UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended November 30, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE Act of 1934 for the transition period from ___ to ___.
Commission File Number 0-30368
American International Ventures, Inc.
--------------------------------------------
(Name of Small Business Issuer in its charter)
Delaware 22-3489463
------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer Identification no.)
incorporation or organization)
260 Garibaldi Avenue, Lodi, New Jersey 07644
--------------------------------------------
(Address of principal executive offices)
(973) 335-4400
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(Registrant's telephone number, including area code)
Securities registered under Section 12 (b) of the Act:
Title of each class Name of exchange on which
to be registered each class is to be registered
None None
Securities registered under Section 12(g) of the Act:
Common Stock
--------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 12 months and (2) has been subject to such filing requirements for the past 90 days.
(1) Yes: [ ] No: [X]
(2) Yes: [X] No: [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report:
14,445,544 shares of Common Stock, $.00001 par value.
Transitional Small Business Issuer Format (Check One):
Yes: No: X
PART I -FINANCIAL INFORMATION
Page Number
Item 1. Financial Statements (Unaudited):
-Consolidated Balance Sheet at November 30, 2001
and May 31, 2001----------------------------------------------3
-Consolidated Statements of Operations
for the six months ended November 30, 2001 and the six months
ended November 30, 2000-----------------------------------------4
-Consolidated Statements of Operations
for the three months ended November 30, 2001 and the three
months ended November 30, 2000----------------------------------5
-Consolidated Statements of Cash Flows for the six months
ended November 30, 2001 and the six months
ended November 30, 2000 ----------------------------------------6
-Notes to Financial Statements ----------------------------------7
Item 2. Management's Discussion and Analysis or Plan of Operations ----8
Item 3. Controls and Procedures.---------------------------------------10
PART II
Item 1. Legal Proceedings -------------------------------------------11
Item 2. Changes in Securities ---------------------------------------11
Item 3. Defaults Upon Senior Securities -----------------------------11
Item 4. Submission of Matters to a Vote of Security Holders ---------11
Item 5. Other information -------------------------------------------11
Item 6. Exhibits and Reports on Form-K-------------------------------11
Signatures ------------------------------------------------------------11
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
November 30,
May 31,
2001
2001
Current Assets
Cash
$ 1,390
$ 3,811
Accounts receivable, less allowance for
doubtful accounts
4,630
13,145
Inventory
1,717
3,178
Prepaid expense
150
150
Total current assets
7,887
20,284
Fixed Assets
Office furniture and equipment
15,682
21,589
Less, accumulated depreciation
7,376
6,682
Net fixed assets
8,306
14,907
Other Assets
Deferred financing cost
7,417
8,417
Security deposits
550
5,544
Stockholder advance
400
-
Total other assets
8,367
13,961
TOTAL ASSETS
$ 24,560
$ 49,152
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable
$ 332,987
$ 194,508
Payroll and sales taxes payable
84,437
62,260
Notes payable, due currently
94,316
92,308
Security deposit payable
-
1,800
Stockholder advance
13,000
8,000
Total current liabilities
524,740
358,876
Notes Payable
54,580
63,488
Total Liabilities
579,320
422,364
Stockholders’ Deficit
Common stock – authorized, 50,000,000
shares of $.00001par value; issued and
outstanding, 14,445,544 shares
144
144
Capital in excess of par value
599,043
599,043
Accumulated deficit
(1,153,947)
(972,399)
Total stockholders’ deficit
(554,760)
(373,212)
TOTAL LIABILITIES AND
STOCKHOLDERS’ DEFICIT
$ 24,560
$ 49,152
The accompanying notes are an integral part of these financial statements.
F-1
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Month Periods Ended November 30, 2001 and 2000
2001
2000
Net Sales
$ 185,877
$ 196,702
Cost of Goods Sold
119,807
128,922
Gross Profit
66,070
67,780
Selling and Administrative Expenses
(236,396)
(216,649)
Operating profit (loss)
(170,326)
(148,869)
Other Income and Expense
Rental income
6,750
5,400
Loss on sales of furniture
(3,259)
-
Interest expense
(14,713)
(3,663)
Net Loss
$(181,548)
$(147,132)
Loss Per Share:
Basic and Diluted
$( .01 )
$( .01 )
The accompanying notes are an integral part of these financial statements.
F-2
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Month Periods Ended November 30, 2001 and 2000
2001
2000
Net Sales
$ 95,519
$ 62,898
Cost of Goods Sold
96,406
88,445
Gross Profit (Loss)
(887)
(25,547)
Selling and Administrative Expenses
119,198
137,298
Operating profit (loss)
(120,085)
(162,845)
Other Income and Expense
Rental income
-
5,400
Loss on sales of furniture
(3,259)
-
Interest expense
(11,431)
(1,813)
Net Loss
$(134,775)
$(159,258)
Loss Per Share:
Basic and Diluted
$( .01 )
$( .01 )
The accompanying notes are an integral part of these financial statements.
F-3
#
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Month Periods Ended November 30, 2001 and 2000
2001
2000
Cash Flows From Operations:
Net loss
$(181,548)
$(147,132)
Adjustments to reconcile net loss to net cash
consumed by operating activities:
Depreciation and amortization
3,142
2,968
Loss on sales of furniture
3,259
-
Changes in current assets and liabilities:
Increase in payroll and sales taxes payable
22,177
4,913
Decrease (increase) in accounts receivable
8,515
(14,394)
Decrease (increase) in security deposits
4,994
(5,210)
Increase in accounts payable and
accrued liabilities
138,479
23,667
Increase in liability for security deposit
(1,800)
10,000
Decrease in inventory
1,461
4,909
Increase in prepaid expense
-
(50)
Net cash consumed by operating
activities
(1,321)
(120,329)
Cash Flows From Investing Activities:
Purchase of furniture and equipment
-
(10,022)
Proceeds of sales of furniture
1,200
-
Fees paid to arrange debt financing
-
(10,000)
Net cash provided (consumed) by
investing activities
1,200
(20,022)
Cash Flows From Financing Activities:
Proceeds of sales of capital stock
-
37,500
Proceeds of borrowing
14,153
143,775
Repayments of debt
(21,053)
(18,522)
Increase (decrease) in stockholder advances
4,600
(10,000)
Net cash provided (consumed) by
financing activities
(2,300)
152,753
Net increase (decrease) in cash
(2,421)
12,402
Cash balance, beginning of period
3,811
(5,825)
Cash balance, end of period
$ 1,390
$ 6,577
The accompanying notes are an integral part of these financial statements.
F-4
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
November 30, 2001
(Unaudited)
1.
BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of American International Ventures, Inc. and its subsidiary (“the Company”) as of November 30, 2001 and for the three and six month periods ended November 30, 2001 and 2000, have been prepared in accordance with generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the six months ended November 30, 2001 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2002.
Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2001.
F-5
Item 2.
Management's Discussion and Analysis or Plan of Operations
Overview
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In March 2001, the Company acquired all the issued and outstanding capital stock of TLM Industries, Inc. (“TLM”). TLM thereafter merged with its wholly owned subsidiary, GetToner.com, Inc. ("GetToner"), pursuant to which GetToner was the surviving entity. For the period represented by this filing, GetToner is a wholly owned subsidiary of the Company, and is engaged in the business of selling office supply products, principally disposable imaging products such as laser toner, inkjet, and fax ribbon cartridges for computer printers, fax machines and copiers.
Prior to the transaction with TLM and GetToner, the Company’s operations were limited to providing limited consulting services to mining companies. These services included, the review of existing, and introduction of new, assay processes, and the introduction of technical personnel and sources of investment capital. During 1999, the Company provided consulting services to Birch Mountain Resources Ltd., a company trading on the Canadian Venture Exchange (symbol: BMD.V) under an arms length agreement. The Company introduced technical consultants to Birch Mountain that advanced certain mining assay procedures employed by Birch Mountain. In exchange for providing services to Birch Mountain, the Company may be entitled to receive a total of 500,000 shares of common stock of Birch Mountain, of which 350,000 shares have been received to date by the Company. The remaining 150,000 shares will be issued to the Company contingent upon Birch Mountain developing a proprietary assay procedure that meets certain established standards. At this time, the Company is uncertain as to whether it will receive the remaining 150,000 shares of Birch Mountain common stock. The Company may explore the possibility of providing similar consulting services to other mining companies in the future, although it has no present arrangement with any other mining company. The Company expects that it will be able to provide such services based upon the contacts and limited expertise of the Company’s Chairman and President. The Company, however, in the performance of these services may be required to augment its expertise by retaining consultants from time to time in the mining industry. The Company believes that these consultants are readily available in the industry at reasonable rates.
Six month period ended November 30, 2001 compared with six month period ended November 30, 2000.
----------------------------------------------------------------------
Revenues for six month period ended November 30, 2001 were $185,877 which represents a decrease of $10,825 or 5.5% from revenues of $196,702 for the comparable period in 2000. The revenues for both period relate to sales of GetToner products. The decrease was due to a slight shift in product mix and market emphasis. Prior to 2001, a significant portion of sales was directed to wholesalers purchasing register tapes, which produced higher revenues per sale but carried lower profit margins. During parts of 2001, GetToner began to shift its sales emphasis to retail customers purchasing inkjet and laser toner cartridges through the Internet and other sales channels, which produced smaller revenues per sale but carry higher profit margins.
Cost of goods sold for the 2001 period totaled $119,807 or 64.5% of total revenue contrasted with $128,922 or 65.5% of total revenue for the 2000 period. Gross profit for the 2001 period was $66,070 compared with $67,780 for the 2000 period.
Selling and administrative expenses which consists of marketing expenses, salaries, rent, and other general and administrative expenses were $236,396 for the 2001 period contrasted with $216,649 for the prior period. The increase of $31,780 or 14.7% from the prior period is due principally to increased salaries and related expenses paid to GetToner’s two officers during 2001 compared with the prior period. The amount for the 2001 period also reflects higher advertising and marketing costs for GetToner, costs for one technical employee hired during 2001 by GetToner, and increased rent for GetToner’s larger offices occupied in during the second quarter of 2000.
Operating loss for the 2001 period was $170,326 compared with an operating loss of $148,869 for the prior period. The increase in operating loss of $21,457 or 14.4% from the prior period is due to the higher selling and administrative expenses as discussed above. No research and development costs were incurred during the 2001 or 2000 periods, and there is no seasonal impact on the Company's sales.
Rental income was $6,750 for the 2001 period compared with $5,400 for the prior period. The rental income relates to part of GetToner’s office space which was subleased to a third party during the second quarter of 2000. Interest expense on long and short term debt totaled $14,713 contrasted with $3,663 for the prior period. The increase of $11,050 or 302% is due to principally to an increase in credit card debt which was incurred during the period to support the operations of GetToner. In addition during the 2001 period, GetToner sold furniture at a loss in the amount of $3,259.
The net loss for the 2001 period was $181,548 compared with $147,132 for the prior period. The increase in net loss of $34,416 or 23.4% for the 2002 period is due to reasons discussed above.
Liquidity And Capital Resources.
As of November 30, 2001, the Company's working capital deficit was $516,853 compared with a working capital deficit of $338,592 for the prior period. The increase in deficit for 2001 reflects the operational losses sustained by GetToner during this period.
During fiscal year 1999 and continuing through February 2001, prior to the acquisition of TLM and GetToner, the Company's capital requirements have been insignificant due to its relatively limited operations. During this period its capital requirements have been funded principally through the private placement of its common stock and from loans from the Company's President and Chairman. During fiscal 2001 and in connection with the acquisition of GetToner, the Company raised $153,500 from the private placement of 1,800,000 shares of common stock at prices ranging from $0.06 to $0.10 per unit. Of the shares sold, 650,000 were sold as units, each of which included a warrant entitling the holder to purchase an additional share at anytime during the ensuing year at a price of $1 per share. The proceeds were used to fund the operation of GetToner. In February 2001, the Company and its Chairman and President each agreed to certain compensation arrangements for the one-year period ending May 31, 2001. In consideration for acting as chairman and president of the Company for such period, the Company issued 300,000 shares of common stock of each such officer. In addition, during February 2001, the Company issued 200,000 shares of common stock in exchange for cancellation of a loan in the amount of $19,035 in favor of the Company’s Chairman and issued 200,000 shares of common stock in exchange for cancellation of a loan in the amount of $18,129 in favor of the Company's President.
GetToner has experienced significant losses. GetToner is uncertain as to when it will achieve profitable operations. The Company’s financial statements contain note disclosures describing the circumstances that lead to doubt over the ability of GetToner to continue as a going concern. In his report on the consolidated financial statements for the year ended May 31, 2001, the Company’s independent auditor included an explanatory paragraph regarding its ability to continue as going concern.
Forward Looking Statements. Certain of the statements contained in this Quarterly Report on Form 10-QSB include "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). See the Company's Annual Report on Form 10-KSB for the period ending May 31, 2001 (“Form 10-KSB”) for additional statements concerning operations and future capital requirements. Certain risks exist with respect to the Company and its business, which risks include: its limited assets, absence of significant operating revenue, and the need for additional capital; lack of established marketing strategy; sale of compatible and remanufactured products; and competition; among other factors. Readers are urged to refer to the section entitled “Cautionary Statements” in the Company’s Form 10-KSB for a broader discussion of such risks and uncertainties.
Item 3. CONTROLS AND PROCEDURES.
(a)
The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the chief executive officer and the principal financial officer of the Company concluded that the Company's disclosure controls and procedures were adequate.
(b)
Changes in internal controls. The Company made no significant changes in its internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and principal financial officer.
PART II
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
99.1
Certification under Section 906 of the Sarbanes-Oxley Act
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: June 16, 2003
AMERICAN INTERNATIONAL VENTURES, INC.
/s/ Jack Wagenti
Jack Wagenti
Principal Financial Officer and
Principal Executive Officer
CERTIFICATION
I, Jack Wagenti, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of American International Ventures, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. I am the registrant's sole certifying officer and am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: June 16, 2003
/s/ Jack Wagenti
Jack Wagenti
Principal Financial Officer
And Principal Executive Officer