UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x |
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended August 31, 2015 | ||
OR | ||
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-30368
American International Ventures, Inc.
(Name of Small Business Issuer in its charter)
Delaware |
| 22-3489463 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
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15122 Tealrise Way Lithia, Florida |
| 33547 |
(Address of principal executive offices) |
| (Zip Code) |
(813) 260-2866 |
(Registrants telephone number, including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 12 months and (2) has been subject to such filing requirements for the past 90 days. (1) x Yes o No (2) x Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes x No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller Reporting Company x
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o Yes x No
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of October 15, 2015, is 213,149,945 shares of Common Stock, $.00001 par value.
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TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Item 4. Controls and Procedures.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds. Bob please correct
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
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AMERICAN INTERNATIONAL VENTURES, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||
| August 31, 2015 |
| May 31, 2015 |
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ASSETS |
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Current Assets |
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Cash | $ 10,742 |
| $ 22,121 |
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Miscellaneous receivables | 21,790 |
| 22,748 |
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Total current assets | 32,532 |
| 44,869 |
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Fixed Assets |
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Vehicles | 150,039 |
| 150,039 |
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Mining equipment | 502,400 |
| 502,400 |
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Office furniture and equipment | 30,022 |
| 30,022 |
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Total assets | 682,461 |
| 682,461 |
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Less accumulated depreciation | 286,880 |
| 261,299 |
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Net fixed assets | 395,581 |
| 421,162 |
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Other Assets |
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Investment in securities | 6,380 |
| 6,380 |
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Mining claims | 861,707 |
| 861,707 |
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Total other assets | 868,087 |
| 868,087 |
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TOTAL ASSETS | $ 1,296,200 |
| $ 1,334,118 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities |
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Current portions of notes payable | $ 89,639 |
| $ 89,500 |
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Accounts payable and accrued expenses | 148,071 |
| 149,250 |
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Taxes payable | 66,070 |
| 73,027 |
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Advances from officers and directors | 248,325 |
| 238,325 |
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Total current liabilities | 552,105 |
| 550,102 |
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Long Term Liabilities |
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Long term portions of notes payable | 12,512 |
| 14,707 |
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Warrant liability | 27,150 |
| 27,150 |
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Total long term liabilities | 39,662 |
| 41,857 |
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Total Liabilities | 591,767 |
| 591,959 |
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Stockholders' Equity |
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Common stock - authorized, 400,000,000 shares of $.00001 par value; issued and outstanding, 214,999,945 and 212,949,945 shares, respectively | 2,150 |
| 2,129 |
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Additional paid in capital | 7,234,815 |
| 7,204,086 |
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Accumulated deficit | (6,505,768) |
| (6,435,968) |
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Total American International Ventures, Inc. stockholders equity | 731,197 |
| 770,247 |
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Non controlling interest | (26,764) |
| (28,088) |
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Total stockholders' equity | 704,433 |
| 742,159 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ 1,296,200 |
| $ 1,334,118 |
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The accompanying notes are an integral part of these financial statements.
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AMERICAN INTERNATIONAL VENTURES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||
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| Three Month Periods Ended August 31, |
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| 2015 |
| 2014 |
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Sales | $ - |
| $ 18,188 |
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Cost of goods sold | - |
| 12,265 |
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Gross profit | - |
| 5,923 |
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Administrative expenses | 59,212 |
| 308,569 |
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Operating loss | (59,212) |
| (302,646) |
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Other Income and Expense: |
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Revaluation of warrants | - |
| 27,750 |
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Gain on sale of mining claims | - |
| 1,500 |
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other income | - |
| 40 |
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Interest expense | (9,264) |
| (14,679) |
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Total other income and (expense) | (9,264) |
| 14,611 |
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Net loss before taxes | (68,476) |
| (288,035) |
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Provision for income taxes | - |
| 11,277 |
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Net Loss | (68,476) |
| (299,312) |
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Net loss attributable to non controlling interest | (1,324) |
| 7,996 |
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Net loss attributable to American International Ventures, Inc. | (69,800) |
| (291,316) |
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Other comprehensive income |
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Exchange rate changes | - |
| (1,082) |
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Attributable to non controlling interest | - |
| 162 |
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Net other comprehensive income | - |
| (920) |
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Total Comprehensive loss | $ (68,476) |
| $ (300,394) |
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Net Loss Per Share basic and diluted | $ - |
| $ - |
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Weighted Average Number of Shares Outstanding | 214,888,532 |
| 207,829,827 |
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The accompanying notes are an integral part of these financial statements.
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AMERICAN INTERNATIONAL VENTURES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||
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| Three Month Periods Ended August 31, | ||
| 2015 |
| 2014 |
Cash Flows From Operating Activities: |
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Net loss | $ (68,476) |
| $ (299,312) |
Adjustments to reconcile net loss to net cash consumed by operating activities: |
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Charges not requiring an outlay of cash: |
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Depreciation | 25,581 |
| 11,678 |
Equity items issued for services | 30,750 |
| 197,300 |
Interest charge related to debt discount | - |
| 267 |
Revaluation of warrants | - |
| (27,750) |
Gain on sale of mining claims | - |
| (1,500) |
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Changes in assets and liabilities: |
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Increases (decreases) in accounts payable and accrued expenses | (1,179) |
| - |
Increases (decrease) in tax liability | (6,957) |
| 17,676 |
Decreases in misc A/R | 958 |
| 35,736 |
Decrease in inventories | - |
| 12,265 |
Net cash consumed by operating activities | (19,323) |
| (53,640) |
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Cash Flows From Investing Activities: |
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Purchase of fixed assets | - |
| - |
Net cash consumed by investing activities | - |
| - |
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Cash Flows From Financing Activities: |
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Proceeds of convertible notes | - |
| - |
Proceeds of shareholder loans | 10,000 |
| 51,000 |
Payments on notes payable | (2,056) |
| (2,899) |
Net Cash provided by financing activities: | 7,944 |
| 48,101 |
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Effect on cash of exchange rate changes | - |
| (198) |
Net change in cash | (11,379) |
| (5,737) |
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Cash balance, beginning of period | 22,121 |
| 12,862 |
Cash balance, end of period | $ 10,742 |
| $7,125 |
The accompanying notes are an integral part of these financial statements.
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AMERICAN INTERNATIONAL VENTURES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2015
(Unaudited)
1. BASIS OF PRESENTATION
The unaudited interim consolidated financial statements of American International Ventures, Inc. ("the Company") as of August 31, 2015 and for the three month periods ended August 31, 2015 and 2014 have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations for the three month period ended August 31, 2015 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, 2016.
Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended May 31, 2015.
2. BACKGROUND
On March 23, 2012, the Company entered into a share exchange agreement with Placer Gold Prospecting, Inc. (PGPI), a Company that was formed on January 25, 2012. This share exchange agreement was treated as a reverse recapitalization, under which the legal acquiree (Placer) was treated as the accounting acquirer and the equity accounts of the Company were adjusted to reflect a reorganization. Inasmuch as Placer was treated as the accounting acquireor, whenever historical financial information is presented, it is Placer information.
On May 3, 2013, the Company formed a subsidiary in Baja, California. It remained inactive until June 1, 2013 at which time it became operational, on a limited basis. A problem with the mining permit caused suspension of mining activities in May 2014. The Company is working to resolve that problem.
3. GOING CONCERN AND LIQUIDITY
As shown in the accompanying financial statements, the Company has experienced losses since its inception. It also had a working capital deficiency at August 31, 2015 and presently does not have sufficient resources to meet its outstanding liabilities or accomplish its objectives during the next twelve months. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The 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.
4. DEBT OBLIGATIONS
On August 31, 2014, the Company defaulted on its obligation for $25,000 of convertible notes.
5. WARRANT LIABILITY
During the year ended May 31, 2013, the Company issued 2,715,000 warrants to an investment banker, which had "full-ratchet anti-dilution protection". In accordance with pronouncements of the Financial Accounting Standards Board, these warrants have been classified as liabilities. They will be periodically revalued by use of a Black Sholes valuation model. Changes in the value will be recorded on the statement of operations. During the three month periods ended August 31, 2015 and 2014, the value was reduced by $0 and $27,750, respectively.
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AMERICAN INTERNATIONAL VENTURES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2015
(Unaudited)
6. CAPITAL STOCK
The following is a summary of stock activity during the quarter:
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| Shares |
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Balance May 31, 2015 | 212,949,945 |
| $7,206,215 |
Shares issued for services | 2,050,000 |
| 30,750 |
Balance August 31, 2015 | 214,999,945 |
| 7,236,965 |
7. SUPPLEMENTARY CASH FLOW INFORMATION
There was $ 6,169 and $3,150, respectively cash paid for interest for the three month periods ended August 31, 2015 and August 31, 2014; there was no cash paid for income taxes during either of the three month periods.
On June 16, 2014, the Company sold El Tule Canyon mining claim and the remainder of the Gypsy claim for 1,500,000 shares of restricted common stock of the buyer; these shares were valued at $1,500. This brought to 6,500,000 the number of shares were owned by the Company. Subsequent sales reduced the number of share to 6,380,000.
8. WARRANTS
There were 2,715,000 warrants outstanding at August 31, 2015, as presented below:.
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Number of Warrants |
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| Weighted Life (in Years) |
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2,715,000(A) |
| $ .125 |
| 2.96 |
These warrants were principally issued for services. They were valued using a Black Scholes valuation model.
9. RELATED PARTY TRANSACTIONS
During the three month period ended August 31, 2015, the Company issued 2,050,000 shares (valued at $30,750) to its directors and officers.
The Company received shareholder loans during the quarter that totaled $10,000.
10. SUBSEQUENT EVENTS
In October 15, 2015, the Company entered into a Purchase Agreement with its wholly owned subsidiary Mega Mines, Inc. ("Mega Mines") pursuant to which the Company sold to Mega Mines its 85% interest in AIVN de Mexico S.A. de C.V. ("AIVN"), which owns the mining concessions known as "La Sorpresa". Closing under the Purchase Agreement is subject to payment, on or before December 15, 2015, by Mega Mines to the Company of $500,000 and delivery to the Company of 10,000,000 shares of Mega Mines common stock.
In connection with the Purchase Agreement, the four existing notes evidencing $950,000 of indebtedness of AIVN to the Company were replaced on October 15, 2015 by a Promissory Note Based on Income (the "New Note") dated October 8, 2015 by AIVN and Mega Mines, as co-borrowers, in favor of the Company. The New Note is to be repaid by 20% of AIVN's net income from sale of all precious metals after mining production begins. The New Note is secured by all equipment and all mining concessions as of October 15, 2015. Refer to Company's 8-K filing.
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Forward Looking Statements and Cautionary Statements .
Certain of the statements contained in this Quarterly Report on Form 10-Q includes "forward looking statements." All statements other than statements of historical facts included in this Form 10-Q regarding the Company's financial position, business strategy, and plans and objectives of management for future operations and capital expenditures, and other matters, are forward looking statements. These forward-looking statements are based upon management's expectations of future events. Although the Company believes the expectations reflected in such forward looking statements are reasonable, there can be no assurances that such expectations will prove to be correct. Additional statements concerning important factors that could cause actual results to differ materially from our expectations ("Cautionary Statements") are disclosed in the Cautionary Statements section and elsewhere in the Companys Form 10-K for the period ended May 31, 2015. Readers are urged to refer to the section entitled Cautionary Statements and elsewhere in the Companys Form 10-K for a broader discussion of these statements, risks, and uncertainties. These risks include the Companys limited operations and lack of revenues. In addition, the Companys auditor, in his audit report for the fiscal year ended May 31, 2015, has expressed a going concern opinion about the future viability of the Company. All written and oral forward looking statements attributable to the Company or persons acting on the Companys behalf subsequent to the date of this Form 10-Q are expressly qualified in their entirety by the referenced Cautionary Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
During the three month period ended August 31, 2015, the Company had no revenue, as its Mexican mining operations were suspended during the second quarter of 2014. Revenue of $18,188 was realized in the same period of 2014. These revenues were derived from mining activity of the Company subsidiary, AIVN de Mexico. Cost of goods sold, consisting of mining, milling and personnel costs, was $12,265 during the three month period ended August 31, 2014.
Gross profit for the 2014 three month period was $5,923.
Administrative expenses for the three months ended August 31, 2015 were $59,212 compared to $308,569 for the comparable period of 2014. Administrative expenses consist primarily of consulting fees, director awards and other services compensated with equity items. The reduction in administrative costs for the current period is due principally to a reduction in such compensation.
The Company had an operating loss in the current three month period of $59,212, compared with an operating loss of $302,646 for the comparable period in 2014. The decrease is primarily due to the expense reduction described above.
Interest expense in the current three month period was $9,264 compared with $14,679 in the comparable period of 2014. Interest expense accrues on outstanding debt obligations, which were lower in the 2015 period.
The Company has a warrant issuance that is considered a derivative security. The Company realizes income from reductions in its liability for these warrants. There was a liability reduction of $27,750 in the 2014 period and none in the 2015 period.
Net loss for the current three month period was $68,476 compared with a net loss of $291,316 in the comparable period of 2014. The favorable change is due to factors discussed above.
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Since the acquisition of PGPI, our operations have focused on developing, planning and operating past producing precious metal properties and mines. Specifically, we are now a gold and silver exploration and extraction company, operating primarily in Baja California, Mexico, and Nevada. We will focus on acquiring gold and base mineral resource properties that historically produced gold and silver until 1942 when all gold production in the United States was halted due to World War II. There is no guarantee that such properties will produce gold or silver in the future or that these properties may have already been depleted, as they were previously mined.
None of our properties or claims has any proven or probable reserves and all of our activities undertaken and currently proposed are exploratory in nature.
As of August 31, 2015, the Company had a working capital deficit of $519,573, compared with a working capital deficit of $505,233 as of May 31, 2015. The increase in the working capital deficit is principally due to a reduction in the cash balance, partially offset by an increase in advances from shareholders.
The Company has projected that its administrative overhead for the next 12 months will be approximately $185,000 which consists of accounting fees (including tax, audit and review) in the approximate amount of $45,000, legal fees in the approximate amount of $40,000, and miscellaneous expenses of $100,000. The projected legal and accounting fees relate to the Companys reporting requirements under the Securities Exchange Act of 1934. The Company expects to incur additional legal and accounting fees in order to effect acquisitions and share exchanges or a business combination transaction. The Company has no other capital commitments. To continue its business plan, the Company will be required to raise additional funds through the private placement of its capital stock or through debt financing to meet its ongoing corporate overhead obligations. If the Company is unable to meet its corporate overhead obligations, it will have a material adverse impact on the Company and the Company may not be able to complete its plan of operations of finding a suitable business acquisition or combination candidate.
Please refer to the Companys Form 10-K for the period ending May 31, 2015 for a discussion of other risks attendant to its proposed plan of operations of effecting a business acquisition or combination, including the occurrence of significant dilution and a change of control. Even if successful in effecting a business acquisition or combination, it is likely that numerous risks will exist with respect to the new entity and its business.
Off-Balance Sheet Arrangements
We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues and results of operations, liquidity or capital expenditures
Significant Accounting Policies
a. 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.
b. Fair Value of Financial Instruments
The carrying amounts of the Companys financial instruments, which include cash equivalents, and accrued liabilities, approximate their fair values at August 31, 2015.
c. Loss (Income) Per Share
Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders for the period by the weighted average number of shares outstanding. During periods when a net loss has occurred, as was the case in the three month period ended August 31, 2015, outstanding options and warrants are excluded from the calculation of diluted loss per share as their inclusion would be anti-dilutive.
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d. Income Taxes
The Company accounts for income taxes in accordance with current accounting guidance, 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, and consideration of net operating loss carry forwards, 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.
e. Marketable Securities
Marketable securities, when owned, are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on these securities are recognized as direct increases or decreases in accumulated other comprehensive income.
f. 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.
g. 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.
h. Advertising Costs
The Company expenses advertising costs when the advertisement occurs. There was no advertising expense in the three month period ended August 31, 2015.
i. Segment Reporting
The Company is organized in one reporting and accountable segment.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not Applicable. Smaller Reporting Companies are not required to provide the information required by this item.
Item 4. Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer (one and the same person), we undertook an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934, Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that such disclosure controls and procedures were not effective to ensure (a) that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (b) that information required to be disclosed is accumulated and communicated to management to allow timely decisions regarding disclosure.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the quarter ended August 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors.
Smaller Reporting Companies are not required to provide the information required by this item.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds. Bob please correct
There were 750,000 shares of Company common stock issued during the three month period ended August 31, 2015 as compensation to officers and directors.
Each officer and director is an accredited investor and agreed to hold such shares for investment purposes. In addition, the issued shares contained restricted legends. All of the securities issuances referred to above were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the Act) or the rules and regulations promulgated there under, including Regulation D and Rule 701.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
None
Item 5. Other Information.
See note 10 to the financial statements.
Item 6. Exhibits
(a) Exhibits Furnished.
Exhibit #31.1 Certification Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit #31.2 Certification Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit #32 Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002.
The following exhibits contain information from our Quarterly Report on Form 10-Q for the quarter ended August 31, 2015 formatted in Extensible Business Reporting Language (XBRL):
Exhibit #101.INS XBRL Instance Document
Exhibit #101.SCH XBRL Taxonomy Schema Document
Exhibit #101.CAL XBRL Taxonomy Calculation Linkbase Document
Exhibit #101.DEF XBRL Taxonomy Extension Definition Linkbase
Exhibit #101.LAB XBRL Taxonomy Label Linkbase Document
Exhibit #101.PRE XBRL Taxonomy Presentation Linkbase Document
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AMERICAN INTERNATIONAL VENTURES, INC.
(Registrant)
By: /s/ Jack Wagenti
___________________________________
Jack Wagenti
Chairman, President and Chief Financial Officer
(Principal Executive Officer and Principal Financial Officer)
Date: November 10, 2015
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