UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended November 30, 2006
Commission File Number 0-30368
American International Ventures, Inc.
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(Name of Small Business Issuer in its charter)
Delaware 22-3489463
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(State or other jurisdiction of (I.R.S. Employer Identification no.)
incorporation or organization)
4058 Histead Way, Evergreen, Colorado 80439
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(Address of principal executive offices)
303-670-7378
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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: [X] No: [ ] (2) Yes: [X] No: [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Yes: [ ] No: [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of January 3, 2007 is 19,345,044 shares of Common Stock, $.00001 par value.
Transitional Small Business Issuer Format (Check One): Yes: No: [X]
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Page Number
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
- Balance Sheets at November 30, 2006 (unaudited)
and May 31, 2006 (audited)
3
- Statements of Operations and Deficit Accumulated During Exploration
Stage for the three month periods ended November 30, 2006 and
November 30, 2005 and from June 1, 2003 to November 30, 2006
4
- Statements of Operations and Deficit Accumulated During Exploration
Stage for the three month periods ended November 30, 2006 and
November 30, 2005, and from June 1, 2003 to November 30, 2006
5
- Statements of Cash Flows for the three month periods
ended November 30, 2006 and November 30, 2005, and
from June 1, 2003 to August 31, 2006
6
-Notes to Financial Statements
7
Item 2. Management's Discussion and Analysis or Plan of Operations
8
Item 3. Effectiveness of the registrant’s disclosure controls and procedures
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
9
Item 2. Changes in Securities
9
Item 3. Defaults upon Senior Securities
10
Item 4. Submission of Matters to Vote of Security Holders.
10
Item 5. Other Information.
10
Item 6. Exhibits and Reports on Form 8-K.
10
Signatures
11
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AMERICAN INTERNATIONAL VENTURES, INC.
(An Exploration Stage Company)
BALANCE SHEET
November 30, 2006
May 31, 2006
(Unaudited)
(Audited)
ASSETS
Current Assets
Cash
$ 70,409
$ 88,539
Prepaid expense
150
150
Total current assets
70,559
88,689
Fixed Assets
Office furniture and equipment
11,567
11,567
Less, accumulated depreciation
11,567
11,567
Net fixed assets
-
-
Other Assets
Restricted cash
-
25,667
Mining rights
8,670
8,670
Total other assets
8,670
34,337
TOTAL ASSETS
$ 79,229
$ 123,026
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses
$ 17,500
$ 39,028
Total current liabilities
17,500
39,028
Stockholders’ Deficit
Common stock – authorized, 50,000,000
shares of $.00001 par value; issued and
outstanding, 19,345,044 and 20,145,044
shares, respectively
193
201
Capital in excess of par value
1,206,300
1,206,292
Additional paid in capital – options
52,227
48,748
Additional paid in capital – warrants
110,315
110,315
Deficit accumulated during exploration stage
(568,322)
(542,574)
Deficit prior to exploration stage
(738,984)
(738,984)
Total stockholders’ deficit
61,729
83,998
TOTAL LIABILITIES AND
STOCKHOLDERS’ DEFICIT
$ 79,229
$ 123,026
The accompanying notes are an integral part of these financial statements.
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AMERICAN INTERNATIONAL VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING EXPLORATION STAGE
For the Six Month Periods Ended November 30,
(Unaudited)
June 1, 2003
(Date of Inception of
Exploration Stage)
2006
2005 To November 30, 2006
Royalty revenue
$ 25,000
$ 15,000
$ 40,000
Administrative Expenses
51,723
99,133 671,963
Operating Loss
(26,723)
(84,133)
(631,963)
Other Income and Expense:
Profit on sales of securities
-
-
59,965
Interest expense
-
-
(206)
Interest income
975
507
3,882
Loss Accumulated During Exploration Stage
$ (25,748)
$ (83,626)
$(568,322)
Loss Per Share – Basic and Diluted
$ -
$ -
Weighted Average Number of Shares Outstanding
19,720,964
20,595,663
Included within Administrative Expenses are the following amounts:
2006
2005
Consulting fees
$ 23,110
$ 6,009
Professional fees
16,588
81,139
Drilling expense
-
6,217
Options expense
3,479
1,000
Geology fees
-
-
Licenses and permits
4,542
-
Other expenses
4,004
4,768
$ 51,723
$ 99,133
The accompanying notes are an integral part of these financial statements.
AMERICAN INTERNATIONAL VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING EXPLORATION STAGE
For the Three Month Periods Ended November 30,
(Unaudited)
June 1, 2003
(Date of Inception of
Exploration Stage)
2006
2005 To November 30, 2006
Royalty revenue
$ 25,000
$ 15,000
$ 40,000
Administrative Expenses
29,127
74,030 671,963
Operating Loss
(4,127)
(59,030)
(631,963)
Other Income and Expense:
Profit on sales of securities
-
-
59,965
Interest expense
-
-
(206)
Interest income
420
382
3,882
Loss Accumulated During Exploration Stage
$ (3,707)
$ (58,648)
$(568,322)
Loss Per Share – Basic and Diluted
$ -
$ -
Weighted Average Number of Shares Outstanding
19,345,044
21,302,803
Included within Administrative Expenses are the following amounts:
2006
2005
Consulting fees
$ 23,110
$ 1,640
Professional fees
4,623
63,613
Options expense
229
-
Geology fees
-
6,217
Licenses and permits
457
-
Other expenses
708
2,560
$ 29,127
$ 74,030
The accompanying notes are an integral part of these financial statements.
AMERICAN INTERNATIONAL VENTURES, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
For the Six Month Periods Ended November 30,
(Unaudited)
June 1, 2003
(Date of Inception of
Exploration Stage)
2006
2005 To November 30, 2006
Cash Flows From Operations:
Net loss from operations
$ (25,748)
$ (83,626)
$(568,322)
Adjustments to reconcile net loss to net
cash consumed by operating activities:
Depreciation and amortization
-
-
2,714
Value of capital stock issued for services
-
-
59,925
Value of options issued for services
3,479
1,000
52,227
Changes in current assets and liabilities:
(Decrease) increase in accounts payable
and accrued liabilities
(21,528)
(20,496)
17,307
Net cash consumed by operating
activities
(43,797)
(103,122)
(436,149)
Cash Flows From Investing Activities:
Deposit to secure letter of credit
-
-
(25,667)
Release of deposit to secure letter of credit
25,667
-
25,667
Investment in mineral rights
-
-
(5,397)
Net cash consumed by investing
activities
-
-
(5,397)
Cash Flows From Financing Activities:
Proceeds of common stock issuances
-
200,000
426,630
Decrease in stockholder advances
-
-
(143)
Net cash provided by financing activities
-
200,000
426,487
Net (decrease) increase in cash
(18,130)
96,878
(15,059)
Cash balance, beginning of period
88,539
63,499
85,468
Cash balance, end of period
$ 70,409
$ 160,377
$ 70,409
The accompanying notes are an integral part of these financial statements.
AMERICAN INTERNATIONAL VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2006
(Unaudited)
1.
BASIS OF PRESENTATION
The unaudited interim financial statements of American International Ventures, Inc. (“the Company”) as of November 30, 2006 and for the three and six month periods ended November 30, 2006 and 2005 have been prepared in accordance with U.S. 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 of such periods. The results of operations for the three month and six month periods ended November 30, 2006 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2007.
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, 2006.
2.
SUPPLEMENTAL CASH FLOWS INFORMATION
There were no cash payments during the periods for either interest or income taxes.
During the six month period ended November 30, 2006, 800,000 shares of stock were returned for cancellation pursuant to a settlement agreement involving two former officers and directors.
3.
RESTRICTED CASH
The Company was party to a lawsuit with two former officers and directors. The suit was brought in a Nevada court which required a $25,000 letter of credit to secure the outcome of the suit. That letter of credit was secured by one of the Company’s money market accounts. A settlement has been reached and was approved by the Company’s Board of Directors. Upon submission of the appropriate court documents, the funds were released and returned to the Company.
4.
SUBSEQUENT EVENT
Effective December 31, 2006, the Company elected to terminate the option agreement for the Sage Creek property located in Lemhi County, Idaho.
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Item 2. Management's Discussion and Analysis or Plan of Operations.
Forward Looking Statements and Cautionary Statements.
Certain of the statements contained in this Quarterly Report on Form 10-QSB includes "forward looking statements". All statements other than statements of historical facts included in this Form 10-QSB regarding the Company's financial position, business strategy, and plans and objectives of management for future operations and capital expenditures, and other matters, are forward looking statements. These forward-looking statements are based upon management's expectations of future events. Although the Company believes the expectations reflected in such forward looking statements are reasonable, there can be no assurances that such expectations will prove to be correct. Additional statements concerning important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") are disclosed in the Cautionary Statements section and elsewhere in the Company’s Form 10-KSB for the period ended May 31, 2006. Readers are urged to refer to the section entitled “Cautionary Statements” and elsewhere in the Company’s Form 10-KSB for a broader discussion of these statements, risks, and uncertainties. These risks include the Company’s limited operations and lack of revenues. All written and oral forward looking statements attributable to the Company or persons acting on the Company’s behalf subsequent to the date of this Form 10-QSB are expressly qualified in their entirety by the referenced Cautionary Statements.
General.
The Company is an exploration stage company engaged in the acquisition, exploration, and development of mineral properties. The Company has acquired patented and unpatented mining claims located in Nye County, Nevada, known as the “Bruner” property. In addition, in December 2004, the Company entered into an option agreement to acquire 10 unpatented mining claims in Lemhi County, Idaho comprising approximately 200 acres, known as the “Sage Creek” property. Effective December 31, 2006, the Company elected to terminate the option agreement for the Sage Creek property.
The Company, independently and through joint venture partners, intends to carry out a geological study and exploration work on its existing Bruner property in order to ascertain whether the property possess commercially exploitable quantities of gold and silver. As described in greater detail below, on September 23, 2005, the Company completed an Exploration and Option to Enter Joint Venture Agreement with Electrum Resources LLC regarding the Company’s Bruner property. Please refer to the Company’s Annual Report on Form 10-KSB for the period ending May 31, 2006 for a broader description of the Company’s business, and it’s past and proposed operations on its mining claims
Transaction with Electrum Resources, LLC.
As previously disclosed by the Company, on September 23, 2005, the Company completed an Exploration and Option to Enter Joint Venture Agreement (“Agreement”) with Electrum Resources LLC, a Cayman Islands limited liability company (“Electrum”). The Agreement relates to the Company’s Bruner mining claims. Subject to certain conditions therein, Electrum has agreed to incur annual expenditures in respect of the Bruner property in the amount of $250,000, $500,000, and $2,250,000 in the first, second and third years following the date of the Agreement, respectively (“Expenditure Obligations”).
In consideration of Electrum’s performance of its Expenditure Obligations, AIVN granted to Electrum the option and right to earn and vest an undivided 65% interest in the Bruner mining claims, and to form a joint venture (“Joint Venture”) for purposes of the management and ownership of the Bruner mining claims. The Joint Venture will be governed by a definitive mining venture agreement, the form of which has been agreed to by the parties (“Operating Agreement”). Electrum will be the initial manager of the Joint Venture and will have control of the activities and operations of the Joint Venture. Electrum can earn an additional 10% in the Joint Venture by successfully completing, at its expense, a positive bankable feasibility study. The study must be commenced within five years from completion of its Expenditure Obligations, and be completed within five years from commencement. The bankable feasibility study is a document prepared by independent professionals stating all of the technical, engineering and financial aspects of the project in sufficient detail whereby a bank or other lending institutions, in conjunction with their own investigations, can determine whether or not they will finance the mining project. If Electrum funds the Company’s share of future development costs of the Bruner property, Electrum will earn an additional 5% in the property. Electrum paid the Company the sum of $15,000 at closing, and agreed to pay the Company the sum of $25,000 on each anniversary of the effective date of the Agreement until it has completed its Expenditure Obligations. The term of the Agreement is five years. If Electrum fails to timely incur or pay its Expenditure Obligations, timely commence and complete the stated feasibility study, or otherwise terminates the Agreement, it will forfeit its rights and interests in and to the Bruner property and Joint Venture.
Prior to the Agreement, the Company owned 28 patented claims totaling 560 acres and 41 unpatented claims totaling 820 acres for an initial land position of 1,380 acres located in the heart of the Bruner mining district. These claims are subject to a 2% net smelter return in favor of the prior owner. Electrum has staked in the Company’s name but subject to the Agreement, 67 additional unpatented mining claims totaling approximately 1340 additional acres. Electrum will be responsible for the cost of maintaining the unpatented mining claims in good standing.
In late May 2006, Cougar Gold, LLC, a subsidiary of Electrum, commenced an exploratory drilling program on the Bruner property. To date, nine core holes have been completed and the assays been received. Although there were several short intervals of relatively low grade gold mineralization recorded, there were no zones of the high grade mineralization that were the target of the drilling program. The targets for these holes were various intersections of the northwesterly major faults and the northeasterly splay faults. Cougar has advised the Company that although they were disappointed by these results, they plan to continue the project, by further evaluating the Bruner geology to identify new targets and by conducting a comprehensive calculation of the shallow resource that has been identified by earlier explorers, which includes data obtained from the Company’s drill holes during 2004 and discussed above. Cougar recently has advised the Company that the geological analysis of the results of the first drilling program indicate that the intended target may be deeper than previously believed and that Cougar intends to continue drilling the project. The rock textures, alteration, mineral zoning and geochemistry found in the core indicate that the current intercepts were above the projected mineral targets. These same studies indicate that the interpreted mineral targets may lie some 300 to 500 feet below the previous drilling. Cougar plans to drill at least three or four additional, deep core holes on the project, for a total footage of approximately 4,500 feet. Cougar has indicated that they plan to initiate the second phase of drilling as soon as a suitable drill rig is located and the necessary permits are in place. On January 3, 2007, the Company filed a Report of Form 8-K with the Securities and Exchange Commission which addressed the continuation of the Bruner drilling operations.
Plan of Operations.
The Company is an exploration stage company engaged in the acquisition, exploration, and development of mineral properties. The Company has acquired mining claims located in Nye County, Nevada, known as the “Bruner” claims. Effective December 31, 2006, the Company terminated its interest in certain mining claims located in Lemhi County, Idaho known as the “Sage Creek” property. The Company’s plan of operations for the next 12 months will be determined by the results of the additional drilling to be conducted on the Bruner claims by the Company’s joint venture partner. If the results of such drilling operations prove unsuccessful, the Company may be required to seek other business opportunities to review and analyze for purposes of effecting a business acquisition or combination.
The Company’s projected expenditures for the next 12 months is approximately $80,000 as described below. The Company has budgeted $50,000 for due diligence and acquisition for new mining properties. It also has budgeted $30,000 for corporate overhead that includes payment of consulting fees, legal, accounting, and miscellaneous expenditures.
As of November 30, 2006, the Company has available working capital of $53,059. Therefore, the Company will be required to finance its plan of operations through the private placement of its capital stock or through debt financing. If the Company is able to raise part but not all of its projected working capital needs, it intends to prioritize available capital. The Company will pay its overhead requirements on an “as needed” basis. Available capital remaining will be allocated towards to identification and exploration of other mining claims. At this time, the Company has no commitments for any such financing. No assurances can be given that the Company will be successful in these endeavors. If the Company is unsuccessful in these endeavors, it will have a material adverse impact on the Company and its ability to conduct its business in the future.
Item 3. Controls and Procedures.
(a) Under the supervision and with the participation of management, including the Company’s President and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of November 30, 2006. Based on this evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission ("SEC") reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms relating to our reporting obligations, and was made known to them by others within the company, particularly during the period when this report was being prepared.
(b) There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the Company’s fiscal quarter ending November 30, 2006 that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting.
PART II
Item 1. Legal Proceedings.
None
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
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
Furnish the Exhibits required by Item 601 of Regulation S-B.
Exhibit 31 – Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002.
Exhibit 32 – Certification Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: January 12, 2007
AMERICAN INTERNATIONAL VENTURES, INC.
/s/ Myron Goldstein
Myron Goldstein
Chief Financial Officer
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