Notes
to the Condensed Consolidated Financial Statements (Amended)
(Unaudited)
AIM EXPLORATION INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash
|
$
5,369
|
$
802
|
|
Prepaid deposits
and services – Note 4
|
27,500
|
11,340
|
|
Total
Current Assets
|
32,869
|
12,142
|
|
|
|
|
|
Mineral property
– Note 5
|
804,656
|
804,656
|
|
|
|
|
|
TOTAL
ASSETS
|
$
837,525
|
$
816,798
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts payable
and accrued liabilities – Note 6
|
$
318,669
|
$
319,878
|
|
Loans payable
– Note 7
|
25,650
|
44,270
|
|
Loans payable
– related party – Note 8
|
601,748
|
557,576
|
|
Convertible note,
net of unamortized discount – Note 9
|
654,749
|
634,555
|
|
Derivative
liability – Note 10
|
674,745
|
729,180
|
|
TOTAL
LIABILITIES
|
2,275,561
|
2,285,459
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT
|
|
|
|
Capital
StockAuthorized
|
|
|
|
1,000,000
shares of preferred stock, $0.001 par value
Issued and
outstanding 100,000 shares (100,000 as at August 31, 2017) –
Note 11
|
100
|
100
|
|
1,500,000,000
shares of common stock, $0.001 par valueIssued and outstanding
1,134,375,275 shares (724,370,720 shares outstanding as at August
31, 2017) – Note 11
|
1,257,589
|
847,585
|
|
Additional paid in
capital
|
2,603,484
|
2,451,570
|
|
Shares
receivable
|
(5,090
)
|
(5,090
)
|
|
Accumulated
deficit
|
(5,294,119
)
|
(4,762,826
)
|
|
|
|
|
|
TOTAL
STOCKHOLDERS' DEFICIT
|
(1,438,036
)
|
(1,468,661
)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
837,525
|
$
816,798
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements
AIM EXPLORATION INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
6 months ended
February 28,
2018
|
6 months ended
February 29,
2017
|
3 months ended
February 28,
2018
|
3 months ended
February 29,
2017
|
|
REVENUE
|
|
|
|
|
|
Total
Revenue
|
$
-
|
$
-
|
$
-
|
$
-
|
|
|
|
|
|
|
|
Gross
Profit
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
MINERAL
PROPERTY OPERATIONS
|
|
|
|
|
|
Acquisition
|
-
|
-
|
-
|
-
|
|
Exploration
|
3,636
|
-
|
-
|
-
|
|
Total
Mineral Property Operations
|
3,636
|
-
|
-
|
-
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
Accretion
|
236,527
|
45,001
|
157,543
|
4,591
|
|
Consulting
fees
|
29,171
|
33,527
|
16,380
|
20,993
|
|
Filling
fees
|
1,436
|
7,540
|
-
|
5,110
|
|
Office &
general
|
25,332
|
20,569
|
14,820
|
9,174
|
|
Professional
fees
|
42,389
|
33,644
|
10,280
|
26,521
|
|
Public
relations
|
-
|
44,630
|
-
|
22,192
|
|
Related party
– director’s fees
|
-
|
388,833
|
-
|
-
|
|
Related party
– management fees
|
105,000
|
90,000
|
52,500
|
45,000
|
|
|
|
|
|
|
|
Total
Expenses
|
439,855
|
663,744
|
251,523
|
133,581
|
|
|
|
|
|
|
|
Loss
from operations
|
(443,491
)
|
(663,744
)
|
(251,523
)
|
(133,581
)
|
|
|
|
|
|
|
|
Interest
expense
|
(31,145
)
|
(38,958
)
|
(16,269
)
|
(25,512
)
|
|
Finance
costs
|
(105,914
)
|
-
|
(75,347
)
|
-
|
|
Related party
– loss on settlement of debt
|
-
|
(660,000
)
|
-
|
(660,000
)
|
|
Unrealized
foreign exchange loss
|
(3,653
)
|
(61,636
)
|
664
|
(165
)
|
|
Gain
(loss) on derivative liability
|
52,910
|
9,783
|
(24,630
)
|
4,856
|
|
|
|
|
|
|
|
Total
Other Expense
|
(87,802
)
|
(750,811
)
|
(115,582
)
|
(680,821
)
|
|
|
|
|
|
|
|
Net
Loss
|
$
(531,293
)
|
$
(1,414,555
)
|
$
(367,105
)
|
$
(814,402
)
|
|
|
|
|
|
|
|
BASIC
AND DILUTED LOSS PER COMMON SHARE
|
$
0.00
|
$
0.00
|
$
0.00
|
$
0.00
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
849,383,217
|
566,864,128
|
975,647,990
|
659,839,459
|
|
WEIGHTED
AVERAGE NUMBER OF PREFERRED SHARES OUTSTANDING
|
100,000
|
100,000
|
100,000
|
100,000
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements
AIM EXPLORATION INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
6 months
ended February
28, 2018
|
6 months
ended
February
29, 2017
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
Net
Loss
|
$
(531,293
)
|
$
(1,414,555
)
|
|
Accretion
related to convertible note
|
236,527
|
45,001
|
|
Finance
costs and derivative expense
|
134,059
|
38,958
|
|
Change
in fair value of derivative liability
|
(52,910
)
|
(9,783
)
|
|
Related
party – loss on repayment of debt
|
-
|
660,000
|
|
Shares
issued for services
|
-
|
535,832
|
|
Adjustments to
reconcile Net Loss to net cash used in
operating
activities:
|
|
|
|
Prepaid deposits
and services
|
(16,160
)
|
2,077
|
|
Accounts
Payable
|
(1,209
)
|
72,291
|
|
NET
CASH USED IN OPERATING ACTIVITIES
|
(230,986
)
|
(70,179
)
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
Convertible
debt
|
210,000
|
-
|
|
Loans
payable
|
(18,620
)
|
29,000
|
|
Loans from related
party
|
44,173
|
41,819
|
|
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
235,553
|
70,819
|
|
|
|
|
|
NET
(DECREASE) INCREASE IN CASH
|
4,567
|
640
|
|
|
|
|
|
CASH,
BEGINNING OF PERIOD
|
802
|
417
|
|
|
|
|
|
CASH,
END OF PERIOD
|
$
5,369
|
$
1,057
|
The
accompanying notes are an integral part of these condensed
consolidated financial statements
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF
PRESENTATION
Aim Exploration, Inc. (“Company”) was organized to
engage in mineral exploration. The Company was incorporated on
February 18, 2010 in the State of Nevada and established a fiscal
year end at August 31.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The
condensed
consolidated
financial statements present the
condensed
consolidated balance sheets,
condensed
consolidated
statements of operations and
condensed
consolidated cash flows of the
Company. These financial statements are presented in United States
dollars and have been prepared in accordance with accounting
principles generally accepted in the United States.
Principles of Consolidation
The
condensed
consolidated
statements incorporate the financial statements of the Company and
its wholly-owned subsidiary, Aim Exploration SA, of Peru. All
significant intercompany accounts and transactions have been
eliminated in consolidation.
Cash and Cash Equivalents
For purposes of the condensed consolidated statement of cash flows,
the Company considers highly liquid financial instruments purchased
with a maturity of three months or less to be cash
equivalents.
Functional Currency
The condensed consolidated financial statements are presented in
United States dollars, which is also the functional and reporting
currency of the Company. The functional currency of its subsidiary
is the Peruvian Nuevos Sol. Monetary assets and liabilities
denominated in foreign currencies are translated at the period end
exchange rate while non-monetary assets and liabilities are
translated at historical rates. Revenues and expenses are
translated at the average exchange rate for the period. Foreign
currency gains and losses are included in the determination of net
income or loss.
Advertising
Advertising
costs are expensed as incurred. As of February 28, 2018, no
advertising costs have been incurred.
Property
The
Company does not own or rent any property. The Company’s
office space is being provided by the president at no charge to the
Company.
Use of Estimates and Assumptions
Preparation
of the financial statements in conformity with accounting
principles generally accepted in the United States requires
management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
Income Taxes
The
Company follows the liability method of accounting for income
taxes. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax balances. Deferred tax assets
and liabilities are measured using enacted or substantially enacted
tax rates expected to apply to the taxable income in the years in
which those differences are expected to be recovered or settled.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The
effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the date
of enactment or substantive enactment.
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Fair Value of Financial Instruments
The Company has adopted Accounting Standards Codification subtopic
820-10, Fair Value Measurements and Disclosures ("ASC 820-10"). ASC
820-10 defines fair value, establishes a framework for measuring
fair value and enhances fair value measurement disclosure. The
adoption of ASC 820-10 requires that the Company disclose assets
and liabilities that are recognized and measured at fair value on a
non-recurring basis, presented in a three-tier fair value
hierarchy, as follows:
- Level
1. Observable inputs such as quoted prices in active
markets;
- Level
2. Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
- Level
3. Unobservable inputs in which there is little or no market data,
which require the reporting entity to develop its own
assumptions.
The following presents the gross value of assets that were measured
and recognized at fair value:
|
|
|
|
|
Level
1
|
$
5,369
|
$
1,600,816
|
|
Level
2
|
$
832,156
|
$
674,745
|
|
Level
3
|
$
Nil
|
$
Nil
|
The Company adopted ASC 825-10, Financial Instruments, which
permits entities to choose to measure many financial instruments
and certain other items at fair value. The adoption of this
standard did not have an impact on the Company's financial
position, results of operations or cash flows. The carrying value
of cash and cash equivalents, accounts payable and accrued
expenses, as reflected in the balance sheets, approximate fair
value because of the short-term maturity of these
instruments.
Derivative Liability
The conversion features embedded in the outstanding convertible
notes payable are separately accounted for as a derivative
liability in accordance with ASC 815-15, Embedded Derivative. This
is because the number of shares that may be acquired upon
conversion is indeterminable as the conversion rates are expressed
as a percentage discount to the current fair market value of common
stock at the time of conversion. Derivative liabilities are valued
when the host instruments (convertible notes) are initially issued
and are also revalued at each reporting date, with the change in
the respective fair values being recorded as a gain or loss to the
derivative liability.
Net Loss per Share
Basic
loss per share includes no dilution and is computed by dividing
loss available to common stockholders by the weighted average
number of common shares outstanding for the period. Dilutive loss
per share reflects the potential dilution of securities that could
share in the losses of the Company. Because the Company does not
have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for recoverability in
accordance with ASC 360, Property Plant and Equipment. Under that
standard, the Company reviews the recoverability of its long-lived
assets or asset groups when events or changes in circumstances
indicate that their carrying amount may not be recoverable.
Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset;
significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the
amount originally expected for the acquisition or construction of
the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses
associated with the use of the asset; and current expectation that
the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful
life.
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Impairment of Long-Lived Assets (Continued)
Recoverability is assessed based on the carrying amount of the
asset and its fair value which is generally determined based on the
sum of the undiscounted cash flows expected to result from the use
and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized
when the carrying amount is not recoverable and exceeds fair value.
The Company conducts a review for each reported period and
determines whether any triggering events are
indicated.
Mineral Property Costs
Once the legal right to explore a property has been acquired, the
Company capitalized all costs related to mineral property interests
on a property-by-property basis. Such costs include mineral
property acquisition costs, net of any recoveries.
Property
acquisition costs include cash costs and the fair market value of
issued shares and other share-based payments, paid under option or
joint interest agreements. Payment terms are at the sole discretion
of the Company and are recorded as acquisition costs upon payment.
The Company has capitalized $804,656
of mineral property acquisition costs reflecting its investment in
its properties. To date, the Company has not established any proven
or probable reserves on its mineral properties.
Stock-based Compensation
The Company adopted FASB guidance on stock based compensation upon
inception at February 18, 2010. ASC 718-10-30-2 requires all
share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based
on their fair values. The Company has not had any stock and stock
options issued for services and compensation for the period from
inception (February 18, 2010) through February 28,
2018.
Recent Accounting Pronouncements
Other recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force), the American Institute
of Certified Public Accountants, and the United States Securities
and Exchange Commission did not or are not believed by management
to have a material impact on the Company’s present or future
consolidated financial statements.
NOTE 3 – GOING CONCERN
The
Company’s financial statements are prepared in accordance
with generally accepted accounting principles applicable to a going
concern. This contemplates the realization of assets and the
liquidation of liabilities in the normal course of business.
Currently, the Company has a working capital deficit of $2,242,692,
an accumulated deficit of $5,294,119
and net loss from operations since
inception of $5,294,119. The Company does not have a source of
revenue sufficient to cover its operation costs giving substantial
doubt for it to continue as a going concern. The Company will be
dependent upon the raising of additional capital through placement
of our common stock in order to implement its business plan, or
merging with an operating company. There can be no assurance that
the Company will be successful in either situation in order to
continue as a going concern. The Company is funding its initial
operations by way of issuing common shares.
The
officers and directors have committed to advancing certain costs of
the Company, including Legal, Audit, Transfer Agency and Edgarizing
costs.
NOTE 4 – PREPAID DEPOSITS AND SERVICES
|
|
|
|
|
Prepaid
services
|
$
-
|
$
6,164
|
|
Prepaid
deposits
|
27,500
|
5,176
|
|
|
$
27,500
|
$
11,340
|
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 5 – MINERAL PROPERTY
On June
23, 2014, Aim Exploration, Inc. entered into a Mining Concession
Asset Acquisition Agreement (the “Agreement”) with
Percana Mining Corp. (“Percana”). Pursuant to the
Agreement, the Company acquired three separate mining concessions.
The concession titles are unencumbered and comprise of three
separate adjoing mining concession two concessions representing 40%
are known as El Tunel Del Tiempo 1 code 11060780 and El Tunel Del
Tiempo 2 code 11060781, and the third concession property is known
as Agujeros Negros MAAG comprising the remaining 60%, all of which
are registered to the Company.
NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
|
|
|
|
|
Accounts
payable
|
$
311,389
|
$
311,598
|
|
Accrued
liabilities
|
7,280
|
8,280
|
|
|
$
318,669
|
$
319,878
|
NOTE 7 – LOANS PAYABLE
During the six months ended February 28, 2018, the Company issued
unsecured, non-interest bearing loans of $7,000 (February 29, 2017:
$127,350) and repaid loans of $25,620 (February 29, 2017:
$Nil).
NOTE 8 – LOAN PAYABLE – RELATED PARTY
During the period ended
February 28, 2018, a director of the
Company advanced $7,655 (February 29, 2017: $38,297).
The amounts are unsecured, non-interest bearing
and are due on demand. During the same period, the Company made
repayments of $
68,484
to a
director (
February 29, 2017
:
$
86,500
).
Nil
common shares (
February 29,
2017
: 34,285,739 common shares) were
issued to repay $
Nil
of this
amount (
February 29, 2017
:
$72,000
).
(Note 11)
During the period ended February 28, 2018, the Company made
repayments to related parties, issuing
Nil
common shares (February 29, 2017:
189,600,000
common shares) of the
Company with a fair value of $
Nil
(
February 29, 2017
: $
221,440)
.
During the period ended
February 28, 2018,
management fees totaling $
105,000
where accrued as payable to directors
and officers of the Company (February 29, 2017:
$
90,000
). During the period
ended February 28, 2018, the Company issued Nil common shares
(February 29, 2017: 219,444,444 common shares to directors in
compensation for their services totaling $Nil (February 29, 2017:
$460,833).
As at
February 28, 2018
, the
Company owed related party loans of $
601,748
(August 31, 2017: $
557,576)
.
NOTE 9 – CONVERTIBLE NOTE
During
the six months ended February 28, 2018, the Company issued
convertible notes with a principal balance of $210,000, with
maturity dates between March 11, 2018 and November 15, 2018, and
interest rates per annum of 8% - 22%. The principal is convertible
into shares of the Company at a conversion rate equal to 61% of the
lowest trading price of the Company’s common stock for the
fifteen prior trading days, as defined in the
agreements.
During
the six months ended February 28, 2018, 410,004,555 common shares
were issued in relation to conversion options exercised during the
period, which reduced the convertible debt by
$194,088.
The
following convertible notes were outstanding as at February 28,
2018 and August 31, 2017:
|
|
|
|
|
Note
balance
|
$
627,153
|
$
586,512
|
|
Debt
discounts
|
(98,717
)
|
(64,917
)
|
|
Accrued
interest
|
126,313
|
112,959
|
|
|
$
654,749
|
$
634,554
|
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 10 – DERIVATIVE LIABILITY
An
embedded derivative has been bifurcated and accounted for
separately from the debt host. Accordingly, the Company recorded
the estimated derivative as a liability upon issuance of the
convertible notes. The derivative liability was recorded by
reducing the carrying value of the convertible notes. The fair
value of the embedded derivative fluctuates with the fair value of
the Company’s common stock, which is calculated each quarter
using the Black-Scholes valuation model.
During
the period ended February 28, 2018, the Company recognized change
in fair value of the derivative liability of $52,910 related to the
change in fair value of the conversion feature. The change in fair
value of the conversion feature was recorded through operating
results.
NOTE 11 – CAPITAL STOCK
On
April 25, 2016, the Company consolidated its share capital on a
250:1 basis. All common shares and per share amounts have been
restated to reflect this share consolidation.
The
Company has authorized 250,000,000 shares of common stock with a
par value of $0.001 per share and 1,000,000 shares of preferred
stock with a par value of $0.001 per share.
At
February 28, 2018, 1,134,375,275 shares of common stock were issued
and outstanding, and 100,000 shares of preferred stock were issued
and outstanding.
Six months ended February 28, 2018
During
the six months ended February 28, 2018, the Company issued
410,004,555 common shares pursuant to the exercise of the option
attached to outstanding convertible notes.
Year ended August 31, 2017
On
September 14, 2016, the Company issued an additional 220,000,000 to
Percana to bring their post-consolidation shareholdings to
235,750,000 common shares. The value of these additional shares is
$462,000 which is based on fair market value. These shares were
issued in connection with the acquisition of certain mining
property. (Note 4)
During
the year ended August 31, 2017, the Company issued 27,305,206
common shares pursuant to the exercise of the option attached to
outstanding convertible notes and 400,000 common shares pursuant to
the exercise of the option attached to outstanding related party
convertible notes.
During
the year ended August 31, 2017, the Company issued 25,000,000
common shares in connection with services rendered. Such services
had a fair value of $75,000.
During
the year ended August 31, 2017, the Company issued 219,444,444
common shares in connection with director’s compensation.
Such services had a fair value of $395,000. Of this amount $323,000
was expensed during the current period and $72,000 reduced an
amount due to a related party.
During
the year ended August 31, 2017, the Company issued 206,505,000
common shares in connection with paying down $206,505 of debt to a
related party.
During
the year ended August 31, 2017, the Company issued 3,343,341 common
shares in connection with a private placement offering. The common
shares were issued at a fair value of $0.03 per share for gross
proceeds of $99,700.
AIM EXPLORATION INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
February 28, 2018 (unaudited)
NOTE 11 – CAPITAL STOCK (CONTINUED)
Share purchase warrants
As at
February 28, 2018, the following share purchase warrants issued in
connection with convertible notes were outstanding:
|
|
|
|
|
9,258,535
|
$
0.0052
|
September 11,
2022
|
|
6,091,617
|
$
0.0047
|
September 22,
2022
|
|
5,611,672
|
$
0.0047
|
October 27,
2022
|
|
20,576,130
|
$
0.0018
|
December 12,
2022
|
|
13,227,512
|
$
0.0013
|
January 30,
2023
|
|
14,244,872
|
$
0.0016
|
February 27,
2023
|
|
69,010,338
|
|
|
A
summary of the changes in warrants for the period ended February
28, 2018 and year ended August 31, 2017 is presented
below:
|
|
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining Life
|
|
Balance, August 31,
2016 and 2017
|
-
|
-
|
-
|
|
Issued
|
69,010,338
|
$
0.0026
|
|
|
Balance,
February 28, 2018
|
69,010,338
|
|
|
NOTE 12 – LOSS PER SHARE
The
Company calculates the basic and diluted loss per common share
using the weighted average number of common shares outstanding
during each period. To compute diluted earnings per share, the
average number of shares outstanding is adjusted for the number of
potentially dilutive shares.
|
|
SIX MONTHS ENDED FEBRUARY 28,
|
|
|
|
|
|
|
|
|
|
Issued shares
beginning of year
|
724,370,720
|
22,392,729
|
|
Weighted average
issuances
|
125,012,497
|
544,471,399
|
|
Basic weighted
average common shares, end of year
|
849,383,217
|
566,864,128
|
NOTE 13 – SUBSEQUENT EVENTS
1.
Subsequent to
February 28, 2018, the Company issued 20,000,000 common shares
pursuant to the exercise of options attached to outstanding
convertible notes.
2.
Subsequent to
February 28, 2018, the Company issued convertible notes with a
principal balance of $40,000.