UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended May 31, 2001
Commission File Number 0-30368
American International Ventures, Inc.
Delaware 22-3489463
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
260 Garibaldi Avenue, Lodi, New Jersey 07644
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(Address of principal executive offices)
(973) 335-4400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.00001 par value
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.
X Yes No
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The registrant's revenues for its most recent fiscal year were: $377,745
The number of shares outstanding of the registrant's class of common stock
on May 31, 2001 was 14,445,544 shares.
Disclosure Regarding Forward Looking Statements and Cautionary Statements.
--------------------------------------------------------------------------------
Forward Looking Statements.
Certain of the statements contained in this Annual Report on Form 10-KSB
includes "forward looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). All statements
other than statements of historical facts included in this Form 10-KSB 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 may be deemed "forward looking
statements" within the meaning of the Securities Exchange Act of 1934. 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 the Company's
expectations ("Cautionary Statements") are disclosed below in the Cautionary
Statements section and elsewhere in this Form 10-KSB. All written and oral
forward looking statements attributable to the Company or persons acting on
behalf of the Company subsequent to the date of this Form 10-KSB are expressly
qualified in their entirety by the Cautionary Statements.
Cautionary Statements.
Certain risks and uncertainties are inherent in the Company's business. In
addition to other information contained in this Form 10-KSB, the following
Cautionary Statements should be considered when evaluating the forward-looking
statements contained in this Form 10-KSB:
LIMITED ASSETS; ABSENCE OF SIGNIFICANT OPERATING REVENUES, AND NEED FOR
ADDITIONAL CAPITAL.
As of May 31, 2001, the Company audited financial statements reflect total
assets of $49, 152, total current liabilities of $422,364, and a working capital
deficit of $338,592. In addition, the financial statements for fiscal year ended
May 31, 2001 reflect that the Company recorded $377,745 in revenues and loss
from operations of $433,802.
The business of GetToner presently in not profitable. The Company will
require additional capital immediately and long term to meet the ongoing
operating requirements of GetToner. The immediate need includes funds payroll
and overhead, as well as funds to expand it marketing plan. The Company intends
on raising the capital through a private financing of debt or equity, or the
sale of its assets. Presently, the Company has no commitment for any such
funding. No assurances can be given that the Company will be successful in
obtaining such financing on terms acceptable to the Company or on any terms. The
Company's inability to obtain such financing could have a material adverse
affect on the Company.
2
IMMEDIATE AND FUTURE MARKETING STRATEGY. The success of GetToner, in
addition to other factors, will be dependent upon a successful product marketing
strategy. This strategy includes print and internet media advertising (See
"Business of GetToner-Sales and Marketing"). Although GetToner believes its
marketing strategy will result in increased sales, this strategy is relatively
untested, and, no assurances can be given that this marketing strategy will
prove successful. Moreover, in addition to its immediate marketing strategy, the
Company will be required to dedicate significant resources for future marketing
efforts of GetToner. If the Company is unsuccessful in these marketing efforts,
it will have a material adverse impact upon the Company.
SALE OF COMPATIBLE AND REMANUFACTURED PRODUCTS. GetToner's core business is
and will continue to be the sale of compatible and remanufactured inkjet and
laser toner cartridges. These cartridges are an alternative to original
equipment manufactured (OEM) products. The business of selling non-OEM products
is subject to certain risks. OEMs have attempted to protect their businesses by
continually altering their products and/or improving the quality and
sophistication of its products, and by taking an aggressive position in the
defense of their patents, copyrights, and trademarks. In the event OEMs are able
to successfully protect their businesses in the future through one or more
business strategies so as to limit or reduce the use of non-OEM products, such
event or events will have a material adverse impact upon the business of the
Company.
RELIANCE UPON DISTRIBUTORS/VENDORS. GetToner presently purchases and will
purchase in the future products from a number of distributors or vendors. In the
event its relationship with one or more distributors or vendors is terminated
for any reason, such event may have a material adverse impact upon the business
of GetToner.
COMPETITION. GetToner faces competition from, major retailers such as
Staples, Office Max and Office Depot, from other independent office supply
stores, and from other e-tailers of office supplies. Many of these companies
have greater resources, including financial, marketing and purchasing, than
GetToner. These major retailers sell products through their retail outlets and
through their websites. It is conceivable that one or more of these major
retailers could engage in a loss leader or deep discounted policy for products
similar to GetToner's core products. In addition, GetToner also may face
increased competition from the growth of other e-tailers that have a business
model identical or similar to that of GetToner. Finally, it is likely that if
GetToner business develops, for which no assurances can be given, it will face
increased competition from both existing and new sources. The occurrence of one
or more of the competitive events could have an adverse impact upon GetToner and
its business.
3
LACK OF PROPRIETARY PROTECTION. Although management has developed
GetToner's business, which includes certain marketing and pricing strategies,
the business model itself is not subject to any proprietary protection by law or
otherwise. Consequently, it is conceivable that GetToner's business model could
be replicated or otherwise developed by third parties. The occurrence of such
event would result in a loss of the competitive advantages of GetToner and could
cause a material adverse impact upon GetToner and its business. In addition, due
to the non-proprietary nature of its business, the valuation of the Company's
business in both the private and public markets could be lessened.
MANAGEMENT AND DEPENDENCE ON MANAGEMENT. The ability of the Company to
conduct its business affairs in a successful fashion will be subject to the
capabilities and business acumen of current management. Accordingly, no person
should purchase the Company's common stock unless such person is willing to
entrust all aspects of the business affairs of the Company to its current
management.
PENNY STOCK REGULATION. The Company's common stock may be deemed a "penny
stock" under federal securities laws. The Securities and Exchange Commission has
adopted regulations that define a "penny stock" generally to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These regulations impose additional sales practice
requirements on any broker/dealer who sell such securities to other than
established investors and accredited investors. For transactions covered by this
rule, the broker/dealer must make certain suitability determinations and must
receive the purchaser's written consent prior to purchase. Additionally, any
transaction may require the delivery prior to sale of a disclosure schedule
prescribed by the Commission. Disclosure also is required to be made of
commissions payable to the broker/dealer and the registered representative, as
well as current quotations for the securities. Finally, monthly statements are
required to be sent disclosing recent price information for the penny stock held
in the account of the customers and information on the limited market in penny
stocks. These requirements generally are considered restrictive to the purchase
of such stocks, and may limit the market liquidity for such securities.
Item 1. Description of Business
GENERAL.
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American International Ventures, Inc., (the "Company") was originally
organized as Lucky Seven Gas and Minerals, Inc., under the laws of the State of
Pennsylvania on July 16, 1984. The name was changed to Lucky Seven Gold Mines,
Inc. June 24, 1996. American Precious Metals, Inc was formed January 13, 1998
under the laws of the State of Delaware. On March 16,1998 Lucky Seven Gold
Mines, Inc. merged into American Precious Metals, Inc., the surviving
corporation. The name was changed to American Global Enterprises, Inc. on
November 13, 2000 and changed again on December 21, 2000 to American
International Ventures, Inc.
4
In March 2001, the Company acquired all the issued and outstanding capital
stock of TLM Industries, Inc. TLM thereafter merged with its wholly owned
subsidiary, GetToner.com, Inc. ("GetToner"), pursuant to which GetToner was the
surviving entity. GetToner.com, Inc. ("GetToner") was organized under the laws
of the State of New Jersey on May 24, 2000. TLM Industries, Inc. ("TLM") was
organized under the laws of the State of New Jersey on June 6, 2000. On June 2,
2000, GetToner acquired TLM Industries, LLC, a predecessor company that was
formed under the laws of the State of New Jersey on September 5, 1997. On June
6, 2000, TLM acquired all of the issued and outstanding shares of GetToner.
GetToner is currently a wholly owned subsidiary of the Company. GetToner 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 certain 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. In this regard, during 1999, the Company introduced technical
consultants to Birch Mountain that advanced certain mining assay procedures
employed by Birch Mountain. In June 1999, the Company entered into a Finder's
Fee Agreement with Birch Mountain Resources Ltd to evidence these services.
Pursuant to the agreement, the Company may be entitled to receive a total of
500,000 shares of common stock of Birch Mountain, of which 350,000 shares to
date has been received 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. No assurances can be
given that the remaining 150,000 shares of common stock of Birch Mountain will
be issued to the Company.
Apart from the operations of its subsidiary, GetToner, the Company may
explore the possibility of providing consulting services to other mining
companies in the future similar to the services provided to Birch Mountain. At
this time, however, the Company has no arrangement with any other mining
company.
The Company's offices are located at 260 Garibaldi Avenue, Lodi, New Jersey
07644, and its phone number is (973) 335-4400. The offices of GetToner are
located at 3-5 Vose Avenue, South Orange, New Jersey 07079, and its telephone
number is (800) 933-8211, and web site is www.gettoner.com.
5
BUSINESS OF GETTONER.
-----------------------------------
General.
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GetToner sells office supply products, principally disposable imaging
products such as laser toner, inkjet, and fax ribbon cartridges for computer
printers, fax machines and copiers. GetToner's products generally are sold at
discounted prices to major office supply retailers. GetToner targets
home-officer users, small to medium sized businesses, and large associations or
user groups. GetToner sells its products through e-commerce at its gettoner.com
web-site, through direct sales to wholesale office suppliers, and through
specially designed marketing programs for large user groups such as school
systems and charitable organizations. GetToner's targeted markets are home and
home office computer users, small and medium sized business, and user groups or
associations that have broad memberships or affiliations. GetToner core business
is the wholesale and retail sale of new (from the original equipment
manufacturer or "OEM"), remanufactured, and compatible inkjet and laser toner
cartridges for printers, fax machines and copiers. Manufacturers of these
products include Apple, Brother, Canon, Epson, Hewlett-Packard, IBM/Lexmark, and
Xerox, among other brands. Compatible cartridges are new inkjet cartridges
manufactured to similar, albeit not identical, specifications of the OEM model
and are priced approximately 60-70% less than the OEM model sold by the major
retailers. Remanufactured cartridges are recycled inkjet and laser cartridges
that have been cleaned, filled, and tested to work as an original and are priced
approximately 40-50% less than similar models sold by the major retailers. New
OEM cartridges are produced by the original equipment manufacturer. New OEM
inkjet cartridges are priced competitive with similar models sold by major
retailers, while new OEM laser cartridges are priced approximately 10-15% less
than, the similar model sold by the major retailers. To date, a significant
portion of GetToner's revenues (approximately 60%) has been the result of sales
of compatible inkjet and remanufactured laser toner cartridges. GetToner's
business strategy is to market and promote its compatible and remanufactured
products as an attractive alternative to the OEM and remanufactured products
sold by the major retailers. GetToner believes its discount pricing, its free
delivery, its incentive based purchasing programs, and the ecological
considerations of recycled or re-manufactured products provide strong purchasing
incentives for consumers. Although the market for GetToner's current products
are limited by comparison to the entire industry, nonetheless management
believes this market is significant.
GetToner retails other office supply products such as fax ribbon
cartridges, photo-grade inkjet paper and transparencies, address labels, and CD
ROMs and diskettes. Additional products may be added to GetToner's product line
in the future as determined by management. Factors influencing the addition of
products include the ability to establish direct relationships with vendors,
product margins, and shipping costs, among other considerations.
6
GetToner's retail customers nationwide can place orders by telephone or
through GetToner's website. Orders received by GetToner are generally packaged
and shipped the same day and are subject to a standard $3.00 handling fee.
Standard shipping is free of charge and generally orders are received within one
to three business days. Overnight delivery is available for a fee. Retail orders
are billed to a customer's credit card, while wholesale orders are billed 30
days net.
Product Pricing.
------------------
GetToner has limited it product line to items that can be sold at a
discount to the OEM products sold by major retailers such as Staples, Office
Max, and Office Depot. GetToner generally sells its remanufactured and
compatible cartridges at discounts ranging from 40% to 70% of OEM prices charged
by these retailers. New OEM inkjet cartridges generally are competitive with
retail pricing, while new OEM laser cartridges and other imaging products
generally are 10-15% less than the major retailers. Pricing on compatible fax
ribbons, inkjet paper and transparencies, address labels, and CD ROMs and
diskettes generally is 50% less than OEM prices charged by major retailers.
GetToner's average retail order ranges from $60 to $100.
Sales and Marketing.
------------------------
GetToner sells its products through a variety of sales channels. These
channels include sales through the Internet, including through its
www.gettoner.com web-site, sales through its specially designed donor-affiliate
and school system marketing programs, and sales to wholesale office suppliers.
In addition, GetToner maintains a website www.GetOfficeNeeds.com, that contains
a 25,000 item catalogue of office supply products. At this time, GetToner is
presently evaluating whether it will actively promote the catalogue website.
GetToner strives to achieve a high ranking in popular search engines in an
effort to drive Internet sales. It also advertises in a national "thrifty"
newspaper published weekly that promotes its Internet site. It may expand its
advertising program to include, radio promotions, advertisements in the student
newspapers of approximately 25 major universities in the United States, and
selective B2B email campaign. Its current and future advertising program is
designed to direct prospective customers to GetToner's Internet site or to its
toll free number for ordering purposes.
7
GetToner's donor-affiliate program is designed to attract the purchasing
power of non-profit organizations with large memberships, generally in excess of
500. GetToner provides cash rebate incentives to these organizations on member
purchases. The cash rebate ranges from 2-10% of the purchase price on all items
purchased from GetToner. GetToner assists each organization in the preparation
and distribution of promotion materials designed to encourage its members to
purchase their imaging needs from GetToner. Depending on the organization,
GetToner may link its website to the home page of the organization to facilitate
purchases. GetToner initiated its donor program in January 2000, and presently
has organizations with in excess of 40,000 member participants in its donor
program, which includes the Muscular Dystrophy Association, North Jersey chapter
of the Cystic Fibrosis Foundation, National Association of Independent
Appraisers, United Way of Ulster County, New York, Community Research Initiative
on AIDS and Re/Max of New Jersey. Each of the organizations are in various
phases of implementing GetToner's program, however, as of this date, product
sales through such organizations have been limited. GetToner's school system
program consists of product marketing to municipalities for their elementary and
high school systems. The initial concentration will be select municipalities
located initially in New Jersey, New York and Pennsylvania. In order to
effectively promote its donor-affiliate and school system programs, the GetToner
will be required to hire an additional marketing person, which will subject to
available capital.
Competition.
---------------
GetToner operates in a highly competitive environment. Its markets are
presently served primarily by traditional, independent office products
suppliers, by superstores such as Staples, Office Max, and Office Depot, and by
other e-tailers of office supply products. Substantially all of these companies
have greater resources including financial, marketing and purchasing, than
GetToner. GetToner attempts to compete in these markets by offering compatible
or remanufactured products at a deep price discount to similar OEM products
offered by these superstores. GetToner may face increased competition in the
future from these larger retailers to the extent that they, reduce their prices
on OEM products, or begin to carry similar compatible and re-manufactured
products at competitive prices. In addition, GetToner faces competition from
other e-tailers with a business model or strategy similar to that of GetToner.
No assurance can be given that increased competition will not have an adverse
effect on GetToner.
Item 2. Description of Property
The Company's business office is located at 260 Garibaldi Avenue, Lodi, New
Jersey 907644, and is provided by the Company's President on a rent-free basis
under an oral arrangement between the parties. Get Toner's offices are located
at 3-5 Vose Avenue, South Orange, New Jersey 07079 and comprise 500 square feet.
The premises are leased under an agreement that expires August 31, 2003 and
provides for a monthly rental of $500. The Company believes that this office
space will sufficient to support the growth for the next 12 months.
8
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
During the third quarter of 2001, the Company notified its shareholders
pursuant to an Information Statement dated February 9, 2001 of its name change
to American Global Enterprises, Inc., and subsequent change to American
International Ventures, Inc.
PART II
Item 5. Market Price for Common Equity and Related Stockholder Matters
Market Information:
The Company's Common Stock was approved for trading on July 22, 1999 on the
Electronic Pink Sheets and February 2000 on the Over the Counter Bulletin Board
under the Symbol "ANPC." The name was changed to American International
Ventures, Inc. and traded on Over the Counter Bulletin Board under the symbol
"AIVN." There is no assurance that the Common Stock will continue to be quoted
or that any liquidity exists for the Company's Shareholders. The following table
sets forth the monthly trade of high and low prices for the Company's Common
Stock on the Electronic Pink Sheets and Over the Counter Bulletin Board during
the inception of trading.
Quarterly: High Low
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September 23,1999 $0.156 $0.156
December 23, 1999 $0.18 $0.125
March 23, 2000 $0.20 $0.20
June 23, 2000 $0.07 $0.07
September 26,2000 $0.15 $0.093
December 21, 2000 $0.16 $0.156
March 23, 2001 $0.25 $0.22
May 23, 2001 $0.17 $0.17
The Source of this information is Quicken.com; quotation services and
broker-dealers making a market in the Company's Common Stock. These prices
reflect inter-dealer prices, without retail markup, mark-down or commission and
may not represent actual transactions.
The closing sale price of the Common Stock reported on the OTC Bulletin
Board on September 1, 2001 was $0.091.
9
Holders
As of May 31, 2001, there were approximately 327 holders of record of the
Company's Common Stock (this number does not include beneficial owners who hold
shares at broker/dealers in "street-name").
Dividends
The Company has paid no cash dividends on its Common Stock and management
does not anticipate that such dividends will be paid in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan Of Operation
Overview
------------
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. GetToner is currently 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 certain 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. Pursuant to the Birch Mountain agreement, 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.
10
Fiscal year end 2001 compared with Fiscal year end 2000.
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Revenues for fiscal year ended May 31, 2001 were $377,745 which represents
a decrease of $11,789 or 3% from revenues of $389,534 for the comparable period
in 2000. The revenues for both periods reflect sales from the Company's
subsidiary, GetToner.com. The slight decrease was due to a 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 2001, GetToner shifted 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 sales for the 2001 period totaled $232,518 or 61.6% of total
revenue contrasted with $304,488 or 78.2% of total revenue for the 2000 period.
The decrease in cost of sales on a percentage basis for the 2001 period reflects
the higher margins associated with the shift in product mix and market emphasis
described above. Gross profit for the 2001 period was $145,227 compared with
$85,046 for the 2000 period. The increase of $60,181 or 70.8% reflects the
higher margin sales during 2001.
Selling and administrative expenses which consists of marketing expenses,
salaries, rent, and other general and administrative expenses were $580,104 for
the 2001 period contrasted with $128,130 for the prior year end period. The
increase of $451,974 or 353% from the prior period is due to increased salaries
and related expenses paid to GetToner's two officers, and other costs associated
with the shift in product mix and market emphasis discussed above. These costs
include higher advertising and marketing costs, salaries and related costs for
four employees hired during 2001, and increased rent for its larger offices. The
amount for 2001 also includes a $63,000 charge which reflects a total of 600,000
shares of common stock of the Company issued to of its President and Chairman as
salary compensation, a portion of which were earned in prior years.
Operating loss for the 2001 period was $434,877 compared with a loss of
$43,084 for the prior period. The increase in the operating loss of $391,793 or
909% from the prior period is due to principally to the higher selling and
administrative expenses as discussed above partially offset by the higher gross
profit associated with the new product mix and market described above. No
research and development costs were incurred in 2001 or 2000, and there is no
seasonal impact on the Company's sales.
Rental income was $18,900 for the 2001 period compared with none for the
prior period. During 2001, the Company subleased part of GetToner's office space
to a third party. No such arrangement existed during 2000. Interest on long and
short term debt totaled $17,329 contrasted with $4,480 for the prior period. The
increase of $12,849 or 287% is due to a significant increase in credit card and
bank debt which was incurred during the period to support the operations of
GetToner.
11
Liquidity And Capital Resources.
As of May 31, 2001, the Company's working capital deficit was $338,592 and
as of May 31, 2000, the Company's working capital deficit was $57,990. The
increase in deficit for 2001 reflects the operational losses sustained during
the year by GetToner.
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 TLM, 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.
The Company has experienced significant losses in connection with the
operations of GetToner. The Company is uncertain as to when it will achieve
profitable operations. Until it achieves profitable operations, the Company
intends to finance its ongoing operations through the private placement of its
capital stock, through debt financing, or though the sale of its assets in the
form of common stock of Birch Mountain Resources Ltd. The common stock of Birch
Mountain was suspended from trading by the Canadian Venture Exchange in March
2001; consequently the Company was unable to liquidate any shares during the
remainder of fiscal 2001. 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 Company and its ability to conduct its
business in the future. Accordingly, the Company's financial statements contain
note disclosures describing the circumstances that lead to doubt over the
ability of the Company 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.
12
Item 7. Financial Statements
The financial statements required by this Item are set forth beginning on
page F-1 hereof.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On March 1, 2001, the Registrant elected to retain Robert G. Jeffrey,
Certified Public Accountant, and dismissed Gerald Brignola CPA., PA as its
independent auditor. Heretofore, Gerald Brignola CPA., PA had acted as the
Registrant's independent auditor. The audit reports of Gerald Brignola CPA., PA
on the consolidated financial statements of the Registrant for the two most
recent fiscal years ended May 31, 2000 and May 31, 1999 did not contain an
adverse opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope, or accounting principles. The decision to change
accountant firms was recommended by the Registrant's board of directors.
During the Registrant's two most recent fiscal years ended May 31, 2000 and
May 31, 1999, and through the subsequent interim periods ending March 1, 2001
there were no disagreements with the Gerald Brignola CPA., PA on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreement(s), if not resolved to the satisfaction
of the former accountant, would have caused it to make reference to the subject
matter of the disagreement(s) in connection with its report; nor has Gerald
Brignola CPA., PA ever presented a written report, or otherwise communicated in
writing to the Registrant or its board of directors the existence of any
"disagreement" or "reportable event" within the meaning of Item 304 of
Regulation S-B.
PART III
Item 9. Directors. Executive Officers. Promoters and Control Persons
Compliance with Section 16(a) of the Exchange Act
Position
Wit Year First became
Name Age Company Director or Officer
--------------------------------------------------------------------------------
Dr. Emanuel Ploumis 74 CEO/Director 1996
Jack Wagenti 64 President/Director 1996
Jonathan E. Downs 25 Secretary/Treasurer 1998
Charles A. Fitzpatrick 53 Director 1998
Thomas F. August 48 Director 1998
Dale Truesdell 57 Director 1998
Dominic Taglialatella 60 Exc. V P/Director 2001
13
Each director serves until the next annual meeting of Shareholders and
until his respective successor is duly elected and qualifies; Executive officers
are elected by the Board to serve at the discretion of the directors.
Dr. Emanuel Ploumis, D.D.S., Chief Executive Officer/Chairman.
Dr. Ploumis has been the Chairman and Chief Executive Officer of the
Company from 1996 to the present. Dr. Ploumis received his D.D.S. from Temple
University in 1961, and from such date until January 20, 2000 when he retired,
Dr. Ploumis was engaged in the practice of dentistry.
Mr. Jack Wagenti, President/Director.
Mr. Wagenti has been President and Director of the Company from 1996 to the
present. From 1988 to 1996, Mr. Wagenti owned and operated a real estate
brokerage business located in Lodi, New Jersey.
Mr. Charles A. Fitzpatrick, Esq., Director.
Mr. Fitzpatrick has been a Director of the Company since 1998. From 1976 to
the present, Mr. Fitzpatrick has been an attorney engaged in private practice,
specializing in medical malpractice law. Mr. Fitzpatrick is a member of the
Philadelphia and Pennsylvania Bar Associations, Defense Research Institute and
American Academy of Hospital Attorneys, and is admitted to the United States
Court of Appeals for the Third Circuit and Supreme Court of the United States.
He received a B.A. from St. Joseph's University and a J.D. from the University
of Pennsylvania.
Mr. Thomas F. August, M.S., RPH., Director.
Mr. August has been a Director of the Company since 1998. from January 2001
to the present, Mr. August has been a registered pharmacist. From 1998 to
December 2000, Mr. August had been the manager of laboratory services of United
Chemical Technologies, Inc. From 1992 to 1998, he was team leader at Sterling
Winthrop Pharmaceuticals. Mr. August received a Master Degree in Pharmacy and
Chemistry from Philadelphia College of Pharmacy and Science.
Mr. Dale B. Truesdell, B.S., M.S., Director.
Mr. Truesdell has been a Director of the Company since 1998. From 1996 to
the present he has been employed by a residential and commercial construction
firm. Mr. Truesdell received a B.A. and a M.S. in geology from the University of
Massachusetts in 1970 and 1974, respectively.
14
Mr. Jonathan Exter Downs, Secretary/Treasurer.
Mr. Downs has been Secretary and Treasurer of the Company since 1998. From
1999 to the present, he has been employed at Muscular Dystrophy Association as
Support Staff. Mr. Downs received a B.A. degree from Curry College, Milton,
Massachusetts in 1998.
Mr. Dominic Taglialatella, Executive Vice President/Director.
Mr. Taglialatella became an Executive Vice President and a Director of the
Company in March 2001. Mr. Taglialatella has been Chief Executive Officer and
Chairman of the GetToner and its predecessors since May 1998. From December 1996
to February 1998, Mr. Taglialatella was a president and principal owner of TR
Ribbon Manufacturing ("TR Manufacturing"). From 1991 to 1997, he acted as an
advisor to a large office supply company. From 1984 to 1996, he owned and
operated an art gallery in New York City, New York. In 1998, both Mr.
Taglialatella and TR Manufacturing filed for protection under the federal
bankruptcy laws. Mr. Taglialatella received a B.S. degree from Seton Hall
University in 1963.
Item 11. Executive Compensation
For fiscal years ended prior to May 31, 2000, no compensation has been
awarded to, earned by, or paid to the Company's officers and directors. In
February 2001, the Company and the its chairman and president each have agreed
to certain compensation arrangements for the one year period ending May 31,
2001. In consideration for acting as chairman of the Company for such period,
Dr. Ploumis received 300,000 shares of common stock of the Company, and in
consideration for acting as president of the Company for such period, Mr.
Wagenti received 300,000 shares of common stock of the Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the date of this report the stock
ownership of each person known by the Company to be the beneficial owner of five
percent or more of the Company's Common Stock, each executive officer and
director individually and all executive officers and directors of the Company as
a group. No other class of voting securities is outstanding. Each person is
believed to have sole voting and investment power over the shares except as
noted.
15
(a) Security ownership of certain beneficial owners
--------------------------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
-------------------------------------------------------------------------------
Common Anthony Lauro 1,342,500 9.294%
3-5 Vose Avenue
S. Orange, NJ 07079
(b) Security ownership of management
------------------------------------------
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class
--------------------------------------------------------------------------------
Common Dr. Emanuel Ploumis(1) 2,000,000 13.845%
436 Market Street
Oxford, PA 19363
Common Jack Wagenti(2) 2,000,000 13.845%
260 Garibaldi Ave
Lodi, NJ 07644
Common Jonathan E. Downs(3) 1,400,000 9.692%
27 Bush Lane
Denville, NJ 07834
Common Charles A. Fitzpatrick, Esq.(4) 50,000 0.346%
1111 Childs Ave
Drexell, PA 19026
Common Thomas F. August(4) 50,000 0.346%
308 E. Ashland Ave
Glenholden, PA 19036
Common Dominic Taglialatella(2) 1,342,500 9.294%
3-5 Vose Avenue
S. Orange, NJ 07079
Common Dale Truesdell(4) 25,000 0.173%
78 Reynolds Road
Shelburne, MA 01370
Common Includes all Officers and 6,867,500 47.541%
Directors of the Company
As a group (7 persons)
16
(1) Dr. Emanuel Ploumis is Chairman of the Board of Directors and CEO of the
Company.
(2) Jack Wagenti is President and Director of the Company.
Dominic Taglialatella Executive Vice President and Director of the Company.
(3) Jonathan E. Downs is Secretary/Treasurer of the Company.
(4) Charles A. Fitzpatrick, Esq., Thomas F. August, Brian Russell and Dale
Truesdell are Directors of the Company.
Item 13. Exhibits and Reports on Form 8-K
Exhibits
The following exhibits marked with a footnote reference were filed with a
registration statement, which will automatically become effective on January 8,
2000 under the Securities Act of 1933, as amended (the "Securities Act"), and
are incorporated herein by this reference. If no footnote reference is made, the
exhibit is filed with this Report.
Number Exhibit
3.1 Certificate of Incorporation of Company filed with the Secretary
of State of Delaware on January 13, 1998. (1)
3.2 Copy of the by-laws of the Company. (1)
3.3 Specimen Stock Certificate. (1)
10.1 Agreement with Birch Mountain Resources. (2)
-------------------------------------
(1) Filed as an Exhibit to the Company's Form 10-SB filed November 8, 1999
and incorporated herein by this reference.
(2) Filed as an Exhibit to the Company's Form 10-QSB filed December 30,
1999 and incorporated herein by this reference.
Reports on Form 8-K
On March 8, 2001, the Company filed a Form 8-K, as amended under Form 8-K/A
on March 22, 2001, to reflect the change of auditors.
On March 19, 2001, the Company filed a Form 8-K, as amended under Form
8-K/A on May 23, 2001, to reflect a change in control of registrant.
17
SIGNATURE
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on the behalf by the
undersigned, thereunto duly authorized.
American International Ventures, Inc.
Date: March 19, 2002 By: ------------------
Jack Wagenti
President
18
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
CONTENTS
PAGE
Independent Auditor's Report 1
Consolidated Balance Sheet 4
Consolidated Statements of Operations 5
Consolidated Statements of Changes in Stockholders' Deficit 6
Consolidated Statements of Cash Flows 7
Notes To Consolidated Financial Statements 8
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors
American International Ventures, Inc.
I have audited the accompanying consolidated balance sheet of American
International Ventures, Inc. and its subsidiary as of May 31, 2001, and the
related consolidated statements of operations, changes in stockholders' deficit,
and cash flows for the two yearly periods ended May 31, 2001 and May 31, 2000.
These consolidated financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these consolidated
financial statements based on my audits.
The consolidated financial statements as of May 31, 2000 and for the year
then ended have been restated to reflect the pooling of interests with
GetToner.com, Inc. as described in Note 3 to the consolidated financial
statements. I did not audit the May 31, 2000 financial statements of American
International Ventures, Inc., which statements reflect total assets of $9,817 as
of May 31, 2000, and no revenues for the year then ended. Those statements were
audited by other auditors whose report has been furnished to me, and my opinion,
insofar as it relates to the amounts included for American International
Ventures, Inc. as of May 31, 2000, and for the year then ended, is based solely
on the report of the other auditors.
I conducted the audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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.
I believe that the audits and the report of other auditors provide a reasonable
basis for my opinion.
In my opinion, based on my audits and the report of other auditors, the
consolidated financial statements referred to in the first paragraph present
fairly, in all material respects, the financial position of American
International Ventures, Inc. and its subsidiary as of May 31, 2001, and the
results of their operations and their cash flows for the two yearly periods 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 shown in the
accompanying consolidated financial statements, at May 31, 2001, the Company had
a working capital deficiency of $338,592 as well as an accumulated deficit of
$373,212. These factors among other things, also discussed in Note 4 to the
consolidated financial statements, raise substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts or classification of liabilities that
might be necessary should the Company be unable to continue in operation.
ROBERT G. JEFFREY
September 20, 2001
Wayne, New Jersey
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Stockholders and Board of Directors
American Precious Metals, Inc.
260 Garibaldi Avenue
Lodi, NJ 07644
Gentlemen and Madames:
We have audited the accompanying comparative balance sheets of American
Precious Metals as of May 31, 2000 and 1999 and the related comparative
statements of operations and accumulated 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 audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
misstatement. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position as of May 31, 2000 and 1999,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered recurring losses from operations
and, as of May 31, 2000 has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 4. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Our audits were made to form an opinion on the basic financial statements
taken as a whole. The supplemental schedules to the financial statements are
presented to comply with rules and regulations under the Securities and Exchange
Act of 1934 and are not otherwise a required part of the basic financial
statements. The supplementary schedule of changes in stockholder's deficiency,
the supplementary schedule of operations and accumulated deficit, and the
supplementary schedule of cash flows are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
GERALD BRIGNOLA, CPA, PA
August 17, 2000
Hackensack, NJ
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
May 31, 2001
ASSETS
Current Assets
Cash $ 3,811
Accounts receivable, less allowance for
doubtful accounts 13,145
Inventory 3,178
Prepaid expense 150
-------------
Total current assets 20,284
Fixed Assets
Office furniture and equipment 21,589
Less, accumulated depreciation 6,682
-------------
Net fixed assets 14,907
Other Assets
Deferred financing cost 8,417
Security deposits 5,544
-------------
Total other assets 13,961
TOTAL ASSETS $ 49,152
=============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 194,508
Payroll and sales taxes payable 62,260
Notes payable 92,308
Security deposit payable 1,800
Stockholder advance 8,000
-------------
Total current liabilities 358,876
Notes Payable 63,488
-------------
Total Liabilities 422,364
Stockholders' Deficit
Common stock - authorized, 50,000,000
shares of $.00001par value; issued and
outstanding, 14,445,544 shares 144
Capital in excess of par value 599,043
Accumulated deficit (972,399)
Total stockholders' deficit (373,212)
-------------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 49,152
=============
The accompanying notes are an integral part of these financial statements.
-4-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended May 31, 2001 and 2000
2001 2000
---------- ----------
Net Sales $ 377,745 $ 389,534
Cost of Goods Sold 232,518 304,488
---------- ----------
Gross Profit 145,227 85,046
Selling and Administrative Expenses 580,104 128,130
---------- ----------
Operating loss (434,877) (43,084)
Other Income and Expense
Rental income 18,900 -
Interest expense (17,329) (4,480)
---------- ----------
Net Loss $(433,802) $ (47,564)
========== ==========
Loss Per Share:
Basic and Diluted $(.03) $( - )
====== ======
The accompanying notes are an integral part of these financial statements.
-5-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT
For the Years Ended May 31, 2001 and 2000
Capital
Common Stock In Excess Of Accumulated
Shares Amount Par Value Deficit Total
--------------------------- ------------ ------------- ------------
Balance, June 1, 1999 8,415,544 $ 6,937 $ 336,750 $ (425,923) $ (82,236)
Additional shares issued 5,000 5 (5)
Net loss for the year (47,564) (47,564)
Distributions (65,110) (65,110)
--------------------------- ------------ ------------- ------------
Balance, May 31, 2000 8,420,544 6,942 336,745 (538,597) (194,910)
Adjustment (6,858) 6,858 -
Sales of common stock 1,800,000 18 153,482 153,500
Stock issued for services 628,000 6 64,829 64,835
Stock issued in exchange for
cancellation of debt 372,000 4 37,161 37,165
Stock issued in exchange
for stock of
GetToner.com, Inc. 3,225,000 32 (32) -
Net loss for the year (433,802) (433,802)
--------------------------- ------------ ------------- ------------
Balance, May 31, 2001 14,445,544 $ 144 $ 599,043 $ (972,399) $ (373,212)
=========================== ============ ============= ============
The accompanying notes are an integral part of these financial statements.
-6-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended May 31, 2001 and 2000
2001 2000
---------- ---------
Cash Flows From Operations:
Net loss $(433,802) $(47,564)
Adjustments to reconcile net loss to net cash
(consumed) provided by operating activities:
Depreciation and amortization 6,352 1,535
Value of capital stock issued for services 64,835 -
Changes in current assets and liabilities:
Increase in accounts payable and
accrued liabilities 71,214 39,053
Increase in payroll and sales taxes payable 61,260 1,000
Decrease in accounts receivable 15,493 11,493
Decrease (increase) in inventory 9,712 (2,390)
Increase in liability for security deposit 1,800 -
(Increase) decrease in security deposits (3,710) 675
Increase in prepaid expense (50) (100)
---------- ---------
Net cash (consumed) provided by operating
activities (206,894) 3,702
Cash Flows From Investing Activities:
Purchase of furniture and equipment (10,022) -
Fees paid to arrange debt financing (10,000) -
---------- ---------
Net cash consumed by investing activities (20,022) -
Cash Flows From Financing Activities:
Proceeds of sales of common stock 153,500 -
Proceeds of borrowing 98,753 60,180
Repayments of debt (5,701) (30,049)
Shareholder distributions - (65,110)
(Decrease) increase in stockholder advances (10,000) 18,000
---------- ----------
Net cash provided (consumed) by
financing activities 236,552 (16,979)
---------- ----------
Net increase (decrease) in cash 9,636 (13,277)
Cash balance, beginning of period (5,825) 7,452
---------- ----------
Cash balance, end of period $ 3,811 $ (5,825)
========== ==========
The accompanying notes are an integral part of these financial statements.
-7-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 1. ORGANIZATION & BUSINESS
Organization
The Company was formed January 13, 1998 as American Precious Metals, Inc..
On March 16, 1998, it merged with Lucky Seven Gold Mines, Inc., a corporation
which had operated since 1984 and was the successor entity of the merger. On
December 20, 2000, the Company changed its name to American International
Ventures, Inc. (AIV). On March 15, 2001, the Company acquired all of the issued
and outstanding capital stock of the parent company of GetToner.com, Inc.
(GetToner) in exchange for 3,225,000 shares of common stock of the Company.
GetToner, along with predecessors, has been in the business of marketing office
supplies since 1997. For financial accounting purposes, the merger with GetToner
has been accounted for as a pooling of interests, as explain in Note 3.
Business
GetToner, the Company's wholly owned subsidiary, markets and sells office
supplies, principally imaging products such as laser toner, inkjet, and fax
ribbon cartridges for computer printers, fax machines, and copiers. These
products are sold at discounted prices to major office supply retailers.
GetToner conducts its business principally through the Internet at its
GetToner.com website. Since the principal source of the sales of GetToner is its
website, it is not limited geographically.
The Company, itself, was in the development stage until its acquisition of
GetToner. As such, its activities were limited to the pursuit of new business
ventures. As explained in Note 12, the Company has consulted with mining
companies in the development of technology related to metallurgical testing.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Consolidated Statements
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, GetToner. All significant
intercompany balances and transactions have been eliminated in
consolidation.
-8-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 2 (continued)
b. Cash
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
c. Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which
include cash equivalents, accounts receivable, investment securities,
accounts payable and accrued liabilities approximate their fair values
at May 31, 2001.
d. Losses Per Share
Basic and diluted net loss per common share is computed by dividing the
net loss available to common shareholders for the period by the weighted
average number of shares of common stock outstanding during the period.
The number of weighted average shares outstanding as well as the amount
of net loss per share are the same for basic and diluted per share
calculations for all periods reflected in the accompanying financial
statements.
e. Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
which requires the use of the "liability method". Accordingly,
deferred tax liabilities and assets are determined based on differences
between the financial statement and tax bases of assets and liabilities,
using enacted tax rates in effect for the year in which the differences
are expected to reverse. Current income taxes are based on the income
that is currently taxable.
f. Inventory
Inventory consists principally of finished product. Inventories are
stated at the lower of cost (determined on a first in-first out basis)
or market.
-9-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 2 (continued)
g. Fixed Assets
Fixed assets are recorded at cost. Depreciation is computed by using
accelerated methods, with useful lives of seven years for furniture and
equipment and five years for computers and automobiles.
h. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
i. Advertising Costs
The Company expenses advertising costs when the advertisement occurs.
Advertising costs amounted to $25,830 in the year ended May 31, 2001
and $1,830 in the year ended May 31, 2000.
j. Segment Reporting
The Company has organized its business into two segments: exploitation
of precious metals; and sales of office supply products. The precious
metals segment intends using environmentally safe methods of process,
and it intends to introduce mining companies for possible acquisition,
joint venture and financing. The principal products sold by the office
supplies segment are disposable imaging products such as laser toner,
inkjet and fax ribbon cartridges for computer printers, fax machines
and copiers.
The segments' accounting policies are the same as those described in the
summary of significant accounting policies. The Company evaluates
performance based on profit and loss from operations before income
taxes, not including nonrecurring gains and losses. There are no
intersegment sales.
The Company's reportable business segments are discrete business units
that offer different products and services. Each segment is managed
separately because each requires different technologies and each markets
to distinct classes of customers.
-10-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 2 (continued)
k. Recognition of Revenue
Revenue is realized from product sales. Recognition occurs upon
delivery.
l. Common Stock
Common stock of the Company has been issued in return for services.
Values are assigned to these issuances equal to the value of services
received or the market value of the common stock, whichever is most
clearly evident.
Note 3. POOLING OF INTERESTS
On March 15, 2001, the Company acquired all of the outstanding stock of the
parent company of GetToner. In this exchange, the Company issued 3,225,000
shares of its common stock, and the chairman of GetToner was named an officer
and director of the Company. This business combination has been accounted for as
a pooling of interests, with all significant intercompany balances and
transactions eliminated in consolidation.
As a result of the combination of companies, GetToner changed its fiscal
year to conform to the May 31 year of the Company. There were no adjustments
that resulted from this change, and no changes in the accounting practices of
either company.
The results of the separate operations of the two companies for the years
ended May 31, 2001 and 2000 are summarized below.
2001 2000
AIV GetToner AIV GetToner
-----------------------------------------------------------
Revenue $ - $ 377,745 $ - $389,534
Net loss (126,656) (307,146) (29,537) (18,027)
-11-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS May 31, 2001
Note 4. SEGMENT REPORTING
Segment information is presented below for:
Year Ended May 31, 2001
Office Precious
Supplies Metals Total
--------- --------- --------
Sales to External Customers $377,745 $ - $377,745
Intersegment Revenue - - -
Rental Income 18,900 - 18,900
Interest Expense 17,329 - 17,329
Depreciation and Amortization 4,038 2,314 6,352
Segment Loss 307,147 126,655 433,802
Other Significant Noncash Items:
Shares of common stock issued
for services 2,000 62,835 64,835
Shares of common stock issued
in exchange for cancellation
of debt 37,165 37,165
Segment Assets 37,879 11,273 49,152
-12-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 4 (continued)
Year Ended May 31, 2000
Office Precious
Supplies Metals Total
--------- --------- ---------
Sales to External Customers $389,534 $ - $389,534
Intersegment Revenue - - -
Rental Income - - -
Interest Expense 4,480 - 4,480
Depreciation and Amortization - 1,535 1,535
Segment Loss 18,027 29,537 47,564
Segment Assets 37,475 9,817 47,292
Note 5. GOING CONCERN UNCERTAINTY
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As shown in the
consolidated financial statements, the Company had a material working capital
deficiency and an accumulated deficit at May 31, 2001. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. The consolidated financial statements do not include adjustments
relating to the recoverability of assets and classification of liabilities that
might be necessary should the Company be unable to continue in operation.
Present plans of the Company, the realization of which cannot be assured,
to overcome these difficulties include but are not limited to the raising of
additional funds from sales of common stock.
-13-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS May 31, 2001
Note 6. RELATED PARTY TRANSACTIONS
In connection with the incorporation of GetToner, on June 5, 2000, the
chairman and president of GetToner each received 135,000 shares of the common
stock of GetToner and 100,000 shares of the 10% voting preferred stock of
GetToner in return for services. These shares were among the shares exchanged
for 3,225,000 shares of common stock of the Company in connection with the
GetToner combination. Each party received 1,582,500 shares of the Company in
this transaction.
On February 20, 2001, employment agreements were executed with the
president and chairman of GetToner. Each agreement has a three-year term.
During the year ended May 31, 1999, the wife of the chairman of GetToner
made an advance to GetToner in the amount of $29,600. During the year ended May
31, 2000, the wife of the president of GetToner made an advance to GetToner in
the amount of $5,000. These advances are evidenced by promissory notes which
bear interest at rates of 12.25% and 16.6%, respectively. The balances due on
these notes at May 31, 2001 were $29,442 and $4,040, respectively. In addition,
the chairman of GetToner advanced $8,000 to GetToner during the year ended May
31, 2000. This advance is due on demand and does not bear interest.
During January 2001, the chairman and president of the Company each
received 500,000 shares of common stock in exchange for services and for
cancellation of amounts owed to them. The amounts owed to them were $19,035 in
the case of the chairman and $18,129 in the case of the president.
The Company makes its headquarters in premises owned by the Company
president, which to date has been rent-free.
Note 7. PRIVATE PLACEMENT OFFERINGS
The Company conducted private placement offerings during the year ended May
31, 2001. These offerings were exempt under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder. A total of
1,800,000 shares of common stock was sold under the offerings resulting in net
proceeds of $153,500.
Of the shares sold during the year ended May 31, 2001, 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.
-14-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 8. LOSS PER SHARE
Basic and diluted loss per share is based on the net loss divided by the
weighted average number of common shares outstanding during the period.
Year Ended May 31, 2001
Weighted
Income Average Shares Per Share
(Loss) Outstanding Amount
Net Loss allocable to common
Shareholders - basic and diluted $(433,802) 12,683,044 $(.03)
Year Ended May 31, 2000
Net Loss allocable to common
Shareholders - basic and diluted $ (47,564) 11,643,044 $( - )
Note 9. NOTES PAYABLE
GetToner has two lines-of-credit under which it can borrow up to $50,000
and $10,000, respectively. It also has a business flex loan arrangement with
American Express under which credit card charges are summarized each month and
paid in six monthly installments. In addition, GetToner is obligated under two
notes payable to banks, and a note payable to each of the wives of the GetToner
chairman and president.
-15-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
This debt is summarized below:
Due
Currently Long Term Total
--------- ---------- --------
Line of credit, with interest
at 13.49% $ 44,513 $ - $ 44,513
Line of credit, with interest
at 8.5% 9,837 - 9,837
Flex loan, with interest
at 11% 24,709 - 24,709
Note payable to bank, due
March 2003, in monthly
installments of $415, with
interest at 10% 4,341 3,973 8,314
Note payable to bank, due
May 2005, in monthly
installments of $861, with
interest at 8% 7,654 27,287 34,941
Note payable, due May 15, 2003,
with interest at 16.6% 1,132 2,908 4,040
Note payable, due
November 22, 2014, in monthly
installments of $310, with interest
at 12.25% 122 29,320 29,442
--------- ---------- --------
Totals $ 92,308 $ 63,488 $155,796
========= ========== ========
Maturities of long-term debt are as follows:
Years Ended May 31, Amount
2002 $13,776
2003 10,796
2004 10,044
2005 222
Thereafter 28,650
--------
$63,488
========
-16-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 10. RENTALS UNDER OPERATING LEASES
GetToner has conducted its operations from facilities that were leased
under a five-year noncancelable-operating lease which was to expire in May,
2005. During July 2001, GetToner arranged to terminate this lease effective
August 31, 2001. It has entered a lease for new quarters in South Orange, New
Jersey. In addition, a computer system and a variety of office equipment is
leased under operating leases, most of which expire in 2003.
The following is a schedule of future minimum rental payments required
under these operating leases as of May 31, 2001:
YEAR ENDED
MAY 31, AMOUNT
---------- ---------
2002 $ 32,609
2003 18,295
2004 4,043
---------
$ 54,947
=========
Rent expense amounted to $47,660 in the year ended May 31, 2001 and $14,250
in the year ended May 31, 2000.
Part of the GetToner facility was subleased to an outside party on a
month-to-month basis at a rate of $2,250 per month. This arrangement was
terminated August 31, 2001.
-17-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 11. INCOME TAXES
The Company and its subsidiary have experienced losses each year since its
inception. As a result, it has incurred no Federal income tax. The Internal
Revenue Code allows net operating losses (NOL's) to be carried forward and
applied against future profits for a period of twenty years; state law in New
Jersey allows a seven-year carry forward period. At May 31, 2001, NOL
carryforwards were available as follows: in the case of AIV, the Federal amount
is $518,679 and the state amount is $483,426; in the case of GetToner, the
amounts are $477,480 and $477,280, respectively. The potential tax benefit of
the NOL's has been recognized on the books of the Company, but offset by a
valuation allowance. If not used, the Federal carryforwards will expire as
follows:
Year Year
Ended Ended
May 31, AIV December 31, GetToner
------- -------- ------------ --------
2011 $103,552
2012 177,370
2019 82,978
2020 28,123 2020 $148,453
2021 126,656 2021 329,027
Under Statement of Financial Accounting Standards No. 109, recognition of
deferred tax assets is permitted unless it is more likely than not that the
assets will not be realized. The Company has recorded deferred tax assets as
follows:
Current Non-current Total
------- ----------- --------
Deferred Tax Assets $68,352 $81,071 $149,423
Realization Allowance 68,352 81,071 149,423
------- ----------- --------
Balance Recognized $ - $ - $ -
======= =========== ========
-18-
AMERICAN INTERNATIONAL VENTURES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
Note 12. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash was paid for interest and income taxes during the years ended May 31,
2001 and 2000, as follows:
2001 2000
------- ------
Interest $13,520 $2,760
Income taxes 100 200
There were no noncash investing activities during either the year ended May
31, 2001 or the year ended May 31, 2000. The following noncash financing
activities occurred:
a. Shares of common stock were issued during the year ended May 31, 2001 in
exchange for the stock of GetToner; these totaled 3,225,000 shares.
b. Shares of common stock were issued for services during the 2001 year;
these totaled 628,000 shares.
c. Shares of common stock were issued during the 2001 year in exchange for
cancellation of $37,165 of debt; these totaled 372,000 shares.
Note 13. OTHER MATTERS
During the year ended May 31, 2000, the Company earned a finders fee
consisting of 350,000 shares of the common stock of Birch Mountain Resources,
Ltd. (Birch Mountain), a company which publicly traded on the Canadian Venture
Exchange (the Exchange). An additional 150,000 common shares of Birch Mountain
may be earned when it has been determined by Birch Mountain that certain
specified conditions have been satisfied. No assurances can be given that the
Company will earn such shares. The stock of Birch Mountain was suspended from
trading by the Exchange effective June 28, 2000. Restoration of its trading
privileges will depend on the outcome of an investigation of Birch Mountain
being conducted by the Exchange. Due to this suspension action, no value has
been assigned to the Birch Mountain stock on the books of the Company. The
trading price of Birch Mountain on May 16, 2000 was $.95 per share. The June 30,
2000 unaudited financial statements of Birch Mountain contained total assets of
$13,933,000, net equity of $13,575,000, and total revenue of zero.
-19-