UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment #3
FORM 10-QSB /A
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended January 31, 2008
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[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
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Commission File Number 333-119848
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AAA ENERGY, INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 90-0338080
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3841 Amador Way
Reno, Nevada 89502
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (775) 827-2324
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ X ] Yes [ ] No
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
[ X ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 34,272,000 shares of $0.001
par value common stock outstanding as of March 14, 2008
AAA ENERGY INC.
(AN EXPLORATION STAGE COMPANY)
FINANCIAL STATEMENTS
JANUARY 31, 2008
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
AAA ENERGY INC.
(An Exploration Stage Company)
BALANCE SHEETS
(unaudited)
January 31, July 31,
2008 2007
ASSETS
Current
Cash $82,388 $114,425
Prepaid expenses 28,875 -
Due from related parties 315 -
Total Assets $111,578 $114,425
LIABILITIES
Current
Accounts payable and accrued
liabilities $41,577 $46,333
Convertible Note (Note 3) 137,974 58,063
Total Liabilities 179,551 104,396
STOCKHOLDERS' EQUITY
Common Stock
Authorized:
100,000,000 common shares
$0.001 par value Issued:
34,272,000 common shares
(July 31, 2007 - 34,272,000
shares) 34,272 34.272
Additional Paid-in Capital 334,535 234,535
Deficit accumulated during the
exploration stage (436,780) (258,778)
Total Stockholders' (Deficit) Equity (67,973) 10,029
Total Liabilities and Stockholders'
(Deficit) Equity $111,578 $114,425
The accompanying notes are an integral part of these financial statements.
AAA ENERGY INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
Cumulative
From
May 26,
Three Six 2004 -
months ended months ended (Inception)
January 31, January 31, to January
2008 2007 2008 2007 31, 2008
EXPENSES
Accounting and audit
fees $5,103 $3,743 $13,578 $5,873 $50,589
Bank charges 115 191 253 253 827
Consulting fees 16,861 1,391 29,026 21,151 88,409
Filing and transfer
agent fees - 1,044 250 1,474 7,748
Interest expense
(Note 3) 50,035 2,073 79,911 2,073 127,281
Investor relation - - - - 19,350
Legal fees - - 2,500 - 19,530
Mineral property costs
(Note 2) 5,000 - 5,000 - 17,500
Mineral property
exploration costs 2,867 - 11,005 - 11,005
Office expenses 7,000 690 9,983 2,190 18,244
Travel and promotion 14,226 14,233 26,496 22,848 76,297
NET LOSS (101,207) (23,365) (178,002 (55,862) (436,780)
BASIC AND DILUTED LOSS
PER SHARE $(0.00) $(0.00) $(0.01) $(0.00)
WEIGHTED AVERAGE NUMBER
OF SHARES
OUTSTANDING - 34,272,000 34,272,000 34,272,000 34,727,000
BASIC AND DILUTED
The accompanying notes are an integral part of these financial statements.
AAA ENERGY INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
Cumulative
From
Six May 26, 2004
months ended (Inception) to
January 31, January 31,
2008 2007 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(178,002) $(55,862) $(436,780)
Non cash items:,
Interest expense 79,911 2,073 127,281
Shares issued for mineral
property costs - - 500
Change in non-cash working
capital item:
Prepaid expenses (28,875) - (28,875)
Accounts payable and accrued
liabilities (4,756) 9,300 41,577
Due to related parties (315) - (315)
NET CASH USED IN OPERATIONS (132,037) (44,489) (296,612)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital stock issued for cash - - 94,000
Convertible Note 100,000 50,000 285,000
NET CASH (USED IN) FROM FINANCING
ACTIVITIES 100,000 50,000 379,000
INCREASE (DECREASE) IN CASH (32,037) 5,511 82,388
CASH, BEGINNING 114,425 60,910 -
CASH, ENDING $82,388 $66,421 $82,388
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest - - -
Income taxes - - -
Non cash item:
Shares issued for acquisition
of mineral - - $500
property
The accompanying notes are an integral part of these financial statements..
Note 1 Basis of presentation
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been prepared
in accordance with United States generally accepted accounting principles
("US GAAP") for interim financial information and with the instructions to
Form 10-QSB of Regulation S-B. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with US GAAP have been condensed or omitted pursuant to such
rules and regulations. However, except as disclosed herein, there have
been no material changes in the information disclosed in the notes to the
financial statements for the year ended July 31, 2007 included in the
Company's annual report filed with the Securities and Exchange Commission.
The interim unaudited financial statements should be read in conjunction
with those financial statements included in the Form 10-KSB. In the
opinion of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been
made. Operating results for the six months ended January 31, 2008 are not
necessarily indicative of the results that may be expected for the year
ending July 31, 2008.
Note 2 Advance
During the period ending January 31, 2008, the Company advanced a
consultant $28,875. The advance is to be used to investigate and secure
projects in China
Note 3 Convertible Note
On November 8, 2007, a Lender advanced to the Company, as a part of a
Note agreement an additional amount of $100,000. All such amounts advanced
under the Note will comprise the principal amount which bears interest at
10% per annum and matures on January 11, 2009. The principal amount will
be subject to conversion terms, where by at any time from the date of the
Note until the date that the Company repays the entire amount of principal
to the Lender, the lender at its sole option, may convert a portion, or
all, of the principal amount outstanding into units in the capital stock
of the Company. Each $0.40 of principal outstanding at the time of
conversion may be converted into one unit consisting of one common share
and one non-transferable share purchase warrant exercisable for a period
of up to two years from the date of conversion. Each warrant shall
entitle the Lender to purchase an additional common share of the Company
at $0.60 during the term of warrants.
Note 3 Mineral Property
At August 4, 2007, the Company was granted an option to acquire 100%
interest, subject to a 2% net smelter royalty, in one mineral claim
located in the Lillooet Mining Division in the Province of British
Columbia, Canada. Uner the terms of the option agreement, the Company must
make cash payment of $255,000 CAD and issue 500,000 shares of common stock
in various stages as follows:
Cash Payment Number of
Option Exercise Schedule (CAD) common shares
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Upon signing of agreement $5,000(paid) Nil
First anniversary of agreement $30,000 100,000
Second anniversary of agreement $40,000 100,000
Third anniversary of agreement $50,000 100,000
Fourth anniversary of agreement $60,000 100,000
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Total $255,000 500,000
The company must also pay 2% net smelter returns for royalty ("NSR") upon
commencement of commercial production. The Company may purchase half of
the 2% NSR for on-time payment of $1,000,000 CAD.
During the quarter ended January 31, 2008, the Company decided not to
pursue further on this option agreement
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks
and uncertainties. We use words such as anticipate, believe, plan, expect,
future, intend and similar expressions to identify such forward-looking
statements. You should not place too much reliance on these forward-looking
statements. Our actual results are likely to differ materially from those
anticipated in these forward-looking statements for many reasons, including
the risks faced by us described in this Risk Factors section and elsewhere in
this annual report.
PLAN OF OPERATION
We commenced operations as a company involved in the acquisition and
exploration of resource properties. During the fiscal year ended July 31,
2005, we held a 100% interest in five mineral claims comprising the BA
property. During the fiscal year ended July 31, 2006, our interest in the BA
property lapsed.
We are continuing to review potential acquisitions in the resource sector.
Currently, we are in the process of completing due diligence investigation of
various opportunities in the base and precious metals sectors in China
Specifically, during the quarter, the Company undertook various due diligence
trips to China to field visit and commence negotiations on various molybdenum
prospects located in the Guangdong, Henan and Shaanxi Provinces. However, there
is no guarantee that we will be able to reach any agreement to acquire such
assets.
On August 4, 2007, the Company was granted an option to acquire 100%
interest, subject to a 2% net smelter royalty, in one mineral claim
located in the Lillooet Mining Division in the Province of British
Columbia. Under the terms of the option agreement, the Company must make
cash payment of CDN$255,000 and issue 500,000 shares of common stock in
various stages as follows: CDN$5,000 (paid) upon signing of the agreement,
CDN$30,000 and issuance of 100,000 shares of common stock by the first
anniversary of this agreement; CDN$40,000 and 100,000 shares by the second
anniversary of this agreement; CDN$50,000 and issuance of 100,000 shares
by the third anniversary of this agreement; CDN$60,000 and issuance of
100,000 shares by the fourth anniversary of this agreement; and CDN$70,000
and issuance of 100,000 shares by the fifth anniversary of this agreement.
The Company must also pay 2% Net Smelter Returns Royalty ("NSR") upon
commencement of commercial production. The Company may purchase half of
the 2% NSR for a one-time payment of $1,000,000. During the quarter, in
light of exploration logistics and access issues relating to this mineral
property and the Company's focus on its Chinese molybdenum prospects, the
Company has announced its intent to drop its interest in this prospect.
We anticipate spending an additional $35,000 on administrative fees, including
fees we will incur in complying with reporting obligations.
The Company has previously announced that it was proceeding with the sale of up
to $1,000,000 in convertible debentures to finance potential acquisition of
natural and mineral resource projects and for working capital requirements,
including administrative expenses and costs incurred in connection with our
review of potential projects. Although upon the completion of the convertible
debenture financing, we will have sufficient funds for any immediate working
capital needs, additional funding may still be required in the form of equity
financing from the sale of our common stock. However, we do not have any
arrangements in place for any future equity financing.
RESULTS OF OPERATIONS FOR PERIOD ENDING JANUARY 31, 2008
We did not earn any revenues during the three-month period ending January 31,
2008. We incurred operating expenses in the amount of $101,207 for the three-
month period ending January 31, 2008. Our operating expenses were comprised of
travel and promotion costs of $14,226, consulting fees of $16,861, mineral
property costs of $5,000, mineral property exploration costs of $2,867,
accounting and audit fees of $5,103, office expenses of $7,000, interest
expense of $50,035, and bank charges of $115.
At January 31, 2008, we had total assets of $112,578 consisting of cash of
$82,388, advance of $28,875 and due from related parties of $315 and
$179,551 in liabilities consisting of accounts payable and accrued liabilities
of $41,577 and $137,974 pursuant to a convertible note.
ITEM 3: CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
Our management evaluated the effectiveness of our disclosure controls and
procedures as of the end of our fiscal quarter on January 31, 2008. This
evaluation was conducted by our chief executive officer, Dr. Earl Abbott, and
our principal accounting officer, David Lorge.
Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to disclose in the reports we file
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.
LIMITATIONS ON THE EFFECTIVE OF CONTROLS
Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs. These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control. A
design of a control system is also based upon certain assumptions about
potential future conditions; over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate. Because of the inherent limitations in a cost-
effective control system, misstatements due to error or fraud may occur and may
not be detected.
CONCLUSIONS
Based upon his evaluation of our controls, our chief executive officer and
principal accounting officer have concluded that, subject to the limitations
noted above, the disclosure controls are effective providing reasonable
assurance that material information relating to us is made known to management
on a timely basis during the period when our reports are being prepared. There
were no changes in our internal controls that occurred during the quarter
covered by this report that have materially affected, or are reasonably likely
to materially affect our internal controls.
PART II- OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. Management is not aware of
any threatened litigation, claims or assessments.
Item 2. Changes in Securities
The Company did not issue any securities during the quarter ended
January 31, 2007.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
Exhibits
31.1 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
31.2 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Current Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DATED: March 14, 2008
AAA Energy, Inc.
/s/ Earl W. Abbott
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Dr. Earl W. Abbott, President
/s/ Dave Lorge
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David Lorge, Director