10-Q
2012-11-30
false
Pioneer Exploration Inc.
0001364123
--08-31
49764500
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<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">1 - Nature of Operations and Going Concern</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The Company is a Development Stage Company, as defined by Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 915, <i>Development Stage Enterprises</i>. The Company’s past and planned future principal business is providing the safe disposal of waste products by creating commercially viable green products.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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 November 30, 2012, the Company has a working capital deficiency of </font><font lang="EN-CA">$1,228,187</font><font lang="EN-CA"> and has an accumulated deficit of </font><font lang="EN-CA">$1,277,952</font><font lang="EN-CA"> 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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;margin-left:21.3pt;text-align:justify;text-indent:-21.3pt'><font lang="EN-CA">2 - Summary of Significant Accounting Policies</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">a)  Basis of Presentation</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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. IBA Green Inc. is deemed to have acquired the net assets of Pioneer Exploration Inc. on October 28, 2011.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">b)  Interim Financial Statements</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2012, included in the Company’s Annual Report on Form 10-K filed on December 21, 2012, with the SEC.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at November 30, 2012, and the results of its operations and cash flows for the three month period ended November 30, 2012 and 2011. The results of operations for the period ended November 30, 2012 are not necessarily indicative of the results to be expected for future quarters or the full year.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">c)  Use of Estimates</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.  </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">d)  Cash and Cash Equivalents</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">e)  Long-Lived Assets</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">f)  Patents</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">g)  Financial Instruments and Fair Value Measurements</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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:</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The Company’s financial instruments consist principally of cash, accounts payable, loan payable, amounts due to a related party and convertible notes payable. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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, loan 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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of November 30, 2012 as follows:</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="522" colspan="5" valign="bottom" style='width:391.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value Measurements Using</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Quoted Prices in</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Significant</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="100" valign="top" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Active Markets</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Other</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Significant</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="100" valign="top" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>For Identical</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Observable</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Unobservable</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Balance as of</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Balance as of</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Instruments</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Inputs</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Inputs</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>November 30,</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>August 31,</font></p> </td> </tr> <tr style='height:13.5pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 1)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 2)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 3)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>2012</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>2012</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Assets: </font></p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> </tr> <tr style='height:1.0pt'> <td width="57" valign="bottom" style='width:43.1pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Cash </font></p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>134</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>–</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>–</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>134</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>202</font></p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>As at November 30, 2012, there were no liabilities presented on the Company’s balance sheet on a recurring basis.</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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.</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">h)  Income Taxes</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, <i>Income Taxes</i>. 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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">i)  Foreign Currency Translation</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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, <i>Foreign Currency Translation Matters</i>. 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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">j)  Comprehensive Income</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%;letter-spacing:-.15pt'>ASC 220, <i>Comprehensive Income</i> establishes standards for the reporting and display of other comprehensive income and its components in the financial statements. During the three months ended November 30, 2012 and 2011, the Company had no items that represent other comprehensive income.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">k)  Basic and Diluted Net Income (Loss) Per Share</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>The Company computes net income (loss) per share in accordance with ASC 260, <i>Earnings per Share</i>. 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 November 30, 2012, the Company had </font><font style='line-height:115%'>1,208,000</font><font style='line-height:115%'> potentially dilutive shares outstanding.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">l)  Stock-based Compensation</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>In accordance with ASC 718, <i>Compensation - Stock Based Compensation </i>and ASC 505,<i> Equity Based Payments to Non-Employees</i>, 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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">m)  Recent Accounting Pronouncements</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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.</font></p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;line-height:normal'>3 - Acquisition of IBA Green Inc. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">On October 28, 2011, the Company acquired 100% of IBA Green Inc. (“IBA”) in exchange for </font><font lang="EN-CA">38,500,000</font><font lang="EN-CA"> 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. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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, <i>Business Combinations</i>. 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. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">IBA Green Inc. is deemed to be the continuing entity for accounting purposes. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The assets acquired and liabilities assumed from Pioneer are as follows:</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA"> </font></p> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%;border-collapse:collapse'> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%;display:none'>.</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> </tr> <tr> <td valign="top" style='border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> </tr> <tr> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Cash </font></p> </td> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>773</font></p> </td> </tr> <tr> <td valign="top" style='padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Accounts payable</font></p> </td> <td valign="top" style='padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(111,067)</font></p> </td> </tr> <tr> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Accrued liabilities</font></p> </td> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(32,296)</font></p> </td> </tr> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Convertible notes payable</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(171,000)</font></p> </td> </tr> <tr> <td valign="top" style='border:none;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='border:none;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'> </p> </td> </tr> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Net liabilities assumed</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(313,590)</font></p> </td> </tr> </table> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">4 - Related Party Transactions</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>a)  As at November 30, 2012, the Company is indebted to the President of the Company and a company under common control for $672,319 (August 31, 2012 - $541,553), representing management fees and expenditures paid on behalf of the Company. These amounts are unsecured, non-interest bearing, and due on demand.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>b)  During the three months ended November 30, 2012, the Company incurred management fees of $125,125 (2011 - $126,750) provided by an officer of the Company.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>5 - Note Receivable</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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 November 30, 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 November 30, 2012.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">6 - Convertible Notes Payable</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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. On November 29, 2012, the Company renegotiated the promissory note payable (Note 6(g)).</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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. On November 29, 2012, the Company renegotiated the promissory note payable (Note 6(g)).</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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. On November 29, 2012, the Company renegotiated the promissory note payable (Note 6(g)).</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>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.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>g)  On November 29, 2012, the Company negotiated an additional $25,000 in financing from Blue Cove Holdings Inc. (“Blue Cove”) and renegotiated several promissory notes payable entered into previously under the following terms:</p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-autospace:none'><font lang="EN-CA">a.  All existing promissory notes held by Blue Cove (see Note 6(b), (c) and (d)), including the additional $25,000 in financing, be renegotiated and converted into a single </font><font lang="EN-CA">$126,000</font><font lang="EN-CA"> convertible promissory note (“New Note”); and</font></p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-autospace:none'><font lang="EN-CA">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 </font><font lang="EN-CA">$0.25</font><font lang="EN-CA"> for a period of 12 months from conversion. </font></p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin:0in;margin-bottom:.0001pt;text-autospace:none'><font lang="EN-CA">As at November 30, 2012, the additional $25,000 in financing has not been distributed to the Company.</font></p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin-top:8.0pt;margin-right:0in;margin-bottom:0in;margin-left:.25in;margin-bottom:.0001pt;text-align:justify;margin:0in;margin-bottom:.0001pt;text-autospace:none'><font lang="EN-CA">The Company evaluated the modification and determined that the lender did not grant a concession. The present value of the future cash flows of the modified debt was less than 10% different than the cash flows of the original debt, but the change in the conversion feature resulted in a change of greater than 10%; therefore, it was determined that the original and new debt instruments are substantially different. As a result, the modification was treated as an extinguishment of the debt, however no gain or loss is recognized as the fair value of the debt remains the same.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">7 - Loan Payable</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>At November 30, 2012, the Company owed $29,081 (CDN - $28,856) (August 31, 2012 - $29,274 (CDN - $28,856)) to a former Director of the Company.  The loan is unsecured, non-interest bearing and due on demand.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">8 - Subsequent event</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">Subsequent to November 30, 2012 the Company received the additional </font><font lang="EN-CA">$25,000</font><font lang="EN-CA"> in financing as per Note 6(g)</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">a)  Basis of Presentation</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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. IBA Green Inc. is deemed to have acquired the net assets of Pioneer Exploration Inc. on October 28, 2011.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">b)  Interim Financial Statements</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2012, included in the Company’s Annual Report on Form 10-K filed on December 21, 2012, with the SEC.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at November 30, 2012, and the results of its operations and cash flows for the three month period ended November 30, 2012 and 2011. The results of operations for the period ended November 30, 2012 are not necessarily indicative of the results to be expected for future quarters or the full year.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">c)  Use of Estimates</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.  </font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">d)  Cash and Cash Equivalents</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. </font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">e)  Long-Lived Assets</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">f)  Patents</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">g)  Financial Instruments and Fair Value Measurements</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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:</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">The Company’s financial instruments consist principally of cash, accounts payable, loan payable, amounts due to a related party and convertible notes payable. </font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">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, loan 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.</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of November 30, 2012 as follows:</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%;border-collapse:collapse'> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="522" colspan="5" valign="bottom" style='width:391.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Fair Value Measurements Using</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Quoted Prices in</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Significant</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="100" valign="top" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Active Markets</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Other</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Significant</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> <td width="100" valign="top" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'> </p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>For Identical</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Observable</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Unobservable</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Balance as of</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Balance as of</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Instruments</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Inputs</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>Inputs</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>November 30,</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>August 31,</font></p> </td> </tr> <tr style='height:13.5pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 1)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 2)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>(Level 3)</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;border-bottom:solid black 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>2012</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.5pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>2012</font></p> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> </tr> <tr style='height:12.75pt'> <td width="57" valign="bottom" style='width:43.1pt;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Assets: </font></p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;padding:0in 5.4pt 0in 5.4pt;height:12.75pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> </tr> <tr style='height:1.0pt'> <td width="57" valign="bottom" style='width:43.1pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Cash </font></p> </td> <td width="123" valign="bottom" style='width:92.15pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>134</font></p> </td> <td width="88" valign="bottom" style='width:65.9pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>–</font></p> </td> <td width="104" valign="bottom" style='width:77.95pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>–</font></p> </td> <td width="107" valign="bottom" style='width:80.45pt;border:none;border-bottom:solid black 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>134</font></p> </td> <td width="100" valign="bottom" style='width:75.0pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>202</font></p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>As at November 30, 2012, there were no liabilities presented on the Company’s balance sheet on a recurring basis.</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">h)  Income Taxes</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, <i>Income Taxes</i>. 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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">i)  Foreign Currency Translation</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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, <i>Foreign Currency Translation Matters</i>. 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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">j)  Comprehensive Income</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%;letter-spacing:-.15pt'>ASC 220, <i>Comprehensive Income</i> establishes standards for the reporting and display of other comprehensive income and its components in the financial statements. During the three months ended November 30, 2012 and 2011, the Company had no items that represent other comprehensive income.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">k)  Basic and Diluted Net Income (Loss) Per Share</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>The Company computes net income (loss) per share in accordance with ASC 260, <i>Earnings per Share</i>. 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 November 30, 2012, the Company had </font><font style='line-height:115%'>1,208,000</font><font style='line-height:115%'> potentially dilutive shares outstanding.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">l)  Stock-based Compensation</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>In accordance with ASC 718, <i>Compensation - Stock Based Compensation </i>and ASC 505,<i> Equity Based Payments to Non-Employees</i>, 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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA">m)  Recent Accounting Pronouncements</font></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>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.</font></p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><font lang="EN-CA"> </font></p> <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%;border-collapse:collapse'> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%;display:none'>.</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center'><font style='line-height:115%'>$</font></p> </td> </tr> <tr> <td valign="top" style='border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='border:none;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> </tr> <tr> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Cash </font></p> </td> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>773</font></p> </td> </tr> <tr> <td valign="top" style='padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Accounts payable</font></p> </td> <td valign="top" style='padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(111,067)</font></p> </td> </tr> <tr> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Accrued liabilities</font></p> </td> <td valign="top" style='background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(32,296)</font></p> </td> </tr> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Convertible notes payable</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(171,000)</font></p> </td> </tr> <tr> <td valign="top" style='border:none;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'> </p> </td> <td valign="top" style='border:none;background:#DBE5F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'> </p> </td> </tr> <tr> <td valign="top" style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt'><font style='line-height:115%'>Net liabilities assumed</font></p> </td> <td valign="top" style='border:none;border-bottom:solid windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:12.6pt;margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:right'><font style='line-height:115%'>(313,590)</font></p> </td> </tr> </table>
1228187
1277952
134
202
1208000
38500000
773
-111067
-32296
-171000
-313590
672319
541553
125125
126750
100000
50000
200000
0.25
50000
41667
1.20
36000
20000
1.80
15000
60000
0.25
10000
100000
0.10
10000
100000
0.10
25000
126000
0.25
29081
29274
25000
0001364123
2012-09-01
2012-11-30
0001364123
2012-11-30
0001364123
2012-08-31
0001364123
2011-09-01
2011-11-30
0001364123
2011-07-21
2012-11-30
0001364123
2011-08-31
0001364123
2011-11-30
0001364123
2011-10-28
0001364123
2012-11-29
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