 28, 2015
|
10.4
|
|
Convertible
Promissory Note issued to Auctus Fund LLC, dated August 14,
2015
|
10.5
|
|
Securities
Purchase Agreement by and among the Company and Auctus Fund LLC,
dated August 14, 2015
|
10.6
|
|
Convertible
Promissory Note issued to St. George Investments LLC, dated August
31, 2015
|
10.7
|
|
Securities
Purchase Agreement by and among the Company and St. George
Investments LLC, dated August 31, 2015
|
10.8
|
|
Convertible
Promissory Note issued to EMA Financial, LLC, dated September 17,
2015
|
10.9
|
|
Securities
Purchase Agreement by and among the Company and EMA Financial, LLC,
dated September 17, 2015
|
10.10
|
|
Convertible
Promissory Note issued to Yoshar Trading, LLC, dated January 12,
2016
|
10.11
|
|
Securities
Purchase Agreement by and among the Company and Yoshar Trading,
LLC, dated January 12, 2016
|
|
Certification of
the Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14 of
the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
|
|
|
Certification of
the Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of
the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
|
|
|
Certification of
Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
Certification of
Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
EX-101.INS
|
|
XBRL
Instance Document
|
EX-101.SCH
|
|
XBRL
Taxonomy Extension Schema
|
EX-101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase
|
EX-101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase
|
EX-101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase
|
EX-101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase
|
48
The
undersigned registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
a) To
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b) To
reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; Notwithstanding the forgoing, any increase
or decrease in Volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more
than 20% change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the
effective registration statement.
c) To
include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement.
2.
That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
3. To
remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at
the termination of the offering.
4.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to officers, directors, and
controlling persons pursuant to the provisions above, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities is asserted our director, officer, or
other controlling person in connection with the securities
registered, we will, unless in the opinion of our legal counsel the
matter has been settled by controlling precedent, submit the
question of whether such indemnification is against public policy
to a court of appropriate jurisdiction. We will then be
governed by the final adjudication of such issue.
5. Each
prospectus filed pursuant to Rule 424(b) as part of a Registration
statement relating to an offering, other than registration
statements relying on Rule 430(B) or other than prospectuses filed
in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first
used after effectiveness. Provided; however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by referenced into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons
pursuant to the provisions above, or otherwise, we have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities,
other than the payment by us of expenses incurred or paid by one of
our directors, officers, or controlling persons in the successful
defense of any action, suit or proceeding, is asserted by one of
our directors, officers, or controlling person sin connection with
the securities being registered, we will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the
Securities Act, and we will be governed by the final adjudication
of such issue.
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Signatures
Pursuant to the
requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of
Henderson, on the December 15, 2016.
Aim
Exploration Inc.
By:/s/ James Robert Todhunter
James
Robert Todhunter
President, Chief
Executive Officer
Pursuant to the
requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE
|
CAPACITY
IN WHICH SIGNED
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DATE
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/s/ James Robert Todhunter
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President,
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December 15,
2016
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James
Robert Todhunter
|
Chief Executive
Officer
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/s/ Gregorio Formoso
|
Secretary,
Treasurer, Principal Accounting Officer,
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December 15,
2016
|
Gregorio
Formoso
|
Principal Financial
Officer and Director
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