Item 1.
Business.
(a)
Business Development.
Pioneer Exploration Inc. (“Pioneer”) is a Nevada corporation that was incorporated on June 9, 2005.
On October 28, 2011, pursuant to the terms and conditions of a Share Purchase Agreement, Pioneer acquired 100% ownership of IBA Green, Inc., which was formed under the laws of Delaware on July 21, 2011 (“IBA Green”). Also, Pioneer indirectly owns through IBA Green a 100% interest in United States Patent No. 7,581,903 B1, entitled “METHOD OF MANUFACTURE AND INSTALLATION FLOWABLE THERMAL BACKFILLS. See Exhibit 10.13 - Share Purchase Agreement for more details.
Since the date of inception, IBA Green has been developing technology that will be used in the treatment and conversion of incinerated bottom ash.
Currently, neither Pioneer nor IBA Green has any manufacturing facilities, operations, suppliers, products, or customers, nor any current means of generating revenues.
Pioneer maintains its statutory resident agent’s office at 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and its business office is located at 2700 Newport Boulevard, Suite 190, Newport Beach, California, 92663. Pioneer’s office telephone number is (877) 700-0422.
Neither Pioneer nor IBA Green has been involved in any bankruptcy, receivership or similar proceedings. There have been no material reclassifications, mergers, consolidations or purchases or sales of a significant amount of assets not in the ordinary course of Pioneer’s business, with the exception of the acquisition of IBA Green.
See “Business of Pioneer” and “Management’s Discussion and Analysis or Plan of Operations” below for more information on the business of Pioneer and its subsidiary.
(b)
Business of IBA Green
Pioneer is a holding company with its sole business being the management of IBA Green’s business. IBA Green is a technology company that has developed and will utilize technology designed to be used in the treatment and conversion of incinerated bottom ash.
IBA Green has developed a process to mitigate the environmental issues of the toxic end products of the Waste-to-Energy industry, and has developed a patented process to safely and profitably utilize the toxic end product (the “IBA Technology”). The IBA Technology works in synergy with the Waste-to-Energy industry, converting the toxic end products into commercially viable green construction products.
Waste-to energy (WtE) or energy-form-waste (EfW) is the process of creating energy in the form of electricity or heat from the incineration of waste sources. Incineration, the combustion of organic material such as waste with energy recovery is the most common WtE implementation. After incineration, solid waste is reduced to 10% of its original volume and contains traces of lead, zinc, and mercury. This toxic end product is commonly referred to as “incinerated bottom ash” or “IBA”.
The IBA Technology is a cost effective process for stabilizing the chemical structure and altering the mechanical qualities of IBA. This proprietary process that will enable IBA Green to up-cycle IBA into commercially viable construction aggregate products that will meet industry performance specifications and exceed environmental standards, including the latest US EPA standards dealing with extractable metals content testing. IBA Green plans to utilize its reclamation and recycling technology to convert the millions of tons of IBA impounded in landfills and leaching toxins into ecosystems to valuable green, marketable construction resources
Products and Services
The IBA Technology will blend various materials with the IBA to stabilize the IBA. Once the IBA is stabilized, IBA Green will manufacture engineered construction aggregates using the stabilized IBA. The aggregates will be engineered-gradations that will enhance the mechanical properties of IBA’s products (the “IBA Aggregates”). These unique blends may then be used for engineered products with predetermined structural properties; similar to the way recycled wood chips and sawdust are now incorporated into engineered structural wood products.
From the IBA Aggregates, IBA Green will produce two product groups:
1.
Construction Aggregates
The construction aggregates utilize Portland cement or other products mixed with the IBA Aggregates to form concrete product lines. IBA Green’s primary construction aggregates products include:
·
Controlled-density fills (thermal and non-thermal) for superior trench restoration with zero settlement and the ability to re-excavate
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Duct-bank concrete (thermal and non-thermal) for utility conduit encasement and protection
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Grouts (thermal and non-thermal, cementitous and non-cementitous) for directional drilling and compaction grouts
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Foamed concretes
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High-strength, rapid-setting concretes for infrastructure repair, bridge, tunnel and roads
2.
Pre-cast Concrete Products
Pre-cast concrete products utilize nanotechnology elements integrated into the engineered aggregates. These create a corrosion resistant and high strength product line that can replace structural concrete in corrosive and degrading environments such as bridge decks, or in areas where concrete is subjected to salts, reactive soils, or wastewater streams.
IBA Green’s precast concrete products include:
·
Concrete pipe
·
Pipe supports
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Road barriers
·
Light pole bases
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Pad mounts
·
Structural beams
Thermal Products
IBA Green plans on developing a line of performance products to enhance and support the electric industry rebuilding the electric grid in the United States and abroad, as well as providing eco-friendly materials for burgeoning renewable green energy industries. IBA Green’s Thermal concrete and Thermal backfill products will be developed for the purpose of enhancing both the longevity and performance specifications of high voltage underground electric transmission cables.
Fly Ash Polymer Concretes - The Eternal Cement
Polymer concrete is a high performance material which contains Pozzolans. Pozzolans have high values of mechanical parameters and chemical resistance maintaining anti-corrosion protection and excellent mechanical strength. Artificial Pozzolana is derived from fly-ash, which IBA Green will use to produce Fly Ash Polymer concrete.
Markets
IBA Green’s sales strategy is to identify the applications and products needed in each local market. Management expects to become the “preferred material provider” for local electric utilities and municipalities.
IBA Green has adopted a multi-pronged marketing approach, including public-private partnerships, strategic industrial partners, third-party distribution channels, and direct sales.
In public-private partnerships, IBA Green believes it can bridge the gap between disparate government entities and private companies. IBA Green believes that the agency that regulate waste ( US EPA ) does not interact with the agency that regulate roadways and infrastructure (The Department of Transportation). With WtE plants becoming a more attractive alternative energy source, the IBA Technology is a viable solution to the critical IBA waste disposal problem and may also reduce construction costs by utilizing IBA aggregates rather than virgin materials. IBA Green believes that these facts will encourage more local and state governments to codify the use of the recycled IBA into their roadways and infrastructure. Once government specifications are in place, construction companies for municipal and private customers will be able buy their aggregate products from a local, eco-friendly source.
Potential strategic industrial partners will include any company currently involved in waste management and recycling, such as Covanta Energy, and Wheelabrator Technologies along with utility companies such as Dominion Power or National Grid and energy producers such as American Electric Power and Tennesse Valley Authority. Angelo Scola of IBA Green has 40 years of experience working in the power utility business, and plans to expand its marketing outreach, both nationally and globally with IBA Technology.
Third-party distribution channels would be set up via a franchise or strategic partner model. IBA Green has targeted several market locations such as the states of Illinois and Hawaii that have ash disposal problems that IBA Green believes are rich in opportunity. As these geographic locations are developed by IBA Green, IBA Green would consider identifying local strategic partners to purchase or manage these locations. In addition, IBA Green envisions small-scale solutions for small municipalities and large institutions that can be independently operated.
Lastly, direct sales will be made to other material processors who can utilize the recycled IBA for their specific construction material products. One example of this customer might be material suppliers whose virgin resources quarries may be in the process of depletion, or that their virgin aggregates are of poor quality and may not meet specification.
IBA Green sees both developed countries and developing countries as essentially unlimited markets for its recycled IBA Aggregates due to the need for utilities infrastructures in developing countries and for maintenance and repair of aging utilities in the developed countries.
One critical issue facing the United States market at this point in history is the breakdown and failure of the electrical grid transmission and distribution system. This infrastructure crisis is identified and addressed in the Clean Energy Act of 2005. The research behind the Clean Energy Act of 2005 calls for the rebuilding of the entire electric grid, with spending estimated at $8 billion annually for construction. Virtually all the IBA generated from United States WtE plants could be converted into aggregate products used in construction products to rebuild this electrical grid.
Distribution Methods
IBA Green’s distribution method is to treat and neutralize the ash on-site of the coal burning facility, eliminating the transportation, tipping and legacy insurance costs.
The largest target market for our IBA Green technology are municipal electric utility power providers which transport the ash they manufacture daily to one of the 1300 municipal or private landfills or mono-fill ash dumps located across the United States. The cost to utility power providers to dispose of their ash exceeds the actual tipping fees paid to dump facilities, which is due to the transportation costs of fuel, trucking, and rail expense.
Another of our large volume target markets are the ash landfills and monofills. These dump sites are located across the country and are rich with IBA.
The distribution model that IBA Green is developing is based on plant mobility utilizing on-site feedstock. Setting up mobile manufacturing plants at each site provides accessible aggregate deposits that IBA Green converts into marketable construction aggregate products, while also systematically and safely eliminating all the environmental hazards.
Several key factors support and influence the IBA Green installation model:
·
Mobility: unlike traditional aggregate manufacturers who deliver, typically by truck, finished products from a manufacturing facility to the construction site, IBA Green will set up mobile facilities to produce IBA Aggregates on-site, bringing the raw aggregate materials to the construction venue prior to the manufacturing process.
·
On-site manufacturing will cut down on shipping costs for the raw aggregate materials, since these materials can be delivered during off-peak hours and safely stored prior to manufacture. Savings on diesel truck fuel and reduced greenhouse gases will be significant also.
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The on-site approach will allow products to be closely tailored to the precise soil and climate conditions of the site. IBA Green can alter and revise a particular product after multiple test pours before determining the optimal mix for a specific site.
·
Research and development will occur in actual site installations, not in controlled lab settings. As the installer, IBA Green directly controls and assesses the performance of its products in real time and in the real world. Truly understanding product performance in actual field conditions will keep IBA GREEN on the cutting edge of ongoing technical improvements.
Status of Products
IBA Green has manufactured Thermal Concrete, Fluidized Thermal backfill, Thermal Grouts as well as structural concrete for duct bank system and pre-cast products utilizing Class F and Class C fly coal ash and coal based bottom ash. IBA Green has successfully completed US EPA 1311TCLP heavy metal extraction bench testing of Incinerator Bottom Ash from the WTE plant in Singapore. The mechanical performance of fly ash and Bottom Ash from WTE plants behave quite similarly to that of combusted coal. The differentiating factors between the two are the chemical make-up of the two ashes.
The next step for product production will be to move on from laboratory bench testing to insitu testing for chemical neutralization.
The process to chemically neutralize the heavy metals and the toxins in ash products are both site and product specific. Each facility that IBA Green will draw ash feed -stock from, will require on-site testing to determine the highest and best use products from the chemical analysis. Additionally the product demands and market absorption rate will shape the product mix.
From initial test process to the manufacture of products will require 9-12 months and will cost $1 million to $5 million of investment, depending on the size of the facility. The size of the IBA Green facility is determined by the daily and monthly intake volume of ash produced by the combustion facility. A combustion facility producing 350 tons or more of ash per day would be identified as a large facility; volumes under 150 tons per day would be considered a small facility.
The first stage of our production facility will be to neutralize the ash, up-cycling from a hazardous residue waste to green feed-stock. The second stage will be to manufacture aggregate materials such as silica sands and stone aggregate. The third stage of our production facility would be to manufacture the desired products from the aggregate materials.
One of the cornerstone principals of our IBA Green financial model is to locate our facility as close to the combustion facility as possible. Eliminating or reducing the cost of loading and transporting the ash feed-stock from the combustion site to the manufacturing production facility is vital to cost controls. Manufacturing a product mix that will be consumed within a 25 mile radius of the manufacturing plant is another cost control measure.
The IBA Green Corporate office will be located in Newport Beach, California however manufacturing facilities will be located at the location of the ash manufacturer.
Competitive Conditions
IBA Green’s competitive advantage is its IBA Technology which utilizes Atomic Polymer chemistry applying nano-scale liquid ceramic polymer technology and the added ability to use the physical characteristics of the nano-ceramic molecule (Mesopouris Inorganic Polymer - MIP). The IBA technology manipulates IBA mechanical properties and the stabilization of IBA chemical structure into an inert and non-toxic aggregate.
Weakness & Threats
Capitalization: Adequate funding is the greatest risk that IBA Green faces. Testing procedures are site-specific for both the chemical neutralization as well as product development. The chemical make-up of IBA is established by the input trash. The waste stream of a primarily residential community has a different complexion than that of a community with an industrial base. So the testing process is site-specific and ongoing. The rate of growth is predicated on availability working capital.
Resistance to change: Institutional inertia is a potential threat. Communities that have made a continues decision to implement WTE as a means to reduce their waste stream by up to 90% and up-cycle trash to energy create the path of least resistance to IBA Greens business model. These communities are already recycling 90% of their waste stream and have driven cultural and social change in regard to their waste stream. Introducing the concept of recycling the last 10% of that waste stream is a natural progression. The cultural change for large energy producers that have been burning coal may prove to be a more difficult transition.
Raw Materials and Equipment
IBA Green requires ash as the requisite raw material to produce the IBA Aggregates and other products. This raw material is abundant and is available from coal burning and waste to energy electric power plants at no cost to IBA Green. In certain circumstances, the owner of such raw material will pay IBA Green to haul the ash and store it.
IBA Green will purchase the manufacturing equipment needed to mass produce the IBA Aggregates and other products from one of several national equipment manufacturers. Currently, IBA does not have any mass production facilities, nor any agreement with any manufacturers to purchase all of this equipment. IBA Green estimates that the cost of the equipment to build a medium size plant to neutralize ash will cost approximately $2 million dollars. The lead time from the initial order to purchase is approximately six months.
Principal Suppliers
IBA Green does not have any principal suppliers that it relies upon. IBA Green can obtain the feedstock ash from existing utility plants and landfills, the by product of burning both coal and municipal waste.
There are currently 700 operating plant locations in the United States to partner with as suppliers as listed below:
1.
There are 1,300 ash impoundment landfills and Ash Monofill Landfills in the United States.
2.
There are 87 Mass Burn (MB) Waste to Energy Plants operating in 24 States, producing 97,000 tons of Municipal Solid Waste per Day or 3 million tons of Incinerated Bottom Ash (IBA) annually to be treated.
3.
There are 13 Mass Burn (MB) Waste to Energy Plants Modular, Mobile units that can be assembled quickly when needed.
4.
RDF (Refuge Derived Fuel). Refuge is building materials, old lumber and wood, stumps etc.
5.
The United States has approximately 594 coal fired power plants producing approximately 70 million tons of Fly-ash per year from the manufacture of electricity.
6.
Private industries such as steel manufacturing and food processing also produce IBA’s.
IBA Green currently has no principal suppliers for equipment or raw materials. IBA Green's business model is to partner with electric power manufacturers to treat the daily output of ash they manufacture, eliminating the costly expense of trucking and dumping the ash in landfills.. IBA Green will identify the equipment manufacture best suited for each project once the type of ash and daily volumes and geographic location of the plant are secured
Dependence on Customers
Currently, IBA Green is not and will not be dependent on one or a few major customers.
Technology and Intellectual Property
Neither Pioneer nor IBA Green currently own any patents or trade marks, with the exception of the following:
United States Patent number 7,581,903 B1, Entitled “Method of Manufacture and Installation Flowable Thermal Backfills”
Also, IBA Green is not party to any license or franchise agreements, concessions, royalty agreements or labor contracts arising from any patents or trademarks. IBA Green’s business is not materially dependent on the existence of third party patent or other third party intellectual property rights. IBA Green intends to protect its name and other major proprietary trademarks by (1) the registration of the trademarks used in the markets where IBA Green will operate its business and sell it products, (2) monitoring the markets for misuses of such trademarks by others, and (3) taking the appropriate steps to stop any infringing activities.
Government Approvals and Regulations
Currently, Pioneer and IBA Green are in compliance with all business and operations licenses that are typically applicable to most commercial ventures. However, there can be no assurance that existing or new laws or regulations that may be adopted in various jurisdictions in the future will not impose additional fees and taxes on IBA Green and its business operations. IBA Green is not aware of any such revisions to existing laws and regulations nor new laws or regulations that could have a negative impact on IBA Green’s business and add additional costs to IBA Green’s business operations.
As IBA Green commences operations for the treatment of domestic sewage and wastewater from public water supply treatment facilities, as well as the treatment of waste from land fill tipping operations, IBA Green will comply and obtain any necessary permits required under the National Pollutant Discharge Elimination System (NPDES), all as pursuant to the Environmental Protection Agency (EPA). Such NPDES permits will be obtained in any jurisdiction, or any state, where such permits are required.
As an ongoing process IBA Green will have its products voluntarily tested after the neutralization process to ensure and verify that its out-put product has met EPA 1311 TCLP standards. EPA 1311 TCLP (Toxicity Characteristics Leeching Procedures) is a process method designed to determine the mobility of both organic and inorganic analytes present in liquid, solid, and multiphasic wastes, and provides an analysis of the waste to determine that individual analytes are not present in the waste, or that they are present but at such low concentrations that the appropriate regulatory levels could not possibly be exceeded.
Research and Development Costs
Pioneer and IBA Green have not spent any funds on either company-sponsored research and development activities or customer-sponsored research activities relating to the development of new products, services or techniques or the improvement of existing products, services, or techniques.
Employees
Currently, neither Pioneer nor IBA Green has any full time employees or part time employees.
At present, neither Pioneer’s nor IBA Green’s officers and directors, have any employment agreement with their respective company. Neither Pioneer nor IBA Green presently have any pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, Pioneer may adopt plans in the future. There are presently no personal benefits available to any employees.
Item 1A.
Item 1A. Risk Factors.
Pioneer is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 1B.
Item 1B. Unresolved Staff Comments.
Pioneer is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 2.
Item 2. Description of Property.
Pioneer’s and IBA Green’s executive offices are both located at 2700 Newport Boulevard, Suite 190, Newport Beach, California, 92663.
Pioneer and IBA Green currently have no interest in any property.
Item 3.
Item 3. Legal Proceedings.
Pioneer is not a party to any pending legal proceedings and, to the best of Pioneer’s knowledge, none of Pioneer’s property or assets are the subject of any pending legal proceedings.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a) Market Information
Pioneer’s common stock has been quoted on the NASD OTC Bulletin Board under the symbol “PIEX” since October 9, 2007. The table below gives the high and low bid information for each fiscal quarter of trading and for the interim period ended December 14, 2012. The bid information was obtained from Pink OTC Markets Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
(b) Holders of Record
Pioneer has approximately 20 holders of record of Pioneer’s common stock as of August 31, 2012 according to a shareholders’ list provided by Pioneer’s transfer agent as of that date. The number of registered shareholders does not include any estimate by Pioneer of the number of beneficial owners of common stock held in street name. The transfer agent for Pioneer’s common stock is Empire Stock Transfer Inc., 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and their telephone number is 702-818-5898.
(c) Dividends
Pioneer has declared no dividends on its common stock, and is not subject to any restrictions that limit its ability to pay dividends on its shares of common stock. Dividends are declared at the sole discretion of Pioneer’s Board of Directors.
(d) Recent Sales of Unregistered Securities
There have been no sales of unregistered securities within the last three years that would be required to be disclosed pursuant to Item 701 of Regulation S-K; with the exception of the following:
Share Purchase of IBA Green, Inc.
On October 28, 2011, the board of directors approved the Share Purchase Agreement with Angelo Scola for the purchase and sale of all of the issued and outstanding shares in the capital of IBA Green in consideration of the issuance of 38.5 million restricted shares in the capital of Pioneer to Scola. For the issuance of shares to Mr. Scola, Pioneer relied upon Section 4(2) of the Securities Act of 1933. Management is satisfied that Pioneer complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The issuance of shares was not a public offering and was not accompanied by any general advertisement or any general solicitation. All securities issued were endorsed with a restrictive legend confirming that the securities could not be resold without registration under the Securities Act of 1933or an applicable exemption from the registration requirements of the Securities Act of 1933. See Exhibit 10.13 - Share Purchase Agreement for more details.
There are no outstanding options or warrants to purchase, or securities convertible into, shares of Pioneer’s common stock, with the exception of the following:
1.
On November 20, 2008, Pioneer received a $50,000 loan and issued a convertible promissory note. The note is convertible into 200,000 common shares at $0.25 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
2.
On February 19, 2009, Pioneer received a $50,000 loan and issued a convertible promissory note. The note is convertible into 41,667 common shares at $1.20 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
3.
On May 15, 2009, Pioneer received a $36,000 loan and issued a convertible promissory note. The note is convertible into 20,000 common shares at $1.80 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
4.
On May 6, 2011, Pioneer received a $15,000 loan and issued a convertible promissory note. The note is convertible into 60,000 common shares at $0.25 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
5.
On July 14, 2011, Pioneer received a $10,000 loan and issued a convertible promissory note. The note is convertible into 100,000 common shares at $0.10 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
6.
On August 23, 2011, Pioneer received a $10,000 loan and issued a convertible promissory note. The note is convertible into 100,000 common shares at $0.10 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
(e) Penny Stock Rules
Trading in Pioneer’s common stock is subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends Pioneer’s common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in Pioneer’s securities, which could severely limit their market price and liquidity of Pioneer’s securities. The application of the “penny stock” rules may affect your ability to resell Pioneer’s securities.
Item 6.
Item 6. Selected Financial Data.
Pioneer is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
THE FOLLOWING PRESENTATION OF THE PLAN OF OPERATION OF PIONEER EXPLORATION INC. SHOULD BE READ IN CONJUNCTION WITH THE AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
Overview
Pioneer was incorporated in the State of Nevada on June 9, 2005.
IBA Green, Inc. was incorporated in the State of Delaware on July 21, 2011.
Pioneer is a holding company with its sole business being the management of IBA Green’s business. IBA Green is a development stage company. IBA Green’s principal business is the development and utilization of technology designed to be used in the treatment and conversion of incinerated bottom ash.
Currently, neither Pioneer nor IBA Green have any manufacturing facilities, operations, suppliers, products, or customers, nor any current means of generating revenues.
Plan of Operation
Neither Pioneer nor IBA Green have had any significant revenues generated from its business operations since inception. Management expects that the revenues generated from IBA Green’s business for the next 12 months will not be enough for its required working capital. Until IBA Green is able to generate any consistent and significant revenue it will be required to raise additional funds by way of equity or debt financing.
At any phase, if IBA Green finds that it does not have adequate funds to complete a phase, it may have to suspend its operations and attempt to raise more money so it can proceed with its business operations. If IBA Green cannot raise the capital to proceed it may have to suspend operations until it has sufficient capital.
To become profitable and competitive, IBA Green needs to continue to develop and advance the IBA Aggregates to a point where they can be sold commercially. To achieve this goal, management has prepared the following phases for its plan of operation for the next 12 months:
1. Phase One.
In Phase One IBA plans to (1) complete negotiations and sign contracts for the purpose of acquiring IBA’s and converting the IBA’s into commercially viable products; and (2) obtain lab and office space.
IBA Green has budgeted $450,000 for this phase and expects it to take three months to complete, with completion expected within the first three months of IBA Green’s plan of operation.
2. Phase Two.
In Phase Two IBA plans to (1) conduct and complete analytical laboratory testing on IBA’s, including gathering and shipping the IBA samples and conducting initial characterization testing on the IBA samples; (2) develop the requisite chemistry to stabilize the IBA’s; (3) develop the IBA Aggregates and other products that are of the highest quality and represent the best use for the particular IBA; (4) begin the long-term environmental compliance testing; and (5) develop and market IBA Green’s business.
The development of the IBA Green’s business will consist of identifying potential viable target markets, producing a list of equipment required in the particular target markets, and identifying potential suppliers and equipment providers. Target markets will be identified based (a) the daily volume of ash produced at the generation facility and (b) the absorbsion market rate and price point of the product that can be manufactured.
Simultaneously, IBA Green will develop and populate its website (www.ibagreen.com) with information regarding its business and products.
IBA Green has budgeted $550,000 for this phase and expects it to take three months to complete, with completion expected within the first six months of IBA Green’s plan of operation.
3. Phase Three
In Phase Three IBA plans to (1) retain production engineers and industrial engineers to design the equipment and line specification for a prototype that will convert the IBA’s into IBA Aggregate or other products; (2) acquire the mechanical engineering hardware; (3) build and assemble a production prototype; and (4) further development and marketing IBA Green’s business and products.
IBA Green has budgeted $500,000 for this phase and expects it to take three months to complete, with completion expected within the last six months of IBA Green’s plan of operation.
4. Phase Four
In Phase Four IBA plans to (1) set up the on-site manufacturing prototype for the conversion of the IBA’s into IBA Aggregates and other products; (2) perform further testing on the IBA Aggregates and other products manufactured on-site to confirm they are the highest quality and best-use site specific to the particular IBA; (3) complete third party laboratory product testing for certification; and (4) continued development and marketing of IBA Green’s business and products.
IBA Green has budgeted $2,000,000 for this phase and expects it to take three months to complete, with completion expected within the last three months of IBA Green’s plan of operation.
Risk Factors
An investment in Pioneer’s common stock involves a number of very significant risks. Prospective investors should refer to all the risk factors disclosed in Pioneer’s Form SB-2/A filed on February 20, 2007 and Pioneer’s Form 10-KSB filed on December 11, 2007.
Financial Condition
As at August 31, 2012, Pioneer had a cash balance of $202. During the 12 month period following the date of this current report, management anticipates that neither Pioneer nor IBA Green will generate any revenue. Accordingly, Pioneer will be required to obtain financing in order to continue its plan of operations. Management anticipates that the financing will be in the form of equity financing from the sale of Pioneer’s common stock. If Pioneer is successful in completing an equity financing, existing shareholders will experience dilution of their interest in Pioneer. However, management does not have any financing arranged and cannot provide investors with any assurance that it will be able to raise sufficient financing from the sale of Pioneer’s common stock to finance the plan of operations. In the absence of such financing, Pioneer will not be able to implement its plan of operation and the business plan will fail.
In addition, management anticipates incurring the following expenses during the next 12 month period:
●
Management anticipates spending approximately $3,000 in ongoing general and administrative expenses per month for the next 12 months, for a total anticipated expenditure of $36,000 over the next 12 months. The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to Pioneer’s regulatory filings throughout the year, as well as transfer agent fees and general office expenses.
●
Management anticipates spending approximately $12,000 in complying with Pioneer’s obligations as a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the preparation of Pioneer’s financial statements and completing its annual report, quarterly report, and current report filings with the SEC.
Pioneer will require approximately $50,000 in order to fund its obligations as a reporting company under the Securities Act of 1934 and its general and administrative expenses for the next 12 months.
Liquidity and Capital Resources
As of August 31, 2012, Pioneer had total assets of $202, and a working capital deficit of $1,055,956, compared with a working capital deficit of $49,900 as of August 31, 2011. The increase in the working capital deficit was primarily due to an increase in the amount due to a related party, and an increase in accounts payable, an increase in accrued liabilities, and convertible notes payable. Assets consisted solely of $202 in cash and the liabilities consisted of $314,331 in accounts payable and accrued liabilities, $171,000 in convertible notes payable, $29,274 in loan payables and $541,553 due to a related party.
Pioneer will need to raise additional capital to execute its plan of operation. As described above, for the next 12 months Pioneer plans on securing contracts for the purpose of acquiring IBA’s and converting the IBA’s into commercially viable products, testing and stabilizing IBA, developing IBA Aggregates, designing and building production equipment, and testing and manufacturing IBA Aggregates, all at an estimated cost of $3.50 million. If Pioneer does not receive sufficient funding on a timely basis, it could have a material adverse effect on its liquidity, financial condition and business prospects. Additionally, if Pioneer receives funding, it may be on terms that are not favorable to Pioneer and its stockholders. There are no assurances that Pioneer will be able to achieve further sales of its common stock or any other form of additional financing. If Pioneer is unable to achieve the financing necessary to continue its plan of operations, then Pioneer will not be able to continue its exploration programs and its business will fail.
Net Cash Used in Operating Activities
For the fiscal year ended August 31, 2012, net cash used in operating activities increased to $611 compared to net cash provided by operating activities of $40 for the same period in the previous fiscal year.
At August 31, 2012, Pioneer had cash of $202. During the fiscal year ended August 31, 2012, Pioneer used $611 in cash for operating activities.
Net Cash Provided by Investing Activities
Net cash flows provided by investing activities increased to $773 for the fiscal year ended August 31, 2012 as compared with investing activities of $nil for the same period in the previous fiscal year. The increase in net cash provided by investing activities was due to cash acquired on the reverse capitalization transaction described above.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $nil for the fiscal year ended August 31, 2012 as compared with cash flow from financing activities of $nil for the same period in the previous fiscal year.
Results of Operation for the Period Ended August 31, 2012
Pioneer has had no operating revenues since its inception on July 21, 2011, through to August 31, 2012. Pioneer’s activities have been financed from the proceeds of share subscriptions. From its inception, on July 1, 2011, Pioneer has raised a total of $49,765 from private offerings of its common stock.
References to the discussion below to fiscal 2012 are to Pioneer’s fiscal year ended on August 31, 2012. References to fiscal 2011 are to Pioneer’s fiscal year ended August 31, 2011.
Foreign Exchange
Foreign exchange consists of foreign exchange gains and losses that arise from settling transactions undertaken by Pioneer in currencies other than the US dollar.
General and Administrative
General and administrative expenses are the general office and operational expenses of Pioneer. They include bank charges, filing and transfer agent fees, website costs, and rent.
Accretion of beneficial conversion feature
Accretion of beneficial conversion feature is non-cash interest expense relating to Pioneer’s convertible notes. Pioneer records the value of the conversion feature included in the notes as an additional interest cost of the financing.
Professional Fees
Professional expenses included legal, accounting and auditing expenses associated with Pioneer’s corporate organization, the preparation of Pioneer’s financial statements and Pioneer’s continuous disclosure filings with the Securities and Exchange Commission.
Off-Balance Sheet Arrangements
Pioneer has no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support and credit risk support or other benefits.
Material Commitments for Capital Expenditures
Pioneer had no contingencies or long-term commitments at August 31, 2012.
Tabular Disclosure of Contractual Obligations
Pioneer is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Critical Accounting Policies
Pioneer’s financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of Pioneer’s financial statements is critical to an understanding of Pioneer’s financial statements.
Use of Estimates
The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. Pioneer regularly evaluates estimates and assumptions related to recovery of financial assets, donated expenses and deferred income tax asset valuation allowances. Pioneer bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by Pioneer may differ materially and adversely from Pioneer’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Mineral Property Costs
Pioneer has been in the exploration stage since its inception on June 9, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. Pioneer assesses the carrying costs for impairment under ASC 360, “Property, Plant and Equipment” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Pioneer is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Pioneer Exploration Inc.
(A Development Stage Company)
August 31, 2012
Report of Independent Registered Public Accounting Firm
To the Stockholders of
Pioneer Exploration Inc.
(A Development Stage Company)
We have audited the accompanying consolidated balance sheets of Pioneer Exploration Inc. (A Development Stage Company) as of August 31, 2012 and 2011 and the related consolidated statements of operations and comprehensive loss, cash flows and stockholders' equity (deficit) for the years then ended and accumulated for the period from July 21, 2011 (Date of Inception) to August 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Pioneer Exploration Inc. (A Development Stage Company) as of August 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended and accumulated for the period July 21, 2011 (Date of Inception) to August 31, 2012 in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated any revenues and has incurred operating losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
CHARTERED ACCOUNTANTS
Vancouver, Canada
December 14, 2012
Pioneer Exploration Inc.
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in U.S. dollars)
The Accompanying Notes are an Integral Part of These Financial Statements
Pioneer Exploration Inc.
(A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
The Accompanying Notes are an Integral Part of These Financial Statements
Pioneer Exploration Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
The Accompanying Notes are an Integral Part of These Financial Statements
Pioneer Exploration Inc.
(A Development Stage Company)
Statement of Stockholders’ Deficit
For the Period from July 21, 2011 (Date of Inception) to August 31, 2012
(Expressed in U.S. dollars)
The Accompanying Notes are an Integral Part of These Financial Statements
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
1.
Nature of Operations and Going Concern
Pioneer Exploration Inc. (the “Company”) was incorporated in the State of Nevada on June 9, 2005. On October 28, 2011, the Company closed a reverse capitalization transaction with IBA Green Inc. (“IBA”), a privately-held company incorporated on July 21, 2011, under the laws of the State of Delaware (see Note 3). In accordance with the reverse capitalization, the Company issued 38,500,000 shares of common stock to the shareholder of IBA in exchange for 100% of the issued and outstanding shares of common stock of IBA.
The Company is a Development Stage Company, as defined by Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Enterprises. The Company’s past and planned future principal business is providing the safe disposal of waste products by creating commercially viable green products.
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and note holders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at August 31, 2012, the Company has a working capital deficiency of $1,055,956 and has an accumulated deficit of $1,105,721 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2.
Summary of Significant Accounting Policies
a)
Basis of Presentation
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, IBA Green Inc., a company incorporated in the State of Delaware. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year-end is August 31. These financial statements present the net assets and operations of IBA Green Inc. from the periods from inception on July 21, 2011 to August 31, 2012 since the net assets and operations of IBA Green Inc. are deemed to be the continuing entity for accounting purposes under the terms of the acquisition described in Note 3. Accordingly, IBA Green Inc. is deemed to have acquired the net assets of Pioneer Exploration Inc. on October 28, 2011. The comparative figures as at and for the period ended August 31, 2011 are those of IBA Green Inc. alone.
b)
Use of Estimates
The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the recovery of financial assets, donated expenses, deferred income tax asset valuation allowances and fair value measurements. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
2.
Summary of Significant Accounting Policies (continued)
c)
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
d)
Long-Lived Assets
In accordance with ASC 360, Property, Plant, and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
e)
Patents
Patents are stated at cost and have a definite life. Once the Company receives patent approval, amortization is calculated using the straight-line method over the remaining life of the patents.
f)
Financial Instruments and Fair Value Measurements
ASC 825, Financial Instruments requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts payable, amounts due to a related party and convertible notes payable.
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
2.
Summary of Significant Accounting Policies (continued)
f)
Financial Instruments and Fair Value Measurements (continued)
Pursuant to ASC 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of accounts payable, convertible notes payable and amounts due to related parties approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of August 31, 2012 as follows:
As at August 31, 2012, there were no liabilities presented on the Company’s balance sheet on a recurring basis.
Foreign currency transactions are primarily undertaken in Canadian dollars. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
g)
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
h)
Foreign Currency Translation
The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in Canadian dollars and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
2.
Summary of Significant Accounting Policies (continued)
i)
Comprehensive Income
ASC 220, Comprehensive Income establishes standards for the reporting and display of other comprehensive income and its components in the financial statements. During the years ended August 31, 2012 and 2011, the Company had no items that represent other comprehensive income.
j)
Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at August 31, 2012, the Company had 521,667 potentially dilutive shares outstanding.
k)
Stock-based Compensation
In accordance with ASC 718, Compensation - Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, the Company accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable.
l)
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3.
Acquisition of IBA Green Inc.
On October 28, 2011, the Company acquired 100% of IBA Green Inc. (“IBA”) in exchange for 38,500,000 shares of common stock (the “Acquisition”). IBA’s past and planned future principal business is providing the safe disposal of waste products by creating commercially viable green products.
The former shareholder of IBA held 77% of the total issued and outstanding common shares of the Company immediately following the Acquisition. The Acquisition was a capital transaction in substance and therefore has been accounted for as a reverse capitalization, which is outside the scope ASC 805, Business Combinations. Under reverse capitalization accounting, IBA is considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. These consolidated financial statements include the accounts of the Company since the effective date of the recapitalization and the historical accounts of IBA since inception.
The comparative figures as at August 31, 2011 and for the period from inception on July 21, 2011 to August 31, 2011 are those of IBA Green Inc. and IBA Green Inc. is deemed to be the continuing entity for accounting purposes.
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
3.
Acquisition of IBA Green Inc. (continued)
The assets acquired and liabilities assumed from Pioneer are as follows:
4.
Related Party Transactions
a)
As at August 31, 2012, the Company is indebted to the President of the Company and a company under common control for $541,553 (2011 - $24,940), representing management fees and expenditures paid on behalf of the Company. These amounts are unsecured, non-interest bearing, and due on demand.
b)
During the year ended August 31, 2012, the Company incurred management fees of $510,250 (2011 - $58,500) provided by an officer of the Company.
5.
Note Receivable
On October 28, 2011, the Company acquired a CDN$100,000 non-interest bearing promissory note due May 31, 2010, as part of the Acquisition transaction. As at August 31, 2012, the Company has not yet received payment. The Company believes ultimate collection of the amount receivable is not reasonably assured and, therefore, has recorded an allowance against the balance at August 31, 2012.
6.
Convertible Notes Payable
a)
On October 28, 2011, the Company assumed a $50,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on November 20, 2008, and is convertible into 200,000 common shares of the Company at $0.25 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
b)
On October 28, 2011, the Company assumed a $50,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on February 19, 2009, and is convertible into 41,667 common shares of the Company at $1.20 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
c)
On October 28, 2011, the Company assumed a $36,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on May 15, 2009, and is convertible into 20,000 common shares of the Company at $1.80 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
d)
On October 28, 2011, the Company assumed a $15,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on May 6, 2011, and is convertible into 60,000 common shares of the Company at $0.25 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
6.
Convertible Notes Payable (continued)
e)
On October 28, 2011, the Company assumed a $10,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on July 14, 2011, and is convertible into 100,000 common shares of the Company at $0.10 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
f)
On October 28, 2011, the Company assumed a $10,000 promissory note payable as part of the Acquisition transaction. The note was originally issued on August 23, 2011, and is convertible into 100,000 common shares of the Company at $0.10 per share at the holder’s option. The note is non-interest bearing, unsecured and is payable on demand.
7.
Loan Payable
At August 31, 2012, the Company owed $29,274 (CDN - $28,856) (2011 - $nil) to a former Director of the Company. The loan is unsecured, non-interest bearing and due on demand.
8.
Common Stock
On October 28, 2011, the Company completed a share exchange agreement whereby the Company acquired 5,000,000 of the issued and outstanding common shares of IBA. As part of the share exchange agreement, the Company issued 38,500,000 shares of common stock of the Company to the shareholder of IBA.
9.
Income Taxes
As at August 31, 2012, the Company has net operating losses carried forward of $792,366 (2011 - $99,900) available to offset taxable income in future years which commence expiring in fiscal 2021.
The income tax benefit differs from the amount computed by applying the combined federal and state income tax rate of 35% to net loss before income taxes for the years ended August 31, 2012 and 2011 as a result of the following:
Pioneer Exploration Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the Year Ended August 31, 2012
(Expressed in U.S. Dollars)
9.
Income Taxes (continued)
The significant components of deferred income tax assets and liabilities as at August 31, 2012 and 2011, after applying enacted corporate income tax rates, are as follows:
The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. When circumstances change and which cause a change in management's judgment about the realizability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.
10.
Subsequent Event
On November 29, 2012 the Company received an additional $25,000 in Financing from Blue Cove Holdings Inc in the form of a convertible promissory note under the following terms:
a.
All existing promissory notes held by Blue Cove Holdings be renegotiated and converted into a single $126,000 convertible promissory note(“New Note”); and
b.
The New Note will carry a conversion feature whereby each $0.25 of principal outstanding may be converted into one common share and one common share purchase warrant to purchase an additional common share at $0.25 for a period of 12 months from conversion.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There are no changes in and disagreements with Pioneer’s accountants on accounting and financial disclosure. Pioneer’s Independent Registered Public Accounting Firm from inception to the current date is Manning Elliott LLP, Chartered Accountants, 11th Floor, 1050 West Pender Street, Vancouver, British Columbia, V6E 3S7, Canada.
Item 9A.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by Pioneer’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of Pioneer’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of August 31, 2011. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, Pioneer’s management concluded, as of the end of the period covered by this report, that Pioneer’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC rules and forms and that such information was accumulated or communicated to management to allow timely decisions regarding required disclosure. In particular, Pioneer has identified material weaknesses in internal control over financial reporting, as discussed below.
In March 2009, management implemented the following remediation procedures, which are intended to remediate the causes of Pioneer’s disclosure procedures and controls ineffectiveness:
·
adopted a Disclosure Committee Charter (see Exhibit 99.1 for more details)
·
appointed Pioneer’s officers and directors to the Disclosure Committee
·
adopted policy to utilize external service providers to review and provide comment on disclosure reports and statements
Management’s Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. Pioneer’s internal control over financial reporting is a process designed under the supervision of Pioneer’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Pioneer’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:
·
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Pioneer’s assets;
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Pioneer’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of August 31, 2012, based on criteria established in Internal Control -Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified material weaknesses in internal control over financial reporting.
A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of Pioneer’s annual or interim financial statements will not be prevented or detected on a timely basis.
The matters involving internal controls and procedures that management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on Pioneer’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by Pioneer’s Chief Financial Officer in connection with the audit of its financial statements as of August 31, 2012 and communicated the matters to management.
As a result of the material weakness in internal control over financial reporting described above, management has concluded that, as of August 31, 2012, Pioneer’s internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by COSO.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on Pioneer’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on Pioneer’s board of directors caused and continues to cause an ineffective oversight in the establishment and monitoring of the required internal controls over financial reporting.
Pioneer is committed to improving its financial organization. As part of this commitment and when funds are available, Pioneer will create a position to Pioneer to segregate duties consistent with control objectives and will increase its personnel resources and technical accounting expertise within the accounting function by: (i) appointing one or more outside directors to its board of directors who will also be appointed to the audit committee of Pioneer resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls over financial reporting; and (ii) preparing and implementing sufficient written policies and checklists that will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who will also be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on Pioneer’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses: (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support Pioneer if personnel turn-over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues Pioneer may encounter in the future.
Management will continue to monitor and evaluate the effectiveness of Pioneer’s internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Pioneer’s independent auditors have not issued an attestation report on management’s assessment of Pioneer’s internal control over financial reporting. As a result, this annual report does not include an attestation report of Pioneer’s independent registered public accounting firm regarding internal control over financial reporting. Pioneer was not required to have, nor has Pioneer, engaged its independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit Pioneer to provide only management’s report in this annual report.
Changes in Internal Controls
There were no changes in Pioneer’s internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended August 31, 2012, that materially affected, or are reasonably likely to materially affect, Pioneer’s internal control over financial reporting.
Item 9B.
Item 9B. Other Information
During the fourth quarter of the fiscal year covered by this Form 10-K, Pioneer reported all information that was required to be disclosed in a report on Form 8-K.
PART III
Item 10.
Item 10. Directors, Executive Officers, and Corporate Governance.
(a) Identify Directors and Executive Officers
Each director of Pioneer holds office until (i) the next annual meeting of the stockholders, (ii) his successor has been elected and qualified, or (iii) the director resigns.
Pioneer’s and its subsidiaries’ management teams are listed below.
Management Teams
Angelo Scola - President, Chief Executive Officer, and Chief Financial Officer - Mr. Scola (60 years old) was appointed the Chief Executive Officer, President and Chief Financial Officer of Pioneer on October 28, 2011. Mr. Scola graduated from Wentworth Institute of Technology in 1971 and attended the University of Miami School of Business in 1971-72. Mr. Scola has 40 years of private sector experience in the utility and construction materials industry serving both domestic and international markets. Since 2002 Mr. Scola has pursued the study of applied science pertaining to both virgin and synthetic construction aggregate materials to enhance and stabilize performance capabilities.
(b) Identify Significant Employees
Pioneer has no significant employees other than the directors and officers of Pioneer.
(c) Family Relationships
There are no family relationships among the directors, executive officers or persons nominated or chosen by Pioneer to become directors or executive officers.
(d) Involvement in Certain Legal Proceedings
During the past ten years, none of Pioneer’s directors or officers has been:
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a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;
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convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
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subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
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subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity, or to be associated with persons engaged in any such activity;
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found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
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found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
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the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
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any Federal or State securities or commodities law or regulation; or
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any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
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any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
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the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
(e) Compliance with Section 16(a) of the Exchange Act.
All reports were filed with the SEC on a timely basis and Pioneer is not aware of any failures to file a required report during the period covered by this annual report.
(f) Nomination Procedure for Directors
Pioneer does not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the board of directors. Pioneer has not adopted a policy that permits shareholders to recommend candidates for election as directors or a process for shareholders to send communications to the board of directors.
(g) Audit Committee Financial Expert
Pioneer has no financial expert. Management believes the cost related to retaining a financial expert at this time is prohibitive. Pioneer’s Board of Directors has determined that it does not presently need an audit committee financial expert on the Board of Directors to carry out the duties of the Audit Committee. Pioneer’s Board of Directors has determined that the cost of hiring a financial expert to act as a director of Pioneer and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.
(h) Identification of Audit Committee
Pioneer does not have a separately-designated standing audit committee. Rather, Pioneer’s entire board of directors perform the required functions of an audit committee. Currently, Angelo Scola is the only member of Pioneer’s audit committee, but they do not meet Pioneer’s independent requirements for an audit committee member. See “Item 12. (c) Director independence” below for more information on independence.
Pioneer’s audit committee is responsible for: (1) selection and oversight of Pioneer’s independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by Pioneer’s employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditor and any outside advisors engaged by the audit committee.
As of August 31, 2012, Pioneer did not have a written audit committee charter or similar document.
(i) Code of Ethics
Pioneer has adopted a financial code of ethics that applies to all its executive officers and employees, including its CEO and CFO. See Exhibit 14 - Code of Ethics for more information. Pioneer undertakes to provide any person with a copy of its financial code of ethics free of charge. Please contact Pioneer at (877) 700-0422 to request a copy of Pioneer’s financial code of ethics. Management believes Pioneer’s financial code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
Item 11.
Item 11. Executive Compensation.
Pioneer has paid no compensation to its named executive officers during its fiscal year ended August 31, 2012.
SUMMARY COMPENSATION TABLE
Since Pioneer’s inception, no stock options, stock appreciation rights, or long-term incentive plans have been granted, exercised or repriced.
Currently, there are no arrangements between Pioneer and any of its directors whereby such directors are compensated for any services provided as directors, except as invoices for services rendered.
There are no employment agreements between Pioneer and any named executive officer, and there are no employment agreements or other compensating plans or arrangements with regard to any named executive officer which provide for specific compensation in the event of resignation, retirement, other termination of employment or from a change of control of Pioneer or from a change in a named executive officer’s responsibilities following a change in control.
Item 12.
Item 12. Security Ownership of Certain Beneficial Holders and Management.
(a) Security Ownership of Certain Beneficial Owners (more than 5%)
[1] The listed beneficial owner has no right to acquire any shares within 60 days of the date of this Form 8-K/A from options, warrants, rights, conversion privileges or similar obligations excepted as otherwise noted.
[2] Based on 49,764,500 shares of common stock issued and outstanding as of December 14, 2012
(b) Security Ownership of Management
[1] Based on 49,764,500 shares of common stock issued and outstanding as of December 14, 2012
(c) Changes in Control
Management is not aware of any arrangement that may result in a change in control of Pioneer.
Item 13.
Item 13. Certain Relationships and Related Transactions.
(a) Transactions with Related Persons
Since the beginning of Pioneer’s last fiscal year, no director, executive officer, security holder, or any immediate family of such director, executive officer, or security holder has had any direct or indirect material interest in any transaction or currently proposed transaction, which Pioneer was or is to be a participant, that exceeded the lesser of (1) $120,000 or (2) one percent of the average of Pioneer’s total assets at year-end for the last three completed fiscal years, except for the following:
1. Share Purchase Agreement
Angelo Scola, Pioneer’s President and CEO, sold all of his interest in IBA Green, Inc. to Pioneer in consideration of the issuance of 38.5 million restricted shares of common stock in the capital of Pioneer. See Exhibit 10.13 - Share Purchase Agreement for more details.
2. Donated Services and Rent
Warren Robb, Pioneer’s former President, CEO, CFO and director, donated services to Pioneer that are recognized on its financial statements. Also, Thomas Brady, Pioneer’s former President, CEO, CFO, Corporate Secretary, Treasurer, donated services and rent to Pioneer that are recognized on its financial statements. From inception on June 9, 2005 to August 31, 2011, Pioneer recognized a total of $33,000 for donated services and $11,250 for donated rent.
3. Management Fees
During the year ended August 31, 2012, the Company incurred management fees of $510,250 (2011 - $58,500) provided by Angelo Scola, Pioneer’s President and CEO.
(b) Promoters and control persons
During the past five fiscal years, Thomas Brady, Warren Robb, and Angelo Scola have been promoters of Pioneer’s business, but none of these promoters have received anything of value from Pioneer nor is any person entitled to receive anything of value from Pioneer for services provided as a promoter of the business of Pioneer.
(c) Director independence
Pioneer’s board of directors currently consists of Angelo Scola. Pursuant to Item 407(a)(1)(ii) of Regulation S-K of the Securities Act, Pioneer’s board of directors has adopted the definition of “independent director” as set forth in Rule 4200(a)(15) of the NASDAQ Manual. In summary, an “independent director” means a person other than an executive officer or employee of Pioneer or any other individual having a relationship which, in the opinion of Pioneer’s board of directors, would interfere with the exercise of independent judgement in carrying out the responsibilities of a director, and includes any director who accepted any compensation from Pioneer in excess of $200,000 during any period of 12 consecutive months with the three past fiscal years. Also, the ownership of Pioneer’s stock will not preclude a director from being independent.
In applying this definition, Pioneer’s board of directors has determined that Mr. Scola does not qualify as an “independent director” pursuant to Rule 4200(a)(15) of the NASDAQ Manual.
As of the date of the report, Pioneer did not maintain a separately designated compensation or nominating committee.
Pioneer has also adopted this definition for the independence of the members of its audit committee. Angelo Scola serves on Pioneer’s audit committee. Pioneer’s board of directors has determined that Mr. Scola is not “independent” for purposes of Rule 4200(a)(15) of the NASDAQ Manual, applicable to audit, compensation and nominating committee members, and is not “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act.
Item 14.
Item 14. Principal Accounting Fees and Services
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for Pioneer’s audit of annual financial statements and for review of financial statements included in Pioneer’s Form 10-Q’s or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
2011 - $30,968 - Manning Elliott LLP - Chartered Accountants
2010 - $14,875 - Manning Elliott LLP - Chartered Accountants
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of Pioneer’s financial statements and are not reported in the preceding paragraph:
2012 - $nil - Manning Elliott LLP - Chartered Accountants
2011 - $nil - Manning Elliott LLP - Chartered Accountants
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
2012 - $nil - Manning Elliott LLP - Chartered Accountants
2011 - $nil - Manning Elliott LLP - Chartered Accountants
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
2012 - $nil - Manning Elliott LLP - Chartered Accountants
2011 - $nil - Manning Elliott LLP - Chartered Accountants
(6) The percentage of hours expended on the principal accountant’s engagement to audit Pioneer’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was nil %.
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
1. Financial Statements
Audited financial statements of Pioneer Exploration Inc. have been included in Item 8 above.
2. Financial Statement Schedules
All schedules for which provision is made in Regulation S-X are either not required to be included herein under the related instructions or are inapplicable or the related information is included in the footnotes to the applicable financial statement and, therefore, have been omitted from this Item 15.
3. Exhibits
All Exhibits required to be filed with the Form 10-K are included in this annual report or incorporated by reference to Pioneer’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 333-135743 and SEC File Number 000-53784.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Pioneer Exploration Inc. has caused this report to be signed on its behalf by the undersigned duly authorized person.
PIONEER EXPLORATION INC.
By:
/s/ Angelo Scola
Name:
Angelo Scola
Title:
Director and CEO
Dated:
December 14, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of Pioneer Exploration Inc. and in the capacities and on the dates indicated have signed this report below.
Signature
Title
Date
/s/ Angelo Scola
ANGELO SCOLA
President, Chief Executive Officer,
Principal Executive Officer,
Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer
Treasurer, and Corporate Secretary
Member of the Board of Directors
December 21, 2012