ITEM
1. DESCRIPTION OF BUSINESS
General
Image
International Group, Inc. (“the Company”) was incorporated in the state of Nevada on July 25, 2005 under the name
Eardley Ventures. On April 21, 2008, the name was changed to Image International Group, Inc. On December 22, 2014, following a
decision by the Company to expand its business focus to include the acquisition of gemstone and other precious mineral resources
and with the goal of dealing directly with wholesale gemstone dealers and possibly jewelry outlets and in order to appropriately
reflect the Company’s more comprehensive and inclusive business plan, the Company changed its name to Image International
Group, Inc. On December 22, 2015 the Company also increased its authorized capital from 100,000,000 common shares to 1,000,000,000
common shares. The Company leases an office at 8105 Birch Bay Square St., Suite 205, Blaine WA 98230
In
December 2012, the Company acquired a group of claims (“cells”) known as the Teako Property. The Teako cells are located
half way between Terrace and Smithers, British Columbia and are near the original gold rush town of Hazelton B.C. which was founded
in 1866, the site of the original gateway and staging area for the famous Omineca Gold rush days of 1869-1873.
Initially,
a total of 20 cells were acquired totaling 296 hectares (approx. 730 acres). After preliminary examination of the area, the Company
came to the conclusion that the area appeared to have significant potential. Therefore, Company management requested that the
Prospector/Vendor stake more cells adjacent or adjoining the original claim group on behalf of the Company. An additional 778
hectares (approx. 1922 acres) were staked, bringing our land package to a total of 1074 hectares, or about 2652 acres. The cells
have good access to many miles of new logging roads that have recently been opened up in the area. The additional cells were staked
on behalf of the Company.
The
Company acquired the initial cells for a cash payment of $10,000 in Canadian funds and 1.5-million restricted shares. The shares
are to be issued pursuant to key events as follows:
1.
150,000 shares issued in the name of the Optionor or his assignees upon the completion of a satisfactory initial geological report
on the claims by a qualified and independent geologist engaged by the Optionee. These shares have now been issued.
2.
150,000 shares issued in the name of the Optionor or his assignees upon completion of initial work program of up to CDN$50,000
and the completion of a satisfactory 43-101 report on the claims conducted or supervised by a qualified and independent geologist.
3.
200,000 shares issued in the name of the Optionor or his assignees upon the completion of a work program costing up to CDN$200,000
showing satisfactory results on the claims by a qualified and independent geologist engaged by the Optionee.
4.
1,000,000 shares issued in the name of the Optionor or his assignees upon successful results of a ten-hole drilling program.
On
March 18, 2014 the Company’s Form S-1 Registration Statement was declared effective by the United States Securities and
Exchange Commission and the Company commenced filing the required Disclosure Reports on From 8-K and its Annual and Quarterly
reports.
Our
initial focus is the exploration and development of the Teako Claims.
Work
conducted on the Teako property in 2013 by independent geologist Linda Caron, confirmed a strong, large alteration and mineralization,
aligning in a northeast –southwest trend over 3.4km (2.1 miles). Alteration includes pervasive carbonate-sericite alteration,
and quartz flooding, and ranges in intensity from weak to very strong. Select grab samples returned grades to 20.98 g/t (0.74
oz/t) Au. Ms. Caron’s summary report has been filed as an exhibit to our Form S-1 filing. The Company needs to raise addition
funding in order to complete a recommended work program on the property. The Company plans to raise up to US$300,000 for exploration
work and general working capital purposes. The private placement will be conducted pursuant to Regulation S and Regulation D of
the Securities Act. The share issuance price will be based on the Company’s 10-day average trading price. The Company has
not had any discussions with any broker-dealers or other persons with regards to its financing plans.
In
November 2014, following extensive research and discussions with an experienced international gemstone and jewelry entrepreneur,
the Company decided to expand its business focus to include the acquisition of precious and semi-precious mineral resources. If
the Company is successful in acquiring and developing such resources, and in being able to acquire precious and semi-precious
mineral resources, or as a by-product of our metal mining, the Company plans to sell such product directly to wholesale jewelry
and gemstone enterprises. Our additional focus for our expansion of interest will be the precious and semi-precious gemstones
of Madagascar. Beginning in 1998, the Company president, Mr. Armstrong spent many months in Madagascar specifically dealing with
gemstones and gemstone mining. In addition to the availability of highly valuable precious stones such as rubies, sapphires and
emeralds, Madagascar is also the source of semi-precious gemstones including, alexandrite, amethyst, aquamarine, chrysoberyl,
citrine, peridot, rose quartz, topaz, tourmaline, tsavorite, garnets and morganite beryl.
On
May 13, 2015, the Company received the trading symbol IMGL from the Financial Industry regulatory Authority (FINRA). The Company
is currently listed on the OTCQB.
During
the year ended March 31, 2016, we were unable to raise the required funding to proceed with further work on the Teako Properties
and have returned the properties to the control of the Optionor. Should this situation change and we are able to raise sufficient
capital, we will renegotiate with the Optionor and proceed with our plans to develop and exploit the claims. We are continuing
to develop our Madagascar-based precious and semi-precious mineral operations.
Website
We
currently maintain a website at www.imageinternationalgroupinc.com.
Revenues
Currently
we have no revenue generating assets.
Competition
We
have numerous small and large mining competitors.
Employees
We
administer our business through consulting arrangements with our company’s officers, directors and other individuals.
Consultants
During
the year ended March 31, 2017, the Company spent $nil on consultants for advisory services.
Offices
We
maintain an office at 8105 Birch Bay Square St., Suite 205, Blaine, Washington 98230.
Item
1A. RISK FACTORS
Risks
Related to Our Business
Investment
in our common stock involves very significant risks.
An
investment in our common stock involves a number of very significant risks. You should carefully consider the following known
material risks and uncertainties in addition to other information in this annual report in evaluating our company and its business
before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be
seriously harmed due to any of the following known material risks. You could lose all or part of your investment due to any of
these risks.
We
will require additional financing in order to commence and sustain exploration.
We
will require significant additional financing in order to maintain an exploration program and an assessment of any commercial
viability of our mineral properties. As our mineral properties do not contain any reserves or any known body of economic mineralization,
we may not discover commercially exploitable quantities of ore on our mineral properties that would enable us to enter into commercial
production, achieve revenues, and recover the money we spend on exploration. Exploration activities on our mineral properties
may not be commercially successful, which could lead us to abandon our plans to develop the property and its investments in exploration.
Additionally, future cash flows and the availability of financing will be subject to a number of variables, including potential
production and the market prices of various minerals including gold, silver and copper. Further, debt financing could lead to
a diversion of cash flow to satisfy debt-servicing obligations and create restrictions on business operations.
We
have not begun the initial stages of exploration of our claims, and thus have no way to evaluate the likelihood whether we will
be able to operate our business successfully
.
We
are a new entrant into the precious minerals exploration and development industry without profitable operating history. We were
incorporated on July 25, 2005 and to date have been involved primarily in organizational activities and obtaining our claims.
As a result, there is only limited historical financial and operating information available on which to base your evaluation of
our performance. We have not earned any revenues and we have never achieved profitability as of the date of this annual report.
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high
rate of failure of such enterprises. The likelihood of success must be considered in the light of problems, expenses, difficulties,
complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These
potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses
that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that our business
will prove successful, and we can provide no assurance to investors that we will generate any operating revenues or ever achieve
profitable operations. If we are unsuccessful in addressing these risks our business will likely fail and you will lose your entire
investment in this offering.
We
have received a going concern opinion from our independent auditors’ report accompanying our March 31, 2017 and 2016 consolidated
financial statements.
The
independent auditors’ report accompanying our March 31, 2017 and 2016 consolidated financial statements contains an explanatory
paragraph expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements
have been prepared assuming that the Company will continue as a “going concern”, which contemplates that we will realize
our assets and satisfy our liabilities and commitments in the ordinary course of business. Our ability to continue as a going
concern is dependent on raising additional capital to fund our operations and ultimately on generating future profitable operations.
There can be no assurance that we will be able to raise sufficient additional capital or eventually have positive cash flow from
operations to address all of our cash flow needs. If we are not able to find alternative sources of cash or generate positive
cash flow from operations, our business will be materially and adversely affected and our shareholders will lose their entire
investment.
If
we are unable to obtain additional funding, our business operations will be harmed and if we do obtain additional financing, our
then existing shareholders may suffer substantial dilution.
There
is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay any indebtedness or that
we will not default on our debt obligations, jeopardizing our business viability. We are continually at risk of default on obligations
to and on behalf of our creditors, requiring ongoing funding, on a monthly basis, to avoid these defaults. Furthermore, we may
not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary
to conduct our business. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if
at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to
conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing
and development plans and without adequate financing or revenue generation, possibly cease our operations. Any additional equity
financing may involve substantial dilution to our then existing shareholders.
We
will need to raise additional capital, which may not be available on acceptable terms or at all.
We
will be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations.
We estimate that our capital requirements in the next twelve months will be approximately $100,000. There can be no assurance
that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital
may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely
be required to curtail our research and development plans. Any additional equity financing may involve substantial dilution to
our then-existing shareholders.
We
currently expect a shortfall in funding of up to $200,000.
The
Company currently expects a shortfall in funding of up to $200,000. Our business depends on raising additional capital to fund
ongoing operations. There can be no assurance that the Company will be able to obtain adequate financing in the future or that
the terms of such financing will be favorable. Failure to obtain such financing could result in a material adverse effect, delay
or indefinite postponement of further exploration and development of our projects with the possible loss of such assets. Further,
any additional financing by the Company may subject existing shareholders to substantial dilution. If the Company is forced to
sell some of its assets in a situation of distress, it may not recover their full value. Each project involves minimum lease payments
and work commitments. In the event the Company is unsuccessful in raising funds in a timely fashion there is a risk project leases
will terminate
We
plan to acquire additional mineral exploration properties, which may create substantial risks.
As
part of our growth strategy, we intend to acquire additional minerals exploration properties. Such acquisitions may pose substantial
risks to our business, financial condition, and results of operations. In pursuing acquisitions, we will compete with other companies,
many of which have greater financial and other resources to acquire attractive properties. Even if we are successful in acquiring
additional properties, some of the properties may not produce revenues at anticipated levels, or failure to develop such prospects
within specified time periods may cause the forfeiture of the lease in that prospect. There can be no assurance that we will be
able to successfully integrate acquired properties, which could result in substantial costs and delays or other operational, technical,
or financial problems. Further, acquisitions could disrupt ongoing business operations. If any of these events occur, it would
have a material adverse effect upon our operations and results from operations.
If
we do not find a joint venture partner for the continued development of our claims, we may not be able to advance exploration
work
.
If
the initial results of an exploration program are successful, we may try to enter a joint venture agreement with a partner for
the further exploration and possible production of our claims. We would face competition from other junior mineral resource exploration
companies who have properties that they deem to be the most attractive in terms of potential return and investment cost. In addition,
if we entered into a joint venture agreement, we would likely assign a percentage of our interest in the claims to the joint venture
partner. If we are unable to enter into a joint venture agreement with a partner, or raise additional financing, we may fail and
you will lose your entire investment in this offering.
Because
of the speculative nature of mineral property exploration, there is substantial risk that no commercially exploitable minerals
will be found and our business will fail.
Exploration
for minerals is a speculative venture necessarily involving substantial risk. We can provide investors with no assurance that
our claims contain commercially exploitable reserves. The exploration work that we intend to conduct on the claims may not result
in the discovery of commercial quantities of gold, silver, copper or other minerals. Problems such as unusual and unexpected rock
formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such
a case, we would be unable to complete our business plan and you would lose your entire investment in this offering.
Because
of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct
our business
.
The
search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. If a hazard
were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets resulting
in the loss of your entire investment in this offering.
The
potential profitability of mining gold properties if economic quantities of gold are found is dependent upon many factors and
risks beyond our control, including, but not limited to:
●
|
unanticipated
ground and water conditions and adverse claims to water rights;
|
|
|
●
|
geological
problems;
|
|
|
●
|
metallurgical
and other processing problems;
|
●
|
the
occurrence of unusual weather or operating conditions and other force majeure events;
|
|
|
●
|
lower
than expected ore grades;
|
|
|
●
|
accidents;
|
|
|
●
|
delays
in the receipt of or failure to receive necessary government permits;
|
|
|
●
|
delays
in transportation;
|
|
|
●
|
labor
disputes;
|
|
|
●
|
claims
by First Nations or other indigenous organizations;
|
|
|
●
|
government
permit restrictions and regulation restrictions;
|
|
|
●
|
unavailability
of materials and equipment; and
|
|
|
●
|
the
failure of equipment or processes to operate in accordance with specifications or expectations.
|
The
risks associated with exploration and development and if applicable, mining as described above could cause personal injury or
death, environmental damage, delays in mining, monetary losses and possible legal liability. We are not currently engaged in mining
operations because we are in the exploration phase and have not yet any proved mineral reserves. We do not presently carry property
and liability insurance nor do we expect to get such insurance for the foreseeable future. Cost effective insurance contains exclusions
and limitations on coverage and may be unavailable in some circumstances.
Because
access to our claims is sometimes restricted by inclement weather, we may be delayed in our exploration and any future mining
efforts.
Access
to the claims may be restricted to the period between March and November of each year due to snow in the area. As a result, any
attempts to visit, test, or explore the property may be limited to these months of the year when weather permits such activities.
These limitations can result in delays in exploration efforts, as well as mining and production in the event that commercial amounts
of minerals are found. Such delays can result in our inability to meet deadlines for exploration expenditures. This could cause
our business venture to fail and the loss of your entire investment in this offering unless we can meet deadlines.
The
gold exploration and mining industry is highly competitive and there is no assurance that we will be successful in acquiring additional
claims or leases.
The
gold exploration and mining industry is intensely competitive, and we compete with other companies that have greater resources.
Many of these companies not only explore for and produce gold or other minerals, but also market gold and other products on a
regional, national or worldwide basis. These companies may be able to pay more for productive gold properties and exploratory
prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources
permit. In addition, these companies may have a greater ability to continue exploration activities during periods of lower gold
market prices. Our larger competitors may be able to absorb the burden of present and future federal, provincial state, local
and other laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to
acquire additional properties and to discover productive prospects in the future will be dependent upon our ability to evaluate
and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have
fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory
prospects and producing gold properties.
The
marketability of natural resources will be affected by numerous factors beyond our control.
The
marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control.
These factors include market fluctuations in commodity pricing and demand, the proximity and capacity of natural resource markets
and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of
gold and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination
of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.
Gold
mining operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess
of those anticipated.
If
economic quantities of gold are found on any claims owned by the Company in sufficient quantities to warrant mining operations,
such mining operations are subject to federal, provincial, state and local laws relating to the protection of the environment,
including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Mining
operations are also subject to federal, provincial, state, and local laws and regulations which seek to maintain health and safety
standards by regulating the design and use of mining methods and equipment. Various permits from government bodies are required
for mining operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed
by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities.
Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus
resulting in an adverse effect on the Company. Additionally, we may be subject to liability for pollution or other environmental
damages which we may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been
required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future
and this may affect our ability to expand or maintain our operations.
Our
ability to function as an operating mining company is dependent on our ability to mine our properties at a profit.
Our
ability to operate on a positive cash flow basis is dependent on mining sufficient quantities of gold at a profit sufficient to
finance our operations and for the acquisition and development of additional mining properties.
Because
we have limited capital, inherent mining risks pose a significant threat to us.
Because
we are small with limited capital, we are unable to withstand significant losses that can result from inherent risks associated
with mining, including environmental hazards, industrial accidents, flooding, interruptions due to weather conditions and other
acts of nature. Such risks could result in damage to or destruction of any infrastructure or production facilities we may develop,
as well as to adjacent properties, personal injury, environmental damage and delays, causing monetary losses and possible legal
liability.
More
stringent federal, provincial or state regulations could adversely affect our business.
If
we are unable to obtain or maintain permits or water rights for development of our properties or otherwise fail to manage adequately
future environmental issues, our operations could be materially and adversely affected. Mining and mining exploration companies
in the Province of British Columbia, Canada are governed by Chapter 53: Part 5 (Remediation of Mineral Exploration Sites of the
British Columbia Environment Management Act. The Act covers all aspects of mining and related activities and establishes strict
environmental protection codes over these activities. Essentially, the Act requires mine owners and operators to prevent the release
of any substance into the land air or water that might be deleterious to the environment and requires the remediation of all mineral
exploration sites and mines by the mine owner or operator. We have spent a considerable amount of managerial and consultant time
to ascertain what is required, to comply with environmental protection laws, regulations and permitting requirements and we anticipate
that we will be required to continue to do so in the future. Although we believe our properties comply in all material respects
with all relevant permits, licenses and regulations pertaining to worker health and safety as well as those pertaining to the
environment and the historical trend toward stricter environmental regulation may continue.
The
volatility of gold prices makes our business uncertain.
The
volatility of gold prices makes long-range planning uncertain and raising capital difficult. The price of gold is affected by
numerous factors beyond our control, including political and economic conditions, legislation and costs of production of our competitors.
Our
inability to obtain insurance would threaten our ability to continue in business.
We
currently have do not liability and property damage insurance. It should be noted that if we decide to obtain such insurance,
the insurance industry is undergoing change and premiums are being increased. If premiums should increase to a level we cannot
afford, we could be forced to discontinue business.
If
we cannot add reserves to replace future production, we would not be able to remain in business.
Our
future gold production if any, cash flow and income are dependent upon our ability to mine our current properties and acquire
and develop additional reserves. There can be no assurance that our properties will be placed into production or that we will
be able to continue to find and develop or acquire additional reserves.
Competition
from better-capitalized companies affects prices and our ability to acquire properties and personnel.
There
is global competition for gold properties, capital, customers and the employment and retention or qualified personnel. In the
production and marketing of gold there are numerous major producing entities, some of which are government controlled and all
of which are significantly larger and better capitalized than we are.
Mineral
exploration, development and mining are subject to environmental regulations which may prevent or delay the commencement or continuance
of our operations.
Mineral
exploration and development and future potential gold mining operations are or will be subject to federal, provincial, state,
and local laws and regulations relating to improving or maintaining environmental quality. Our operations are also subject to
many environmental protection laws. Environmental laws often require parties to pay for remedial action or to pay damages regardless
of fault. Environmental laws also often impose liability with respect to divested or terminated operations, even if the operations
were terminated or divested of many years ago. Future potential gold mining operations and current exploration activities are
or will be subject to extensive laws and regulations governing prospecting, development, production, exports, taxes, labor standards,
occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species,
mine safety, toxic substances and other matters.
Mining
is subject to risks and liabilities associated with pollution of the environment and disposal of waste products occurring as a
result of mineral exploration and production.
Mining
is also subject to risks and liabilities associated with pollution of the environment and disposal of waste products occurring
as a result of mineral exploration and production. Compliance with these laws and regulations will impose substantial costs on
us and will subject us to significant potential liabilities. Costs associated with environmental liabilities and compliance are
expected to increase with the increasing scale and scope of operations and we expect these costs may increase in the future. We
believe that our operations comply, in all material respects, with all applicable environmental regulations. However, we are not
fully insured against possible environmental risks at the current date.
Any
change to government regulation or administrative practices may have a negative impact on our ability to operate and potential
profitability.
The
laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in Canada
or the United States or any other applicable jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally
alter our ability to carry on business. The actions, policies or regulations, or changes thereto, of any government body or regulatory
agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative
impact on our ability to operate and/or our profitably.
We
may be unable to retain key employees or consultants or recruit additional qualified personnel.
Our
limited personnel means that we would be required to spend significant sums of money to locate and train new employees in the
event any of our employees resign or terminate their employment with us for any reason. Further, we do not have key man life insurance
on any of our employees. We may not have the financial resources to hire a replacement if any of our officers were to die. The
loss of service of any of these employees could therefore significantly and adversely affect our operations.
Our
officers and directors may be subject to conflicts of interest involving their available time.
One
of our executive officers and directors Mr. Armstrong serves on a part-time basis. Mr. Low, the Company’s Chief Financial
Officer and a Director works as a Chief Financial Officer for other companies. From time to time, Mr. Armstrong, the Company’s
President, Secretary and a Director may occasionally devote part of his working time in a part-time, short-term advisory relationship
with other corporate entities and will have short-term, part-time responsibilities to these other entities. In Mr. Armstrong’s
case, such responsibilities will include the preparation of and assistance with the preparation of corporate documents and agreements,
assistance with legal and regulatory documents, assistance with required legal and regulatory filings, assistance with the preparation
and filing of quarterly and annual reports, disclosure forms and news releases. Mr. Low’s possible duties as CFO to other
companies will include working as the bookkeeper assisting with the keeping of the books of account and assisting with the preparation
of financial statements These potential relationships do not include advising or making decisions on business opportunities that
might conflict with the Company’s business. None of our executive officers and directors is engaged in other businesses
that present any potential for conflict of interest.
Under
Nevada law, our articles of incorporation and our Bylaws permit us broad indemnification powers.
Under
Nevada law, our articles of incorporation and our Bylaws permit us broad indemnification powers to all persons against all damages
incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor
judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers
and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
Risks
Related to Our Common Stock
While
we are listed or quoted on the OTCQB there may never be a viable market for our stock.
There
may never be a market for our stock and shares held by our shareholders may have little or no value. Even though our shares are
quoted for sale, buyers may be insufficient in numbers to allow for a robust market and it may prove impossible to sell your shares.
Even
if a market for our shares develops, sales of a substantial number of shares of our common stock into the public market by certain
stockholders may result in significant downward pressure on the price of our common stock and could affect your ability to realize
the current trading price of our common stock.
The
trading price of our common stock may fluctuate significantly and stockholders may have difficulty reselling their shares.
Additional
issuances of equity securities may result in dilution to our existing stockholders. Our Articles of Incorporation authorize the
issuance of 1,000,000,000 shares of common stock.
Our
common stock is subject to the “penny stock” rules of the SEC.
Our
common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited,
which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Because
our stock is not traded on the NASDAQ National Market or the NASDAQ Small Cap Market and because the market price of the common
stock is less than $5.00 per share, the common stock is classified as a “penny stock. The Securities and Exchange Commission
has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any
equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject
to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
That
a broker or dealer approve a person’s account for transactions in penny stocks; and
The
broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of
the penny stock to be purchased.
In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
Obtain
financial information and investment experience objectives of the person; and
Make
a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge
and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission
relating to the penny stock market, which:
●
|
Sets
forth the basis on which the broker or dealer made the suitability determination; and;
|
|
|
●
|
That
the broker or dealer received a signed, written agreement from the investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make
it more difficult for investors to dispose of our common stock and may cause a decline in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to
be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny
stocks.
A
decline in the future price of our common stock could affect our ability to raise further working capital and adversely impact
our operations.
A
majority of our directors and officers reside outside the United States, with the result that it may be difficult for investors
to enforce, within the United States, any judgments obtained against us or any of our directors or officers.
Investing
in our Common Stock will provide you with an equity ownership in a mineral resource company. As one of our stockholders, you will
be subject to risks inherent to our business. The trading price of your shares will be affected by the performance of our business
relative to, among other things, competition, market conditions and general economic and industry conditions. The value of your
investment may decrease, resulting in a loss. You should carefully consider the following factors as well as other information
contained in this annual report before deciding to invest in shares of our common stock.
The
factors identified below are important factors that could cause actual results to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, the Company. Where any such forward-looking statement includes a statement
of the assumptions or bases underlying such forward-looking statement, we caution that, while we believe such assumptions or bases
to be reasonable and make them in good faith, assumed facts or bases almost always vary from actual results, and the differences
between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward-looking
statement, the Company, or its management, expresses an expectation or belief as to the future results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation
or belief will result, or be achieved or accomplished. Taking into account the foregoing, the following are identified as important
risk factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by,
or on behalf of, the Company.
We
are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging
growth companies will make our common stock less attractive to investors.
The
JOBS Act permits “emerging growth companies” like us to rely on some of the reduced disclosure requirements that are
already available to companies having a public float of less than $75 million, for as long as we qualify as an emerging growth
company. During that period, we are permitted to omit the auditor’s attestation on internal control over financial reporting
that would otherwise be required by the Sarbanes-Oxley Act. Companies with a public float of $75 million or more must otherwise
procure such an attestation beginning with their second annual report after their initial public offering. For as long as we qualify
as an emerging growth company, we are also excluded from the requirement to submit “say-on-pay”, “say-on-pay
frequency” and “say-on-parachute” votes to our stockholders and may avail ourselves of reduced executive compensation
disclosure compared to larger companies. In addition, as described in the following risk factor, as an emerging growth company
we can take advantage of an extended transition period to comply with new or revised accounting standards applicable to public
companies.
Until
such time as we cease to qualify as an emerging growth company, investors may find our common stock less attractive because we
may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active
trading market for our common stock and our stock price may be more volatile.
As
an “emerging growth company” we may take advantage of an extended transition period to comply with new or revised
accounting standards applicable to public companies.
Section
107 of the JOBS Act also provides that, as an emerging growth company, we can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We can therefore
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However,
we have not elected to take advantage of the benefits of this extended transition period.
At
such time as we cease to qualify as an “emerging growth company” under the JOBS Act, the costs and demands placed
upon management will increase.
We
will continue to be deemed an emerging growth company until the earliest of (i) the last day of the fiscal year during which we
had total annual gross revenues of $1,000,000,000 (as indexed for inflation), (ii) the last day of the fiscal year following the
fifth anniversary of the date of the first sale of common stock under a registration statement under the Securities Act ; (iii)
the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv)
the date on which we are deemed to be a ‘large accelerated filer’ as defined by the SEC, which would generally occur
upon our attaining a public float of at least $700 million. Once we lose emerging growth company status, we expect the costs and
demands placed upon management to increase, as we would have to comply with additional disclosure and accounting requirements,
particularly if our public float should exceed $75 million.
We
will incur significant costs as a result of becoming a reporting public company, and our management will be required to devote
substantial time to new compliance requirements, including establishing and maintaining internal controls over financial reporting,
and we may be exposed to potential risks if we are unable to comply with these requirements.
As
a reporting public company, we will incur significant legal, accounting and other expenses under the Sarbanes-Oxley Act of 2002,
together with rules implemented by the Securities and Exchange Commission and applicable market regulators. These rules impose
various requirements on public companies, including requiring certain corporate governance practices. Our management and other
personnel will need to devote a substantial amount of time to these requirements. Moreover, these rules and regulations will increase
our legal and financial compliance costs and will make some activities more time-consuming and costly.
The
Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure
controls and procedures. In particular, we must perform system and process evaluations and testing of our internal controls over
financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required
by Section 404 of the Sarbanes-Oxley Act. Compliance with Section 404 may require that we incur substantial accounting expenses
and expend significant management efforts. Our testing may reveal deficiencies in our internal controls over financial reporting
that are deemed to be material weaknesses. In the event we identify significant deficiencies or material weaknesses in our internal
controls that we cannot remediate in a timely manner, the market price of our stock could decline if investors and others lose
confidence in the reliability of our financial statements and we could be subject to sanctions or investigations by the SEC or
other applicable regulatory authorities.
74.11%
of our shares of Common Stock are controlled by Principal Stockholders.
74.11%
of our Common Stock is controlled by two stockholders of record. This figure does not include stock controlled by our directors
and officers who are the beneficial owners of about 2.13% of our Common Stock. Such ownership by the Company’s principal
shareholders, may have the effect of delaying, deferring, preventing or facilitating a sale of the Company or a business combination
with a third party.
If
the selling shareholders sell a large number of shares all at once or in blocks, the value of our shares would most likely decline.
The
Company has 14,059,000 shares of Common Stock outstanding as of March 31, 2017. The availability for sale of such a large amount
of shares may depress the market price for our Common Stock and impair our ability to raise additional capital through the public
sale of Common Stock. The Company has no arrangement with any of the holders of the foregoing shares to address the possible effect
on the price of the Company’s Common Stock of the sale by them of their shares.
Our
auditors have expressed substantial doubt about our ability to continue as a going concern
.
The
accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, we were incorporated on July 25, 2005, we have a working capital deficiency
and we accumulated losses since inception. As a result, our auditors have expressed substantial doubt about our ability to continue
as a going concern. Continued operations are dependent on our ability to complete equity or debt financings or generate profitable
operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not
include any adjustments that may result from the outcome of this uncertainty.
ITEM
2. DESCRIPTION OF PROPERTY
In
December 2012, the Company was presented with a group of claims (“cells”) known as the Teako property. The Teako cells
are located half way between Terrace and Smithers, British Columbia, Canada and are near the original gold rush town of Hazelton
B.C. which was founded in 1866, the site of the original gateway and staging area for the famous Omineca Gold rush days of 1869-1873.
Initially,
a total of 20 cells were acquired totaling 296 hectares (approx. 730 acres). After preliminary examination of the area, the Company
came to the conclusion that the area is worth further examination and exploration. Therefore, Company management requested that
the Prospector/Vendor stake more cells adjacent or adjoining the original claim group on behalf of the Company. An additional
778 hectares (approx. 1,922 acres) were staked, bringing our land package to a total of 1,074 hectares, or about 2,652 acres.
The cells have good access to many miles of new logging roads that have recently been opened up in the area. It should be noted,
however, that any proposed program is exploratory in nature and that the property is without known reserves
The
Company acquired the initial cells for a cash payment of Cdn$10,000 and 1,500,000 restricted shares based on certain key events
as previously noted. The additional cells were staked on behalf of the Company.
The
property is centered at latitude 55° 02’ 30” N and longitude 128° 20’ 00” W and covers a total
area of approximately 1075 hectares. As listed below in Table 1, the property is comprised of 5 MTO claims situated on Mineral
Titles map sheets 103P.009.
Tenure
Number
|
|
Claim
Name
|
|
Area
(Ha)
|
|
Good
To Date
|
1015035
|
|
Teako
|
|
296.49
|
|
2015/Dec/4
|
1015741
|
|
Owl
|
|
778.46
|
|
2016/Jan/6
|
1023887
|
|
Surprise
|
|
277.6273
|
|
2015/Nov/19
|
1023888
|
|
Lucky
Dawg
|
|
1205.1729
|
|
2015/Nov/19
|
1023889
|
|
Little
Dawg
|
|
592.8458
|
|
2015/Nov/19
|
Owlhead
Minerals (BC) Corp., the 100% owned subsidiary of Image International Group, Inc., holds under-surface rights only to the property.
The property is almost entirely covered by crown land. There are two small areas in the extreme eastern part of the property that
have privately held surface rights. Under-surface (mineral) rights to these privately owned lands are held by Image International’s
mineral claims which overlie them. Access to the lands with privately held surface rights, for mineral exploration purposes, is
provided under Section 19 of the Mineral Tenure Act.
THE
AREA
Canada’s
richest gold mine was a discovery by the late Murray Pezim: Eskay Creek which is located a couple of hundred kilometers to the
north. To the south and east of our Teako property is the world famous Barkerville Gold Rush area, which to this day has producing
gold mines.
The
area’s topography is moderate with forest covering consisting of recently logged spruce, pine, cedar, with some initial
regeneration in logged areas.
Other
projects/companies in the area are: The Kalam project by Eagle Plains Exploration - polymetallic veins & porphyry Mo-Au; The
Louise Lake Project held by Victory Mountain Ventures - porphyry Cu-Mo-Au; and the Pitman Project - porphyry Mo-Cu-Au.
GEOLOGY
Intermontane
Belt, Stikine Arch, Bowser Terrane. The area is underlain by brown to black Argillite, Siltstone, Greywacke, and minor Pebble
Conglomerate of the Middle to Upper Jurassic Bowser Lake Group.
The
Teako property is centered about 20 kilometres southwest of the community of Kitwanga, in northwestern British Columbia. The Company’s
wholly-owned subsidiary, Owlhead Minerals (BC) Corp. recently acquired the property for the purpose of mineral exploration but
other than initial reports and preliminary examinations made on the current and previously rejected claims the Company has not
yet carried out detailed or extensive exploration on the claims.
The
property occurs in a region which is rich in mineral endowment, one which is known both for the number and the variety of mineral
deposits, and which is home to a number of important active and past-producing mines. The area has a history of exploration that
dates to the discovery of placer gold in the late 1800’s. The property itself is an early-stage exploration property. It
was acquired on the basis of new discoveries of mineralization, alteration and veining by the vendor, which have no previous exploration.
The
claims are underlain by sediments of the Bowser Lake Group. In the southwest part of the claim block, the Bowser Lake sediments
are in contact with a northeast-trending fault-bounded block of sediments belonging to the younger Skeena Group. The Bowser Lake
and Skeena Group sediments are intruded by, and hornfelsed by, intrusives of the Coast Plutonic Complex and/or perhaps other ages.
The northern contact of the Skeena Group sediments is a major northeast trending fault, which appears to be an important regional
control to zones of mineralization in the area.
In
2012, prospector John Kemp discovered a 50 metre wide stockwork/breccia zone on the Teako property. Disseminated sulfides (pyrite,
chalcopyrite, galena) are present within the stockwork zone, which is accompanied by a large zone of carbonate-sericite alteration.
In a separate area of the property, Mr. Kemp discovered an area of epithermal veining. He also discovered widespread quartz veining
and massive sulfides (pyrite, pyrrhotite, chalcopyrite) within sediments on the claims.
Based
on the regional setting and on these new discoveries, the property almost certainly warrants further work. The original report
was written in February 2013. The author of the report, geologist Linda Caron, M. Sc., P. Eng., has revisited the property as
of November 11, 2013.
From
October 1, 2013 to October 11, 2013 John Kemp, the original owner, who will be assisting our geologist to assess the claims, visited
the property to cut approximately 3km of lines and take 21 chip and grab samples for analysis. The samples have been sent to Acme
Analytical Laboratories in Vancouver, Canada for analysis. The analytical report will be sent to our geologist. Linda Caron who
visited the site on November 11 and 12, 2013 in order to verify Mr. Kemp’s work. She took additional samples and examined
the site in more detail than her previous visit with the view to making specific recommendations regarding the scope or details
for further work which would include property-wide prospecting, stream sampling, geological mapping, additional line cutting,
rock sampling and possible soil sampling. Her summary report has been filed as an exhibit to this filing.
Based
on the additional work done by Mr. Kemp and the summary report submitted by our geologist, the Company has staked an additional
112 cells (claims) adding 4442.992 acres for a current total of 7098.122 acres.
On
the additional set of cells, the Company has also received positive news. The cells are scattered with visible epithermal veins.
Geologically, this indicates these cells are potentially sitting on a formation that could be productive, though there is no assurance
that any gold or other valuable minerals are present. The Company will pursue this area with a small to medium size exploration
program.Our plan of operation is to conduct exploration work on the claims in order to ascertain whether they possess economic
quantities of gold or other minerals. There can be no assurance that economic mineral deposits or reserves exist on the claims
until appropriate exploration work is done and an economic evaluation based on such work concludes that production of minerals
from the property is economically feasible. Economic feasibility refers to an evaluation completed by an engineer or geologist
whereby he or she analyses whether profitable mining operations can be undertaken on the property. Mineral property exploration
is generally conducted in phases. Each subsequent phase of exploration work is analyzed and recommended by a geologist based on
the results from the most recent phase of exploration.
During
the year ended March 31, 2016, we were unable to raise the required funding to proceed with further work on the Teako Properties
and have returned the properties to the control of the Optionor. Should this situation change and we are able to raise sufficient
capital, we will renegotiate with the Optionor and proceed with our plans to develop and exploit the claims. We are continuing
to develop our Madagascar-based precious and semi-precious mineral operations.
IMAGE
INTERNATIONAL GROUP, INC. CLAIMS