Nevada
|
|
90-0822950
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.)
|
20 Iroquois Street
Niagara Falls, NY 14303
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
x
|
|
|||
|
|
||
|
4 | ||
|
|
||
|
13 | ||
|
|
||
|
21 | ||
|
|
||
|
21 | ||
|
|
||
|
22 | ||
|
|
||
|
23 | ||
|
|||
|
|
||
|
24 | ||
|
|
||
|
25 | ||
|
|
||
|
26 | ||
|
|
||
|
37 | ||
|
|
||
|
38 | ||
|
|
||
|
39 | ||
|
|
||
|
39 | ||
|
|
||
|
40 | ||
|
|||
|
|
||
|
40 | ||
|
|
||
|
42 | ||
|
|
||
|
48 | ||
|
|
||
|
49 | ||
|
|
||
|
49 | ||
|
|
||
PART IV | |||
|
49 |
BUSINESS
|
JBI, Inc.
|
-
|
Parent company with corporate office in Niagara Falls, NY;
|
|
|
|
Plastic2Oil of NY #1, LLC
|
-
|
Operates our P2O business in Niagara Falls, NY.
|
|
|
|
JBI (Canada) Inc.
|
-
|
Conducts our P2O business in Canada, including management of our fuel blending site.
|
●
|
Manufacturing and operating multiple processors at our Niagara Falls, NY site;
|
|
|
●
|
From inception, the processors were designed with safety and green emissions as top priorities.
|
|
|
●
|
Standardization and modularization of the components of our processors;
|
|
|
●
|
Ability to continuously feed waste plastic 24 hours a day;
|
|
|
●
|
Approximately 86% of waste plastic by weight is converted to liquid fuel conversion;
|
|
|
●
|
Approximately 8% of waste plastic by weight is converted to gas and is used to fuel the process;
|
|
|
●
|
Operating at atmospheric pressure, not susceptible to pinhole leaks and other problems with pressure and vacuum-based systems;
|
|
|
●
|
No requirement for incinerators, thermal oxidizers or scrubbers and no stack monitoring is necessary;
|
|
|
●
|
Three stack tests (two on the initial processor and one on the second processor) conducted by Conestoga-Rovers & Associates (“CRA”), prove emissions are extremely low;
|
|
|
●
|
Process validation by SAIC Energy, Environment & Infrastructure, LLC and IsleChem, LLC.
|
●
|
Permitted to operate three processors commercially in New York by the NYSDEC; and
|
License/Permit
|
Issuing Authority
|
Registration Number
|
Issue/Expiration Date
|
|||
Air Permit
|
NYSDEC
|
9-2911-00348/00002
|
06/30/2014
|
|||
Solid Waste Permit
|
NYSDEC
|
9-2911-00348/00003
|
06/30/2014
|
|||
Bulk Fuel Blending License
|
Ontario Technical Standards & Safety Authority
|
000184322
|
10/12/2014
|
|||
Waste Disposal Site
|
Ontario Ministry of the Environment
|
A121029
|
Perpetual (subject to annual reviews)
|
Emissions
|
Units
|
Original Stack Test
(2010) – Processor #1
|
Final Stack Test
(Dec. 2011) – Processor #1
|
Stack Test
(Dec. 2012) – Processor #2
|
||||
CO – Carbon Monoxide
|
ppm
|
3.16
|
3.1
|
3.7
|
||||
SO
2
- Sulphur Dioxide
|
ppm
|
0.23
|
0.02
|
0.39
|
||||
NOx – Oxides of Nitrogen
|
ppm
|
86.4
|
15.1
|
21.3
|
||||
TNMHC – Total Non-Methane Hydrocarbons
|
ppm
|
0.25
|
3.92
|
0.62
|
||||
PM – Particulate Matter
|
Lbs./hr.
|
0.016
|
0.002
|
0.012
|
||||
Hexane
|
Lbs./hr.
|
Not tested
|
0.00001
|
0.0013
|
●
|
Get the Right Material to Maximize Throughput
. Although the P2O processor can process many different types of plastic and create consistent fuels, we will focus on the types of plastic that will maximize the machine’s productivity. This is typically high density material.
|
●
|
Contract for Long-Term Consistent Feedstock Supply
. By contracting with our suppliers, we are able to gain commitments for consistent flows of feedstock. This also allows us to more accurately forecast our feedstock supply and fuel outputs. An additional benefit of contracting with suppliers is that we are able to rely on this material flow as it relates to our continued growth planning.
|
●
|
Cost to the Processor
. We look at all feedstock opportunities considering the “cost to the processor”. This means we consider including the cost is the price we pay to the supplier, the cost of transportation or our costs to pre-process the feedstock material, the critical thing is the total cost incurred for “ready to process” material.
|
RISK FACTORS
|
●
|
the financial success of our P2O business and processors;
|
|
|
●
|
the timing of, and costs involved in, entering into agreements with suitable industrial partners, and the timing and terms of those agreements;
|
|
|
●
|
the cost of constructing P2O processors and the amount of other capital expenditures related to site development;
|
|
|
●
|
our ability to negotiate distribution or further sale agreements for the fuel we produce, and the timing and terms of those agreements;
|
|
|
●
|
the timing of, and costs involved in obtaining, the necessary government or regulatory approvals and permits
|
●
|
our R&D activities;
|
|
|
●
|
our plans to expand our business through industrial partnerships;
|
|
|
●
|
our activities in negotiating agreements necessary in connection with the commercial scale operation of the P2O business; and
|
|
|
●
|
the development of the P2O business, generally.
|
●
|
public perception issues associated with the fact that P2O fuel is produced from waste plastics;
|
●
|
public perception that the use of P2O fuel will require excessive burner, boiler or engine modifications;
|
●
|
actual or perceived problems with P2O fuel quality or performance; and
|
●
|
to the extent that P2O fuel is used in transportation applications, concern that using P2O fuel will void engine warranties.
|
UNRESOLVED STAFF COMMENTS
|
PROPERTIES
|
LEGAL PROCEEDINGS
|
(REMOVED AND RESERVED)
|
MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Quarter
|
|
High
|
|
|
Low
|
|
||
2012:
|
|
|
|
|
|
|
||
First Quarter
|
|
$
|
2.33
|
|
|
$
|
0.86
|
|
Second Quarter
|
|
|
1.40
|
|
|
|
0.91
|
|
Third Quarter
|
|
|
1.41
|
|
|
|
0.78
|
|
Fourth Quarter
|
|
|
0.97
|
|
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
2013:
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
1.49
|
|
|
$
|
0.61
|
|
Second Quarter
|
|
|
0.75
|
|
|
|
0.29
|
|
Third Quarter
|
|
|
0.50
|
|
|
|
0.32
|
|
Fourth Quarter
|
|
|
0.38
|
|
|
|
0.09
|
|
Plan Name
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
Weighted average exercise
price of outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance under equity
compensation plans
|
|||||||||
Equity compensation plans approved by security holders
|
|
|
|
|||||||||
|
|
|
|
|||||||||
JBI, Inc. 2012 Long-Term Incentive Plan
|
6,806,000 | 1.21 |
3,194,000
|
|||||||||
Equity Compensation Plans not Approved by Stockholders
|
N/A | N/A | N/A |
SELECTED FINANCIAL DATA
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
●
|
Organizational Structure – Our previous staffing model did not allow for enough comprehensive evaluation of the processors’ performance and we have decided that the addition of a chemical engineer to the operating team should allow for continuous optimal performance of the processor, as this addition will be able to supplement the knowledge of the current teams in ensuring proper performance;
|
●
|
Hardware optimization– As our processor and technology are still continuing to evolve, we continue to need to tweak the processor and the components in order to ensure that we are getting the optimal performance from all of the components of the processor. From time to time, when we identify components that do not perform as we had planned, we are required to shut the processor down to replace the part, potentially perform additional testing on that specific piece of equipment and ultimately replace the component with a better version of the component to increase productivity. In several instances, we have designed technology that is unique to our process to reduce component costs. After the technology is tested, we seek vendors who can implement our technology into their device. The final result has been a device manufactured by a vendor at a fraction of the cost an “off the shelf” general-purpose device;
|
●
|
Unseasonably cold temperatures in the winter of 2013/2014
. The temperature in winter 2013 was far below what we had ever operated through, with some periods sustaining below zero Fahrenheit temperatures. This low temperature caused many local issues with off-the-shelf diesel freezing and gelling. Our Fuel Oil #6 meets ASTM D396 fuel standards which include a pour point (or freezing point) of -6 C pour point (21° F). The temperature often dropped below 5°F and at some periods below 0°F. These unseasonably cold temperatures and high winds froze our fuel and in some places our new water lines. We experimented with pour point depressants used in diesel for artic temperatures. After testing and verifying compatibility and functionality, we secured a good pour point depressant that will allow our fuel to flow at temperatures down to -30°C or -22°F. Subsequently to the weather damage and condenser failure (see below), we idled our processors in late December 2013. We also temporarily reduced our operation and fabrication work force in January 2014. We repaired temperature damage from the 2013/2014 winter in the spring of 2014. We replaced the new condensers on Processor #3 with condensers that have historically never failed in the process. We are adding equipment to our facility support systems to inject additives for lubricity and pour point to meet off road diesel use. The additives we tested performed well in off-road diesel equipment and the pour depressant is tested to work in extremely cold temperatures.
|
●
|
The failure of new condensers installed throughout the plant of 2013/2014
. We use a device called a condenser to cool hot liquids or heat cold liquids. Numerous condensers are located throughout a processor and plant. Our legacy condensers were performing well over the past few years however there were different sizes and manufacturers used. This posed lead time problems and higher costs when sourcing parts for future sales. In the spring of 2013, we standardized, acquired and installed new condensers for cooling to standardize all condensers across the factory. We also designed, procured, and installed central plant support systems for our processors including: centralized water chilling and storage, centralized gas compression for collect, compress and distribute off-gas generated by processors, centralized hot oil system for cooling high temperature fluids, and developed a site control system to monitor all of the auxiliary plant support systems. In late December 2013, the new condensers installed across the plant and in the processors began to fail. Over a six week period, all the new condensers failed in operation. Upon reviewing the failure in the condenser, we found the stitch welding used to manufacture them was defective. Management believes we have developed a comprehensive front-line QC procedure to ensure plastic is not littered tools, steel or bad fillers. All new vendor equipment must be tested on our R&D system, Processor#1, before deploying on other processors. This will mitigate the risk of poor quality components from being sources or installed without significant testing.
|
●
|
Bad heat transfer fluid (HTF).
In 2013, the Company was permitted to run used heat transfer liquid HTF, such as used oils, in the process. This involved a significant learning curve to develop testing protocols to determine if the liquid being received is in fact used heat transfer liquid. The permit and procedures describe numerous tests that must be conducted to ensure the HTF does not contain hazardous chemicals. Some unscrupulous suppliers will attempt and sell or deliver emulsions or other liquid products that look like HTF but are in fact not. After 2 months of operating HTF from a variety of sources, management was able to develop testing methods to determine if the HTF was in fact 100% HTF.
|
●
|
Other causes of significant downtime issues in 2013.
|
|
o
|
Bad material in waste Plastic.
The Company has developed a comprehensive front-line QC procedure to ensure plastic is not littered tools, steel or bad fillers.
|
|
o
|
Water & snow in waste plastic.
The Company has developed a comprehensive front-line testing procedure to stop large amounts of water from being fed into the process.
|
|
o
|
Emergency Shutdowns.
Several emergency plant shutdowns for plant evacuations due to other local adjacent factories having serious fires or emergency releases. The Company installed a plant evacuation system and developed a better protocol to halt the processor when having to evacuate the site due to external factors.
|
|
o
|
Installation of new facility subsystems for Processors #1,#2 & #3
to eliminate downtime from old systems.
|
|
o
|
Installation of Processor #3
which is now operational.
|
|
o
|
Routine maintenance & shutdown.
|
●
|
feedstock procurement costs;
|
●
|
overhead incurred at our Niagara Falls Facility related to the operation of the processors; and
|
●
|
freight costs incurred in shipping of plastics and fuels.
|
●
|
personnel-related costs including employee payroll, payroll taxes, stock based compensation and insurance;
|
●
|
plant and processor related costs including repairs and maintenance, processing and welding consumables, safety equipment and related costs;
|
●
|
professional fees including legal fees, accounting fees including audit and tax professional costs, certain public company required fees, consulting fees and other professional and administrative costs;
|
●
|
insurance costs consisting of pollution, workers compensation, general liability, and directors and officers insurance policies;
|
●
|
compliance related costs including environmental consulting fees, stack test and other related testing costs and permitting costs;
|
●
|
depreciation expense related to our property plant and equipment; and
|
●
|
Impairment expense related to our property, plant and equipment.
|
Revenue
|
|
Year ended
December 31,
2013
|
|
|
Year ended
December 31,
2012
|
|
|
% Change
|
|
|||
P2O Revenue
|
|
|
|
|
|
|
|
|
|
|||
Fuels
|
|
$
|
599,413
|
|
|
$
|
609,553
|
|
|
|
(1.7
|
)
|
|
|
|
|
|||||||||
Total P2O Revenue
|
|
|
599,413
|
|
|
|
609,553
|
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Business
|
|
|
93,712
|
|
|
|
70,381
|
|
|
|
33.1
|
|
TOTAL REVENUE
|
|
$
|
693,125
|
$
|
679,934
|
|
|
|
1.9
|
|
|
|
Gallons Produced
(Year ended
December 31,)
|
|
|
Gallons Sold
(Year ended
December 31,)
|
|
||||||||||||||||||
Fuel Type
|
|
2013
|
|
|
2012
|
|
|
% Change
|
|
|
2013
|
|
|
2012
|
|
|
% Change
|
|
||||||
Fuel Oil No. 6
|
|
|
45,122
|
|
|
|
121,847
|
|
|
|
(63.0
|
)
|
|
|
45,190
|
|
|
|
126,636
|
|
|
|
(64.3
|
)
|
Fuel Oil No. 2
|
|
|
199,523
|
|
|
|
105,859
|
|
|
|
88.5
|
|
|
|
168,480
|
|
|
|
108,098
|
|
|
|
55.9
|
|
Naphtha
|
|
|
93,168
|
|
|
|
89,518
|
|
|
|
4.1
|
|
|
|
88,338
|
|
|
|
89,518
|
|
|
|
(1.3
|
)
|
TOTAL
|
|
|
337,813
|
|
|
|
317,224
|
|
|
|
6.5
|
|
|
|
302,008
|
|
|
|
324,252
|
|
|
|
(6.9
|
)
|
Cost of Goods Sold
|
|
Year ended
December 31,
2013
|
|
|
Year ended
December 31,
2012
|
|
|
% Change
|
|
|||
P2O COGS
|
|
|
|
|
|
|
|
|
|
|||
Fuels
|
|
$
|
690,488
|
|
|
|
707,293
|
|
|
|
(2.4
|
)
|
|
|
|
|
|||||||||
Total P2O COGS
|
|
|
690,488
|
|
|
$
|
707,293
|
|
|
|
(2.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Business
|
|
|
61,072
|
|
|
|
52,097
|
|
|
|
17.2
|
|
TOTAL COGS
|
|
$
|
751,560
|
|
|
$
|
759,390
|
|
|
|
(1.0
|
)
|
Gross Profit
|
Year ended
December 31,
2013
|
Gross Profit
% - Year
ended
December 31,
2013
|
Year ended
December 31,
2012
|
Gross Profit
% - Year
ended
December 31,
2012
|
||||||||||||
P2O |
|
|
|
|
||||||||||||
Fuels
|
$ | (91,075 | ) | (15.2 | ) | $ | (97,740 | ) | (16.0 | ) | ||||||
Total P2O Gross Loss
|
(91,075 | ) | (15.2 | ) | (97,740 | ) | (16.0 | ) | ||||||||
Data Business Gross Profit
|
32,640 | 34.8 | 18,284 | 26.0 | ||||||||||||
TOTAL GROSS LOSS
|
(58,435 | ) | (8.4 | ) | (79,456 | ) | (11.7 | ) |
Operating Expenses
|
|
Fiscal Year
Ended
December 31,
2013
($)
|
|
|
Fiscal Year
Ended
December 31,
2012
($)
|
|
||
Selling, General and Administrative expenses
|
|
|
8,415,210
|
|
|
|
11,646,690
|
|
Depreciation & Accretion
|
|
|
1,031,077
|
|
|
|
633,382
|
|
Research & Development
|
|
|
465,671
|
|
|
|
445,947
|
|
Impairment Loss
|
|
|
1,122,829
|
|
|
|
191,466
|
|
Total Operating Expenses
|
|
|
11,034,787
|
|
|
|
12,917,485
|
|
|
|
Fiscal Year
Ended
December 31,
2013
($)
|
|
|
Fiscal
Year Ended
December 31,
2012
($)
|
|
||
Cash Flow from Operating Activities
|
|
|
|
|
|
|
||
Net Loss from Continuing Operations
|
|
|
(11,206,806
|
)
|
|
|
(12,693,771
|
)
|
Net Loss from Discontinued Operations
|
|
|
(2,027,459
|
)
|
|
|
(628,434
|
)
|
Net Loss
|
|
|
(13,234,265
|
)
|
|
|
(13,322,205
|
)
|
Net Cash Used in Operating Activities
|
|
|
(7,607,520
|
)
|
|
|
(10,054,621
|
)
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
Net Cash Used in Investing Activities
|
|
|
(3,227,003
|
)
|
|
|
(4,043,386
|
)
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
|
7,072,752
|
|
|
|
15,552,258
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of Year
|
|
|
3,965,720
|
|
|
|
2,511,469
|
|
Cash and Cash Equivalents at End of Year
|
|
|
203,949
|
|
|
|
3,965,720
|
|
Leasehold improvements
|
lesser of useful life or term of the lease
|
Machinery and office equipment
|
3-15 years
|
Furniture and fixtures
|
7 years
|
Office and industrial buildings
|
25 years
|
●
|
Level 1 - Quoted prices in active markets for identical assets or liabilities
|
●
|
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities
|
●
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
F-1
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-8
|
|
F-10
|
ACCOUNTING › CONSULTING › TAX
701 EVANS AVENUE, 8TH FLOOR, TORONTO ON, M9C 1A3
P: 416.626.6000 F: 416.626.8650
MNP.ca
|
2013
|
2012
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
203,949
|
$
|
3,965,720
|
||||
Cash held in attorney trust (Note 2)
|
12,637
|
184,789
|
||||||
Restricted cash (Note 2)
|
100,122
|
100,022
|
||||||
Accounts receivable, net of allowance of $91,710 (2012 - $57,991)
|
80,814
|
240,139
|
||||||
Inventories (Note 4)
|
147,120
|
240,096
|
||||||
Short-term notes receivable (Note 6)
|
-
|
487,722
|
||||||
Prepaid expenses and other current assets
|
76,305
|
419,849
|
||||||
TOTAL CURRENT ASSETS
|
620,947
|
5,638,337
|
||||||
-
|
||||||||
PROPERTY, PLANT AND EQUIPMENT, NET
(Note 5)
|
7,184,008
|
6,886,059
|
||||||
Deposits (Note 2)
|
1,484,453
|
839,005
|
||||||
TOTAL ASSETS
|
$
|
9,289,408
|
$
|
13,363,401
|
||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
1,510,611
|
$
|
1,608,575
|
||||
Accrued expenses
|
851,532
|
1,081,100
|
||||||
Customer advances
|
26,120
|
26,120
|
||||||
Accrued lease obligation – current
(Note 10 and 19)
|
83,466
|
-
|
||||||
Long-Term Debt, mortgage payable and capital leases – current (Note 9)
|
23,618
|
23,068
|
||||||
TOTAL CURRENT LIABILITIES
|
2,495,347
|
2,738,863
|
||||||
LONG-TERM LIABILITIES
|
||||||||
Asset retirement obligations (Note 2)
|
30,306
|
29,423
|
||||||
Accrued lease obligation (Note 10 and 19)
|
383,388
|
-
|
||||||
Long-Term Debt, mortgage payable and capital leases (Note 9)
|
2,532,079
|
314,716
|
||||||
TOTAL LIABILITIES
|
5,441,120
|
3,083,002
|
||||||
Commitments and Contingencies (Note 10)
|
||||||||
Subsequent Events (Note 22)
|
||||||||
STOCKHOLDERS' EQUITY (Notes 11 and 22)
|
||||||||
Preferred stock, Series B, par $0.001; 2,300,000 shares authorized, convertible into 16,100,000 shares of Common Stock, 2,204,100 shares issued and outstanding (2012 – Nil)
|
7,648,690
|
-
|
||||||
Preferred stock, Series B, beneficial conversion feature (“BCF”) discount
|
(1,713,123
|
)
|
-
|
|||||
Preferred Stock Series B Subscribed
|
-
|
1,531,814
|
||||||
Common stock, par $0.001; 150,000,000 authorized, 90,692,243 shares issued and outstanding
(2012 – 89,855,816)
|
90,692
|
89,857
|
||||||
Common Stock Warrants
|
1,056,970
|
2,037,450
|
||||||
Common stock subscribed, nil shares at cost in 2013; (2012 – 85,415)
|
-
|
60,818
|
||||||
Preferred stock, Series A, par $0.001; 1,000,000 authorized, 1,000,000 shares issued and outstanding (2012 – 1,000,000)
|
1,000
|
1,000
|
||||||
Additional paid in capital
|
57,882,326
|
54,443,462
|
||||||
Accumulated deficit
|
(61,118,267
|
)
|
(47,884,002
|
)
|
||||
TOTAL STOCKHOLDERS' EQUITY
|
3,848,288
|
10,280,399
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
9,289,408
|
$
|
13,363,401
|
2013
|
2012
|
|||||||
SALES
|
||||||||
P20
|
$
|
599,413
|
$
|
609,553
|
||||
Data Business
|
93,712
|
70,381
|
||||||
693,125
|
679,934
|
|||||||
COST OF SALES
|
||||||||
P20
|
690,488
|
707,293
|
||||||
Data Business
|
61,072
|
52,097
|
||||||
751,560
|
759,390
|
|||||||
GROSS LOSS
|
(58,435
|
)
|
(79,456
|
) | ||||
OPERATING EXPENSES
|
||||||||
Selling, general and administrative expenses
|
8,415,210
|
11,646,690
|
||||||
Depreciation of property, plant and equipment
|
980,377
|
633,382
|
||||||
Accretion of long-term liability
|
50,700
|
-
|
||||||
Research and development expenses
|
465,671
|
445,947
|
||||||
Impairment loss – property, plant and equipment
|
1,122,829
|
191,466
|
||||||
TOTAL OPERATING EXPENSE
|
11,034,787
|
12,917,485
|
||||||
LOSS FROM CONTINUING OPERATIONS
|
(11,093,222
|
)
|
(12,996,941
|
)
|
||||
OTHER INCOME (EXPENSE)
|
||||||||
Interest expense, net
|
(119,580
|
)
|
(2,331
|
)
|
||||
Gain on mark-to-market adjustment of equity derivative liability
|
-
|
305,798
|
||||||
Other income, net
|
23,765
|
(297
|
)
|
|||||
(95,815
|
)
|
303,170
|
||||||
Disposal of assets
|
(17,769
|
) |
-
|
|||||
LOSS BEFORE INCOME TAXES
|
(11,206,806
|
)
|
(12,693,771
|
)
|
||||
INCOME TAXES (Note 8)
|
-
|
-
|
||||||
NET LOSS FROM CONTINUING OPERATIONS
|
(11,206,806
|
)
|
(12,693,771
|
)
|
||||
NET LOSS FROM DISCONTINUED OPERATIONS (Note 19)
|
(2,027,459
|
)
|
(628,434
|
)
|
||||
NET LOSS
|
$
|
(13,234,265
|
)
|
$
|
(13,322,205
|
)
|
||
Basic and diluted net loss per share from continuing operations (Note 20)
|
$
|
(0.12
|
)
|
$
|
(0.15
|
)
|
||
Basic and diluted net loss per share from discontinued operations (Note 20)
|
(0.02
|
)
|
(0.01
|
)
|
||||
Total basic and diluted net loss per share (Note 20)
|
$
|
(0.14
|
)
|
$
|
(0.16
|
)
|
||
Weighted average number of common shares outstanding – basic and diluted
|
90,194,085
|
82,052,247
|
Common Stock
$0.001 Par Value
|
Common Stock
Subscribed
|
Common Stock
Warrants
|
Preferred
Stock – Series A
$0.001
Par Value
|
Preferred Stock
Subscribed
|
Additional
Paid in
|
Accumulated
|
Total
Stockholders’
|
|||||||||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Warrants
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2011
|
68,615,379 | $ | 68,616 | 811,538 | $ | 839,062 | - | $ | - | 1,000,000 | $ | 1,000 | - | - | $ | 35,748,538 | $ | (34,545,604 | ) | $ | 2,111,612 | |||||||||||||||||||||||||||||||
Common stock issued for services in the prior year, ranging from $0.60 to $2.38 per share
|
731,538 | 732 | (731,538 | ) | (799,062 | ) | - | - | - | - | - | - | 798,330 | - | - | |||||||||||||||||||||||||||||||||||||
Common stock issued for purchase of equipment in the prior year
|
80,000 | 80 | (80,000 | ) | (40,000 | ) | - | - | - | - | - | - | 39,920 | - | - | |||||||||||||||||||||||||||||||||||||
Common stock issued in connection with private placement, $1.00 per unit
|
3,421,000 | 3,421 | - | - | 1,710,500 | 1,744,710 | - | - | - | - | 458,414 | - | 2,206,545 | |||||||||||||||||||||||||||||||||||||||
Common stock issued as an advisory fee in connection with the private placement
|
287,000 | 287 | - | 287,000 | 292,740 | - | - | - | - | (293,027 | ) | - | ||||||||||||||||||||||||||||||||||||||||
Common stock issued for repayment of loan, $1.00 per share
|
200,000 | 200 | - | - | - | - | - | - | - | - | 199,800 | - | 200,000 | |||||||||||||||||||||||||||||||||||||||
Common stock issued for services, ranging from $0.60 to $1.48 per share
|
1,328,425 | 1,328 | - | - | - | - | - | - | - | - | 1,409,599 | - | 1,410,927 | |||||||||||||||||||||||||||||||||||||||
Common stock issued for equipment, $1.48 per share
|
30,786 | 31 | - | - | - | - | - | - | - | - | 35,089 | - | 35,120 | |||||||||||||||||||||||||||||||||||||||
Common stock issued in relation to the private placement in January 2012, relating to the price protection clause (Note 11)
|
880,250 | 880 | - | - | - | - | - | - | - | - | 907,778 | - | 908,658 | |||||||||||||||||||||||||||||||||||||||
Common stock issued as an advisory fee in relation to the private placement in January 2012, relating to the price protection clause (Note 11)
|
71,750 | 72 | - | - | - | - | - | - | - | - | (72 | ) | - | - | ||||||||||||||||||||||||||||||||||||||
Common stock issued in connection with private placement, $0.80 per share (net of advisory fee of $657 and legal and offering costs of $135,169)
|
14,153,750 | 14,154 | - | - | - | - | - | - | - | - | 11,189,912 | - | 11,204,066 |
Common Stock
$0.001 Par Value
|
Common Stock
Subscribed
|
Common
Stock
Warrants
|
Preferred
Stock – Series A
$0.001 Par Value
|
Preferred Stock
Subscribed
|
Additional
Paid in
|
Accumulated
|
Total
Stockholders’
|
|||||||||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Warrants
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||||||||||||||||||||
Common stock issued as an advisory fee in connection with the May private placement
|
657,188 | $ | 657 | - | $ | - | - | $ | - | - | $ | - | - | $ | - | $ | (657 | ) | $ | - | $ | - | ||||||||||||||||||||||||||||||
Common stock returned and retired previously issued as an advisory fee in connection with the May private placement
|
(601,250 | ) | (601 | ) | - | - | - | - | - | - | - | - | 601 | - | - | |||||||||||||||||||||||||||||||||||||
Common stock subscribed for services ranging from $0.70 to $0.73 per share
|
- | - | 85,415 | 60,818 | - | - | - | - | - | - | - | - | 60,818 | |||||||||||||||||||||||||||||||||||||||
Preferred Stock – Series B subscribed (net of issuance costs of $29,361)
|
- | - | - | - | - | - | - | - | 1,146,444 | 3,983,192 | - | - | 3,983,192 | |||||||||||||||||||||||||||||||||||||||
Preferred Stock – Series B – Beneficial Conversion Feature
|
- | - | - | - | - | - | - | - | (2,467,571 | ) | 2,467,571 | - | - | |||||||||||||||||||||||||||||||||||||||
Preferred stock – Series B – Deemed Dividend
|
- | - | - | - | - | - | - | - | - | 16,193 | - | (16,193 | ) | - | ||||||||||||||||||||||||||||||||||||||
Stock compensation expense related to granting of stock options
|
- | - | - | - | - | - | - | - | - | - | 1,481 , 666 | - | 1,481,666 | |||||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | - | - | - | (13 ,322,205 | ) | (13,322,205 | ) | |||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2012
|
89,855,816 | $ | 89,857 | 85,415 | $ | 60,818 | 1,997,500 | $ | 2,037,450 | 1,000,000 | $ | 1,000 | 1,146,444 | $ | 1,531,814 | $ | 54,443,462 | $ | (47,884,002 | ) | $ | 10,280,399 |
Common Stock
$0.001 Par Value
|
Common Stock
Subscribed
|
Common Stock
Warrants
|
Preferred Stock –
Series A
$0.001 Par Value
|
Preferred Stock –
Series B
$0.001 Par Value
|
Preferred Stock
Series B –
Beneficial Conversion
|
Preferred Stock
Subscribed
|
Additional
Paid in
|
Accumulated
|
Total Stockholders’
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Warrants
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Feature
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
|||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE – DECEMBER 31, 2012
|
89,855,816 | $ | 89,857 | 85,415 | $ | 60,818 | 1,997,500 | $ | 2,037,450 | 1,000,000 | $ | 1,000 | - | $ | - | $ | - | 1,146,444 | $ | 1,531,814 | $ | 54,443,462 | $ | (47,884,002 | ) | $ | 10,280,399 | |||||||||||||||||||||||||||||||||||||
Common stock issued for services, subscribed in the prior year, $0.73 per share
|
34,247 | 34 | (34,247 | ) | (25,000 | ) | - | - | - | - | - | - | - | - | - | 24,966 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock –Series B, issued during 2013 (net of issue costs)
|
- | - | - | - | - | - | - | - | 1,146,444 | 3,983,192 | (2,451,378 | ) | (1,146,444 | ) | (1,531,814 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock – Series B – issued during 2013 (net of issue costs)
|
- | - | - | - | - | - | - | - | 1,153,556 | 3,998,292 | (2,817,628 | ) | - | - | 2,817,628 | - | 3,998,292 | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for services, subscribed in the prior year, $0.70 per share
|
51,168 | 51 | (51,168 | ) | (35,818 | ) | - | - | - | - | - | - | - | - | - | 35,767 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for services, $0.46 per share
|
11,911 | 10 | - | - | - | - | - | - | - | - | - | - | - | 5,470 | - | 5,480 | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock - Series B, converted to Common Stock in Q3
|
520,800 | 521 | - | - | - | - | - | - | (74,400 | ) | (258,184 | ) | - | - | - | 257,663 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for services, $0.51 per share
|
7,801 | 8 | - | - | - | - | - | - | - | - | - | - | - | 3,974 | - | 3,982 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common stock subscribed for services, valued at $0.40 per share
|
- | - | 60,000 | 24,000 | - | - | - | - | - | - | - | - | - | - | - | 24,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Series B preferred stock converted to common stock subscribed.
|
- | - | 150,500 | 74,610 | - | - | - | - | (21,500 | ) | (74,610 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants to purchase shares of Common Stock for $0.54 per share
|
- | - | - | - | 3,000,000 | 910,600 | - | - | - | - | - | - | - | - | - | 910,600 | ||||||||||||||||||||||||||||||||||||||||||||||||
Reclass of expired warrants during
|
- | - | - | - | (1,854,000 | ) | (1,891,080 | ) | - | - | - | - | - | - | - | 1,891,080 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock – Series B – Deemed Dividend
|
- | - | - | - | - | - | - | - | - | - | 3,555,883 | - | - | (3,555,883 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock compensation expense related to granting of stock options.
|
- | - | - | - | - | - | - | - | - | - | - | - | - | 1,859,799 | - | 1,859,799 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for services, $0.40 per share
|
60,000 | 60 | (60,000 | ) | (24,000 | ) | - | - | - | - | - | - | - | - | 23,940 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued as an advisory fee in connection with the private placement
|
150,500 | 151 | (150,500 | ) | (74,610 | ) | - | - | - | - | - | - | - | - | 74,460 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | (13,234,265 | ) | (13,234,265 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCES - DECEMBER 31, 2013
|
90,692,243 | $ | 90,692 | - | $ | - | 3,143,500 | $ | 1,056,970 | 1,000,000 | $ | 1,000 | 2, 204,100 | $ | 7,648,690 | $ | (1,713,123 | ) | - | $ | - | $ | 57,882,326 | $ | (61,118,267 | ) | $ | 3,848,288 |
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss from Continuing Operations
|
$
|
(11,206,806
|
)
|
$
|
(12,693,771
|
)
|
||
Net loss from Discontinued Operations
|
(2,027,459
|
)
|
(628,434
|
)
|
||||
NET LOSS
|
(13,234,265
|
)
|
(13,322,205
|
)
|
||||
Items not affecting cash:
|
||||||||
Depreciation of property, plant and equipment
|
979,268
|
633,382
|
||||||
Accretion of long-term liability
|
50,700
|
-
|
||||||
Impairment loss - property, plant and equipment
|
1,122,829
|
191,466
|
||||||
Provision for uncollectible accounts
|
-
|
(33,089
|
)
|
|||||
Provision for inventory obsolescence
|
-
|
56,623
|
||||||
Gain on mark-to-market adjustment of derivative equity liability
|
-
|
(305,798
|
)
|
|||||
Other income
|
(11,269
|
)
|
(24,279
|
)
|
||||
Stock issued for services
|
1,967,869
|
1,471,745
|
||||||
Non-cash stock-based compensation
|
-
|
1,481,666
|
||||||
Recovery of uncollectible account
|
12,000
|
-
|
||||||
Accrued interest expense
|
100,000
|
-
|
||||||
Non-cash items impacting Discontinued operations
|
1,664,440
|
14,464
|
||||||
Working capital changes:
|
||||||||
Accounts receivable
|
147,325
|
12,946
|
||||||
Cash held in attorney trust
|
172,152
|
(184,789
|
)
|
|||||
Inventories
|
(176,927
|
)
|
(188,037
|
)
|
||||
Prepaid expenses
|
343,544
|
(95,971
|
)
|
|||||
Assets held for sale
|
-
|
604,766
|
||||||
Accounts payable
|
(584,436
|
)
|
(798,806
|
)
|
||||
Accrued expenses
|
(160,750
|
)
|
277,827
|
|||||
Other liabilities
|
-
|
(99,062
|
)
|
|||||
Changes attributable to discontinued operations
|
-
|
(5,590
|
)
|
|||||
NET CASH USED IN OPERATING ACTIVITIES
|
(7,607,520
|
)
|
(10,054,621
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Property, plant and equipment additions
|
(2,581,555
|
)
|
(3,119,998
|
)
|
||||
Decrease in deposits for property, plant and equipment
|
(645,448
|
)
|
(807,108
|
)
|
||||
(Increase) in restricted cash
|
-
|
(100,022
|
)
|
|||||
Payments on capital lease
|
-
|
(16,258
|
)
|
|||||
NET CASH USED IN INVESTING ACTIVITIES
|
(3,227,003
|
)
|
(4,043,386
|
)
|
2013
|
2012
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Stock issuance proceeds, net
|
74,460
|
11,699,066
|
||||||
Proceeds from short-term loans
|
-
|
75,000
|
||||||
Repayment of short-term loans
|
-
|
(105,000
|
)
|
|||||
Repayment of stockholder advances
|
-
|
(100,000
|
)
|
|||||
Proceeds from Preferred Stock – Series B subscriptions
|
-
|
3,983,192
|
||||||
Proceeds from Preferred Stock – Series B issuance
|
3,998,292
|
-
|
||||||
Proceeds from long-term notes payable
|
3,000,000
|
-
|
||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
7,072,752
|
15,552,258
|
||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(3,761,771
|
)
|
1,454,251
|
|||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
3,965,720
|
2,511,469
|
||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
203,949
|
$
|
3,965,720
|
Leasehold improvements
|
lesser of useful life or term of the lease
|
Machinery and office equipment
|
3-15 years
|
Furniture and fixtures
|
7 years
|
Office and industrial buildings
|
25 years
|
●
|
Level 1 - Quoted prices in active markets for identical assets or liabilities;
|
●
|
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities; and
|
●
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities
|
2013
|
2012
|
|||||||
Raw materials
|
$ | 392,147 | $ | 222,642 | ||||
Finished goods
|
81,499 | 74,077 | ||||||
Obsolescence reserve
|
(326,526 | ) | (56,623 | ) | ||||
Total inventories
|
$ | 147,120 | $ | 240,096 |
2013
|
Cost
|
Accumulated
Depreciation
|
Net Book
Value
|
|||||||||
Leasehold improvements
|
$
|
260,271
|
$
|
(5,251)
|
$
|
255,020
|
||||||
Machinery and office equipment
|
5,728,587
|
(1,509,954)
|
4,218,633
|
|||||||||
Furniture and fixtures
|
24,918
|
(15,619)
|
9,299
|
|||||||||
Land
|
273,118
|
-
|
273,118
|
|||||||||
Asset retirement obligation
|
27,745
|
(3,329)
|
24,416
|
|||||||||
Office and industrial buildings
|
1,418,663
|
(118,213)
|
1,300,450
|
|||||||||
Equipment under capital lease
|
108,316
|
(32,567)
|
75,749
|
|||||||||
Construction in process
|
1,027,323
|
-
|
1,027,323
|
|||||||||
$
|
8,868,941
|
$
|
(1,684,933)
|
$
|
7,184,008
|
2012
|
Cost
|
Accumulated
Depreciation
|
Net Book
Value
|
|||||||||
Leasehold improvements
|
$
|
59,271
|
$
|
(11,787
|
)
|
$
|
47,484
|
|||||
Machinery and office equipment
|
4,782,323
|
(1,187,768
|
)
|
3,594,555
|
||||||||
Furniture and fixtures
|
24,918
|
(12,306
|
)
|
12,612
|
||||||||
Land
|
273,118
|
-
|
273,118
|
|||||||||
Asset retirement obligation
|
27,745
|
(2,220
|
)
|
25,525
|
||||||||
Office and industrial buildings
|
1,126,522
|
(65,593
|
)
|
1,060,929
|
||||||||
Equipment under capital lease
|
108,317
|
(17,094
|
)
|
91,223
|
||||||||
Construction in process
|
1,780,613
|
-
|
1,780,613
|
|||||||||
$
|
8,182,827
|
$
|
(1,296,768
|
)
|
$
|
6,886,059
|
|
2013
|
2012
|
||||||
$100,000 Letter of Credit, secured by restricted cash on deposit.
|
$
|
-
|
$
|
-
|
2013
|
2012
|
|||||||
Statutory tax rate:
|
||||||||
U.S.
|
34
|
%
|
34
|
%
|
||||
Foreign
|
26.50
|
%
|
26.50
|
%
|
||||
Loss from operations before recovery of income taxes:
|
||||||||
U.S.
|
$
|
(10,819,127
|
)
|
$
|
(11,307,856
|
)
|
||
Foreign
|
(387,679
|
)
|
(1,385,915
|
)
|
||||
$
|
(11,206,806
|
)
|
$
|
(12,693,771
|
)
|
|||
Expected income tax recovery
|
$
|
(3,781,238
|
)
|
$
|
(4,211,939
|
)
|
||
Permanent differences
|
(9,418
|
)
|
(269,029
|
)
|
||||
Other
|
-
|
83,693
|
||||||
Tax rate changes and other adjustments
|
(713,238
|
)
|
356,105
|
|||||
Increase in valuation allowance
|
4,503,894
|
4,041,170
|
||||||
Income tax recovery from continuing operations
|
$
|
-
|
$
|
-
|
||||
The Company’s income tax recovery is allocated as follows:
|
||||||||
Current tax expense
|
$
|
-
|
$
|
-
|
||||
Deferred tax expense
|
-
|
-
|
||||||
$
|
-
|
$
|
-
|
Deferred Tax Assets
|
2013
|
2012
|
||||||
Non-capital losses
|
$
|
13,930,292
|
$
|
10,227,927
|
||||
Reserve – Contingency
|
173,475
|
167,949
|
||||||
Property, plant and equipment
|
112,588
|
1,158
|
||||||
Accounts receivable
|
197,247
|
19,353
|
||||||
Accrued expenses
|
514
|
13,984
|
||||||
Bad debt recovery
|
8,874
|
-
|
||||||
Fees and Payroll in Stocks and Options
|
208,736
|
-
|
||||||
Impairment Reserve
|
275,729
|
-
|
||||||
Other
|
297
|
1,381
|
||||||
14,907,752
|
10,431,752
|
|||||||
Deferred Tax Liabilities
|
||||||||
Property, plant and equipment
|
$
|
(410,693
|
)
|
$
|
(438,587
|
)
|
||
Less: Valuation allowance
|
(14,497,059
|
)
|
(9,993,165
|
)
|
||||
$
|
-
|
$
|
-
|
December 31,
2013
|
December 31,
2012
|
|||||||
Mortgage in the amount of $280,000 Canadian dollars, bears simple interest at 7% per annum, secured by the land and building, and matures on June 15, 2015. Principal and interest are due, in their entirety, at maturity.
|
$
|
280,700
|
$
|
280,700
|
||||
Equipment capital lease bears interest at 5.0% per annum, secured by the equipment and matures in April 2015, repayable in monthly installments of approximately $360.
|
5,556
|
9,485
|
||||||
Equipment capital lease, bears interest at 5.85% per annum, secured by the equipment and matures in November 2015, repayable in monthly installments of approximately $516.
|
11,201
|
17,000
|
||||||
Equipment capital lease bears interest at 3.9% per annum, secured by the equipment and matures on May 10, 2015, repayable in monthly installments of approximately $1,194.
|
18,140
|
30,599
|
||||||
Secured Promissory Notes (provided by a related party) bearing interest of 12% per annum compounded annually and payable upon maturity in 2018 and secured by a security interest in substantially all of the assets of the Company and its subsidiaries. (Note 15)
|
2,240,100
|
-
|
||||||
2,555,697
|
337,784
|
|||||||
Less: current portion
|
23,618
|
23,068
|
||||||
$
|
2,532,079
|
$
|
314,716
|
Continuity of Secured Promissory Notes
|
Year ended
December 31,
2013
|
Year ended
December 31,
2012
|
||||||
Face value of August 29, 2013 secured note payable
|
$ | 1,000,000 | $ | - | ||||
Face value of September 30, 2013 secured note payable
|
2,000,000 | - | ||||||
Total face value of promissory notes payable
|
3,000,000 | - | ||||||
Discount on August 29, 2013 secured note payable
|
(310,200 | ) | - | |||||
Discount on September 30, 2013 secured note payable
|
(600,400 | ) | - | |||||
Accretion of discount on secured notes payable
|
50,700 | - | ||||||
Interest on secured notes payable
|
100,000 | - | ||||||
Carrying value of Secured Promissory Notes
|
$ | 2,240,100 | $ | - |
Annual
Payments
|
||||
2014
|
$
|
23,618
|
||
2015
|
291,979
|
|||
2016
|
-
|
|||
2017
|
-
|
|||
2018
|
2,240,100
|
|||
Total repayments
|
$
|
2,555,697
|
Fiscal year ending December 31, 2014
|
$
|
95,900
|
||
2015
|
95,900
|
|||
2016
|
95,900
|
|||
2017
|
95,900
|
|||
2018
|
101,542
|
|||
Thereafter
|
1,303,117
|
|||
Total
|
$
|
1,788,259
|
Weighted
|
||||||||||||
Warrants
|
Warrants
|
Average
|
||||||||||
Details
|
Number
|
Amount
|
Exercise Price
|
|||||||||
OUTSTANDING, DECEMBER 31, 2012
|
1,997,500
|
2,037,450
|
$
|
2.00
|
||||||||
Issued (ii)
|
3,000,000
|
910,600
|
0.54
|
|||||||||
Expired
|
(1,854,000
|
)
|
(1,891,081
|
)
|
(2.00
|
)
|
||||||
OUTSTANDING, December 31, 2013
|
3,143,500
|
$
|
1,056,970
|
$
|
0.61
|
●
|
Volatility – 163.67%, based on the Company’s Historical Stock Price
|
●
|
Probability of Occurrence – 100%, based on the expectation and discussions the Company held with additional investors during and after the consummation of this private placement
|
●
|
Risk Free Rate – 2.70%, based on the long-term US Treasury rate
|
●
|
Volatility – 141.929%, based on the Company’s Historical Stock Price
|
●
|
Risk Free Rate – 1.36%, based on the long-term US Treasury rate
|
●
|
Volatility – 141.028%, based on the Company’s Historical Stock Price
|
●
|
Risk Free Rate – 1.36%, based on the long-term US Treasury rate
|
●
|
The market price of the Company’s common stock at January 6, 2012 ($1.42 per share);
|
●
|
Shares to be issued upon occurrence – 880,250 shares of Common Stock (based on an offering price of $0.80); and
|
●
|
Probability of occurrence – 100%, based on the expectation and discussions the Company held with additional investors during and after the consummation of this private placement.
|
●
|
The market price of the Company’s common stock at March 31, 2012 ($1.17 per share);
|
●
|
Shares to be issued upon occurrence – 880,250 shares of Common Stock (based on an offering price of $0.80); and
|
●
|
Probability of occurrence – 100%, based on the expectation and discussions the Company held with additional investors during and after the consummation of this private placement.
|
Date of Closing
|
Preferred Shares Issued
|
Closing Market Price
|
||
December 27, 2012
|
860,544
|
$0.80
|
||
December 31, 2012
|
285,900
|
$0.83
|
Year Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Expected life (in years)
|
5.0
|
5.0
|
||||||
Risk-free interest rate
|
0.10%-1.03
|
%
|
0.77%-0.78
|
%
|
||||
Expected volatility
|
154.30%-157.14
|
%
|
154.30%-157.14
|
%
|
||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
Options
Outstanding
Stock
Options
|
Weighted-
Average
Exercise
Price
|
Aggregate
Intrinsic
Value (1)
|
||||||||||
Balance as of December 31, 2012
|
5,240,000
|
$
|
1.50
|
$
|
-
|
|||||||
Granted
|
2,060,000
|
0.38
|
-
|
|||||||||
Exercised
|
-
|
-
|
||||||||||
Cancelled
|
494,000
|
0.83
|
-
|
|||||||||
Balance as of December 31, 2013
|
6,806,000
|
$
|
1.21
|
$
|
-
|
|||||||
Equity awards available for grant at December 31, 2013
|
3,194,000
|
Number of
Shares
|
Weighted-
Average
Grant-Date
Fair Value
|
|||||||
Unvested at December 31, 2011
|
-
|
$
|
-
|
|||||
Granted
|
5,240,000
|
1.5
|
||||||
Vested
|
-
|
-
|
||||||
Canceled
|
-
|
-
|
||||||
Unvested at December 31, 2012
|
-
|
$
|
-
|
(1) |
Amounts represent the difference between the exercise price and the fair value of common stock at period end for all in the money options outstanding based on the fair value per share of common stock. As of December 31, 2013, no options that had been granted were “in the money.”
|
●
|
Level 1 - Quoted prices in active markets for identical assets or liabilities
|
●
|
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities
|
●
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities
|
Balance Sheet Classification
|
|
December 31,
2013
|
December 31,
2012
|
|||||||
Short term notes receivable
|
Level 1
|
|
$
|
-
|
|
|
$
|
-
|
||
Level 2
|
|
-
|
|
|
487,722
|
|||||
Level 3
|
|
-
|
|
|
-
|
|
||||
|
$
|
|
|
$
|
487,722
|
|
2013
|
||||||||||||
Data
Business
|
Plastic2Oil
|
Total
|
||||||||||
Sales
|
$
|
93,712
|
(1)
|
$
|
599,413
|
(1)
|
$
|
693,125
|
||||
Net Income (Loss)
|
32,641
|
(11,239,447
|
) |
(11,206,806
|
)
|
|||||||
Total Assets
|
18,481
|
9,270,927
|
(3)
|
9,289,408
|
||||||||
Accounts Receivable-Net
|
18,481
|
62,333
|
80,814
|
|||||||||
Inventories
|
-
|
147,120
|
147,120
|
2012
|
||||||||||||
Data
Business
|
Plastic2Oil
|
Total
|
||||||||||
Sales
|
$
|
70,381
|
(1)
|
$
|
609,553
|
(1)
|
$
|
679,934
|
||||
Net Loss
|
18,284
|
(12,712,055
|
)
|
(12,693,771
|
)
|
|||||||
Total Assets
|
70,381
|
(2) (3)
|
13,293,020
|
(3)
|
13,363,401
|
|||||||
Accounts Receivable - Net
|
70,381
|
169,758
|
240,139
|
|||||||||
Inventories
|
-
|
240,096
|
240,096
|
(1)
|
All sales from the Data Business were recorded in the United States for the year ended December 31, 2013. For the year ended December 31, 2013 P2O sales in the United States and Canada were $143,307 and $455,996, respectively. For the year ended December 31, 2012, P2O sales in the United States and Canada were $119,266 and $490,287, respectively.
|
(2)
|
As of March 31, 2012, due to the conclusion that the Company could not substantiate when a significant amount of revenues would be earned from the Data Business, all property, plant and equipment assets related to the Data Business were determined to be impaired and an impairment expense of $36,500 was recorded to write the assets down to $Nil. All other amounts included in the measure of segment profit or loss related to the Data business are not material. Other than as noted above, the amounts shown for Operating Expenses and Other Income (Expense) items on the consolidated statements of operations related to the P2O segment.
|
(3)
|
All Data Business Assets are located in the United States. P2O assets include the Company headquarters and various machinery and equipment used at the aforementioned sites and at the Niagara Falls Facility. As at December 31, 2013, total long-lived assets of $6,515,577 and $668,432 were located in the United States and Canada, respectively. As at December 31, 2012, total long-lived assets of $5,956,508 and $929,551, were located in the United States and Canada, respectively. The mortgage payable of $280,000 and the equipment capital lease maturing on May 10, 2015, both disclosed in Note 9, relate to assets held in Canada.
|
Fiscal Year
Ended
December 31,
2013
|
Fiscal Year
Ended
December 31,
2012
|
|||||||
Common shares issued in exchange for services
|
165,127
|
1,471,745
|
||||||
Stock-based compensation
|
1,891,080
|
1,481,666
|
||||||
Common shares issued for repayments of loans
|
-
|
200,000
|
||||||
Common shares subscribed for services rendered
|
145,415
|
60,818
|
||||||
Purchases of property, plant and equipment in accounts payable at year-end
|
-
|
413,122
|
||||||
Common shares subscribed in exchange for property, plant and equipment
|
-
|
35,120
|
||||||
Cash paid for interest
|
- |
22,819
|
●
|
The inventory processed over the prior months at Regional Recycling of Niagara was comingled with contaminated materials that made the significant majority of their inventory worthless without significant additional processing and labor (Note 4);
|
●
|
The fixed assets utilized at the facility were old and beginning to become in need of significant repairs, which would have been a significant cost to maintain (Note 5);
|
●
|
The pre-processing cost of plastic at Regional Recycling of Niagara was significant and was a hindrance to the Company becoming profitable on a cost per gallon of fuel basis; and
|
●
|
The Company leases the JBI Recycling Facility in Thorold, Ontario, Canada with terms remaining of up to 17 years (Note 10).
|
Year Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Revenue
|
$
|
96,615
|
$
|
305,455
|
||||
Cost of sales
|
52,377
|
112,480
|
||||||
Gross profit
|
44,238
|
192,976
|
||||||
Operating expenses
|
1,524,748
|
704,738
|
||||||
Other expense
|
5,382
|
10,102
|
||||||
Loss before income taxes
|
(1,530,130
|
)
|
(521,864
|
)
|
||||
Future income tax recovery
|
-
|
-
|
||||||
Loss from discontinued operations, net of tax
|
$
|
(1,530,130
|
)
|
$
|
(521,864
|
)
|
2013
|
2012
|
|||||||
Sales
|
$
|
-
|
$
|
-
|
||||
Cost of sales
|
-
|
-
|
||||||
Gross profit
|
-
|
-
|
||||||
Operating expenses
|
500,000
|
-
|
||||||
Impairment loss
|
-
|
-
|
||||||
Other income
|
(10,433)
|
-
|
||||||
Loss before income taxes
|
-
|
-
|
||||||
Future income tax recovery
|
-
|
-
|
||||||
Loss from discontinued operations, net of tax
|
$
|
(489,567
|
) |
$
|
-
|
2013
|
2012
|
|||||||
Sales
|
$
|
-
|
$
|
948,224
|
||||
Cost of sales
|
-
|
780,848
|
||||||
Gross profit
|
-
|
167,376
|
||||||
Operating expenses
|
7,762
|
321,977
|
||||||
Impairment loss
|
-
|
-
|
||||||
Other income
|
-
|
48,031
|
||||||
Loss before income taxes
|
-
|
(106,570
|
)
|
|||||
Future income tax recovery
|
-
|
-
|
||||||
Loss from discontinued operations, net of tax
|
$
|
(7,762)
|
$
|
(106,570
|
)
|
December 31,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Loss per share from Continuing Operations
|
$
|
(0.12
|
)
|
$
|
(0.15
|
)
|
||
Loss per share from Discontinued Operations
|
(0.02
|
)
|
(0.01
|
)
|
||||
Total Loss per Share
|
$
|
(0.14
|
)
|
$
|
(0.16
|
)
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
CONTROLS AND PROCEDURES
|
OTHER INFORMATION
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
|
Position
|
||
Richard Heddle
|
47
|
President, CEO and Director
|
||
Rahoul S Banerjea
|
63
|
Chief Financial Officer
|
·
|
Form 4’s filed on January 8, 2013 by a member of the investor group referenced in the Schedule 13D originally filed with the Securities and Exchange Commission on May 25, 2012 (the “May 2012 Investor Group”), were not timely filed on the following dates: January 8, 2013, January 28, 2013, February 14, 2013, February 28, 2013, April 15, 2013 and July18, 2013.
|
·
|
Form 4 filed by John Wesson on February 13, 2013 was not timely filed;
|
·
|
Form 4 filed by Richard Heddle on August 26, 2013 was not timely filed;
|
·
|
Form 4 filed by Richard Heddle on October 4, 2013 was not timely filed;
|
·
|
Form 3 filed by Philip Bradley on October 10, 2013 was not timely filed; and
|
·
|
Form 4 filed by John Bordynuik on June 2, 2014 was not timely filed reporting the cancellation of options to purchase 650,000 shares of common stock.
|
EXECUTIVE COMPENSATION
|
SUMMARY COMPENSATION TABLE
|
||||||||||||||||||||||||||||||||||
Name
and
Principal
Position
|
Year Ended
December 31,
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
(1)
|
Option
Awards
($)
(2)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
Richard Heddle
President & Chief Executive Officer, Director
|
2013
|
- |
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Kevin Rauber
President & Chief Executive Officer, Director
|
2013
|
191,280
|
(3)
|
-
|
-
|
-
|
-
|
-
|
-
|
191,280
|
||||||||||||||||||||||||
2012
|
139,421
|
(4)
|
-
|
-
|
68,513
|
-
|
-
|
-
|
207,934
|
|||||||||||||||||||||||||
Tony Bogolin
Former Chief Executive Officer, Director
|
2013
|
298,193
|
(5)
|
-
|
-
|
-
|
-
|
-
|
-
|
298,193
|
||||||||||||||||||||||||
2012
|
100,000
|
(6)
|
-
|
-
|
39,748
|
-
|
-
|
-
|
139,748
|
|||||||||||||||||||||||||
Matthew Ingham
Former Chief Financial Officer, Director
|
2013
|
177,378
|
(7)
|
-
|
-
|
-
|
-
|
-
|
-
|
177,378
|
||||||||||||||||||||||||
2012
|
141,153
|
(8)
|
-
|
50,000
|
68,513
|
-
|
-
|
-
|
259,666
|
|||||||||||||||||||||||||
Nicholas Terranova
Former Chief Financial Officer
|
2013
|
79,294
|
-
|
-
|
16,344
|
-
|
-
|
-
|
95,638
|
|||||||||||||||||||||||||
John Bordynuik
Chief of Technology
|
2013
|
258,305
|
(9)
|
-
|
-
|
-
|
-
|
-
|
-
|
258,305
|
||||||||||||||||||||||||
2012
|
261,052
|
(10)
|
78,350
|
-
|
1,270,171
|
-
|
-
|
-
|
1,609,573
|
(1)
|
The amounts reported in this column reflect the fair value on the grant date of the restricted stock awards granted to our named executive officers. These values are determined by multiplying the number of shares granted by the closing price of our common stock on the trading day of the grant date. The dollar amounts do not necessarily reflect the dollar amounts of compensation actually realized or that may be realized by our named executive officers.
|
(2)
|
The amounts reported in this column reflect the fair value on the grant date of the option awards granted to our named executive officers. These values are determined under the principles used to calculate the grant date fair value of equity awards for purposes of our financial statements. The dollar amounts do not necessarily reflect the dollar amounts of compensation actually realized or that may be realized by our named executive officers.
|
(3)
|
Represents Mr. Rauber’s salary from January 1, 2013 through May 2, 2013, the date Mr. Rauber resigned as our Chief Executive Officer.
|
(4)
|
Represents Mr. Rauber’s salary from May 15, 2012, the date Mr. Rauber became our Chief Executive Officer, through the end of the fiscal year.
|
(5)
|
Represents Mr. Bogolin’s salary from January 1, 2013 through August 14, 2013, the date Mr. Bogolin resigned as our Chef Executive Officer.
|
(6)
|
Represents Mr. Bogolin’s salary from June 25, 2012, the date Mr. Bogolin became our Chief Operating Officer, through the end of the fiscal year.
|
(7)
|
Represents Mr. Ingham’s salary from January 1, 2013 through August 14, 2013, the date Mr. Ingham resigned as our Chef Financial Officer.
|
(8)
|
Represents Mr. Ingham’s salary from January 9, 2012, the date Mr. Ingham became our Chief Financial Officer, through the end of the fiscal year.
|
(9)
|
Represents Mr. Bordynuik’s compensation as our Chief of Technology.
|
(10)
|
Represents Mr. Bordynuik’s compensation of $102,212 in salary and $78,350 in bonus from January 1, 2012 through May 15, 2012, the date of his resignation as our Chief Executive Officer, as well as compensation of $158,840 in salary and $1,270,171 in stock compensation, from May 16, 2012 through December 31, 2012, when Mr. Bordynuik served as the Company’s Chief of Technology. Mr. Bordynuik also served as our interim Chief Financial Officer from April 9, 2011 through January 9, 2012, the date Mr. Ingham became our Chief Financial Officer.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
|
|||||||||||||||||||||||||||||||||
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||
Equity
|
|||||||||||||||||||||||||||||||||
Equity
|
Incentive
|
||||||||||||||||||||||||||||||||
Incentive
|
Plan
|
||||||||||||||||||||||||||||||||
Plan
|
Awards:
|
||||||||||||||||||||||||||||||||
Awards:
|
Market or
|
||||||||||||||||||||||||||||||||
Equity
|
Number
|
Payout
|
|||||||||||||||||||||||||||||||
Incentive
|
Number
|
Market
|
of
|
Value of
|
|||||||||||||||||||||||||||||
Plan
|
of
|
Value of
|
Unearned
|
Unearned
|
|||||||||||||||||||||||||||||
Awards:
|
Shares
|
Shares
|
Shares,
|
Shares,
|
|||||||||||||||||||||||||||||
Number of
|
Number of
|
Number of
|
or Units
|
or Units
|
Units or
|
Units or
|
|||||||||||||||||||||||||||
Securities
|
Securities
|
Securities
|
of Stock
|
of Stock
|
Other
|
Other
|
|||||||||||||||||||||||||||
Underlying
|
Underlying
|
Underlying
|
That
|
That
|
Rights
|
Rights
|
|||||||||||||||||||||||||||
Unexercised
|
Unexercised
|
Unexercised
|
Option
|
Have
|
Have
|
That
|
That
|
||||||||||||||||||||||||||
Options
|
Options
|
Unearned
|
Exercise
|
Option
|
Not
|
Not
|
Have Not
|
Have Not
|
|||||||||||||||||||||||||
(#)
|
(#)
|
Options
|
Price
|
Expiration
|
Vested
|
Vested
|
Vested
|
Vested
|
|||||||||||||||||||||||||
Name
|
Exercisable
|
Unexercisable
|
(#)
|
($)
|
Date
|
(#)
|
($)
|
(#)
|
($)
|
||||||||||||||||||||||||
Richard Heddle
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Kevin Rauber
|
300,000
|
(1) |
-
|
-
|
1.5
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Nicholas Terranova
|
60,000
|
-
|
-
|
0.32
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||
Matthew Ingham
|
300,000
|
(3) |
-
|
-
|
1.5
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
Tony Bogolin
|
400,000
|
(4) |
-
|
-
|
1.5
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
John Bordynuik
|
1,400,000
|
(5) |
1,950,000
|
(6) |
-
|
1.50
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Represents options to purchase common stock granted to Mr. Rauber on May 15, 2012.
|
(2)
|
Represents options to purchase common stock granted to Mr. Terranova on July 11, 2013.
|
|
|
(3)
|
Represents options to purchase common stock granted to Mr. Ingham on May 15, 2012.
|
(4)
|
Represents options to purchase common stock granted to Mr. Bogolin on June 25, 2012.
|
(5)
|
Represents options to purchase common stock granted to Mr. Bordynuik on May 15, 2012, which options vested on May 15, 2012.
|
(6)
|
Represents options to purchase common stock granted to Mr. Bordynuik on May 15, 2012, which options vest in equal installments on May 15, 2015, May 15, 2016 and May 15, 2017.
|
Name
|
Year
|
Fees
Earned or
Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Change in
Pension Value
and Nonqualified Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
||||||||||||||||||||||
Richard Heddle
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Philip Bradley
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Kevin Rauber
(1)
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Tony Bogolin
(1)
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
Matthew Ingham
(1)
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||
John M Wesson
(1)
|
2013
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Resigned as a director prior to the end of the fiscal year ended December 31, 2013.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
·
|
96,292,243 shares of Common Stock; and
|
·
|
1,967,207 shares of our Series B Convertible Preferred Stock, par value $0.001 per share (“Series B Preferred Stock”).
|
·
|
each person known by us to be a beneficial owner of more than 5% of our outstanding Common Stock;
|
·
|
each of our directors;
|
·
|
each of our named executive officers; and
|
·
|
all directors and executive officers as a group.
|
* Less than 1.0%.
|
(1)
|
Includes warrants to purchase 3,000,000 shares of Common Stock.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Service Provided
|
Fiscal 2013
|
Fiscal 2012
|
||||||
Audit Fees
|
||||||||
Annual Audit
|
$
|
285,523
|
(1)
|
$
|
455,519
|
(2)
|
||
Audit Related Fees
|
||||||||
Assurances and Related Sources
|
17,6440
|
(3)
|
||||||
Tax Fees
|
||||||||
Tax Services
|
14,060
|
(4)
|
||||||
All Other Fees
|
||||||||
Fees for other services
|
-
|
|||||||
Total Fees
|
285,523
|
487,223
|
(1)
|
Includes the review of 2013 Quarterly Reports on Form 10-Q by MNP LLP and 2013 audit fees.
|
(2)
|
Includes the review of 2012 Quarterly Reports on Form 10-Q by MNP, LLP and 2012 audit fees.
|
(3)
|
Includes fees for the review and procedures performed on the Company’s filing of a Registration Statement on Form S-8 in conjunction with the 2012 Long Term Incentive Compensation Plan.
|
(4)
|
Fees related to the preparation of an amendment of tax returns for 2009, 2010 and 2011 tax years.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
JBI, INC.
|
||
Date: June 3, 2014
|
By:
|
/s/ Richard Heddle
|
Name: Richard Heddle
|
||
Title: President and Chief Executive Officer
(Principal Executive Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Richard Heddle
|
President ,Chief Executive Officer
|
June 3, 2014
|
||
Richard Heddle
|
(Principal Executive Officer) and Chairman of the Board of Directors
|
|||
/s/ Rahoul S. Banerjea
|
Chief Financial Officer
|
June 3, 2014
|
||
Rahoul S. Banerjea
|
(Principal Financial Officer and Principal Accounting Officer)
|
Exhibit No.
|
Description
|
|
2.1
|
Asset Purchase Agreement, dated February 10, 2012, by and between JBI, Inc. and Big 3 Packaging LLC (Incorporated herein by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on February 16, 2012).
|
|
3.1
|
Articles of Incorporation of JBI, Inc. (Incorporated by reference to Exhibit 3(a) to our Registration Statement on Form SB-2 filed on December 11, 2006).
|
|
3.2
|
Certificate of Amendment to Articles of Incorporation of JBI, Inc. dated January 10, 2007 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on August 9, 2012).
|
|
3.2
|
Certificate of Amendment to Articles of Incorporation of JBI, Inc. dated October 5, 2009 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on October 6, 2009).
|
|
3.4
|
Certificate of Amendment to Articles of Incorporation of JBI, Inc. dated December 11, 2009 (Incorporated herein by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed on August 9, 2012).
|
|
3.5
|
Certificate of Amendment to Articles of Incorporation of JBI, Inc. dated May 11, 2012 (Incorporated herein by reference to Exhibit 3.5 to our Quarterly Report on Form 10-Q filed on August 9, 2012).
|
|
3.6
|
Amended and Restated Bylaws of JBI, Inc. (Incorporated herein by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on December 31, 2012).
|
|
3.7
|
Certificate of Designation of Series A Super Voting Preferred Stock of JBI, Inc. dated December 1, 2009 (Incorporated herein by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed on August 9, 2012).
|
|
3.8
|
Amendment to Certificate of Designation of Series A Super Voting Preferred Stock of JBI, Inc. dated May 10, 2012 (Incorporated herein by reference to Exhibit 3.4 to our Quarterly Report on 10-Q filed on August 9, 2012).
|
|
3.9
|
Certificate of Correction to Certificate of Designation of Series A Super Preferred Voting Stock of JBI, Inc. dated May 14, 2012 (Incorporated herein by reference to Exhibit 3.6 to our Quarterly Report on Form 10-Q filed on August 9, 2012).
|
Exhibit No.
|
Description
|
|
3.10
|
Certificate of Designation of Series B Convertible Preferred Stock of JBI, Inc. dated December 24, 2012 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on December 31, 2012).
|
|
3.11
|
Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock of JBI, Inc. dated January 11, 2013 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 17, 2013).
|
|
3.12
|
Certificate of Withdrawal of Certificate of Designation of Series A Preferred Super Voting Stock of JBI, Inc. dated June 2, 2014. (1)
|
|
10.1
|
Master Revenue Sharing Agreement between JBI, Inc. and RockTenn Company dated July 29, 2011 (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 4, 2011) .*
|
|
10.2
|
Supply and Service Agreement between JBI, Inc. and Coco Asphalt Engineering a division of Coco Paving, Inc. dated June 10, 2011 (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on June 13, 2011).
|
|
10.3
|
Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 6, 2012).
|
|
10.4
|
Promissory Note, dated February 14, 2012, by Big 3 Packaging LLC in favor of JBI, Inc. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 16, 2012).
|
|
10.5
|
Lease, dated December 1, 2011, between JBI, Inc . and Avondale Stores Limited. (Incorporated herein by reference to Exhibit 10.5 to our Annual Report on Form 10-K, filed on March 19, 2012)
|
|
10.6
|
Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on January 6, 2012).
|
|
10.7
|
Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 17, 2012).
|
|
10.8
|
Employment Agreement, dated May 15, 2012, by and between JBI, Inc. and John Bordynuik (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 17, 2012).
|
|
10.9
|
2012 Long-Term Incentive Plan of JBI, Inc. dated as of May 23, 2012 (Incorporated herein by reference to Appendix A of our Definitive Proxy Statement on Schedule 14A filed on June 20, 2012).
|
Exhibit No.
|
Description
|
|
10.10
|
Form of Incentive Stock Option Agreement pursuant to the 2012 Long-Term Incentive Plan of JBI, Inc. (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2012)
|
|
10.11
|
Amended and Restated Employment Agreement, dated October 18, 2012, by and between the Company and Kevin Rauber (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 19, 2012).
|
|
10.12
|
Amended and Restated Employment Agreement, dated October 18, 2012, by and between the Company and Matthew Ingham (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 19, 2012).
|
|
10.13
|
Amended and Restated Employment Agreement, dated October 18, 2012, by and between the Company and Tony Bogolin (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on October 19, 2012).
|
|
10.14
|
Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 31, 2012).
|
|
10.15
|
Separation Agreement, effective as of May 1, 2013, between the Company and Kevin Rauber (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 3, 2013). | |
10.16
|
Amendment to Employment Agreement, dated as of May 16, 2013, between the Company and Tony Bogolin (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 17, 2013).
|
|
10.17
|
Stipulation Agreement, dated August 8, 2013, between the Company, and certain settling parties signatory thereto (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 9, 2013).
|
|
10.18
|
Separation Agreement, dated August 14, 2013, between the Company and Tony Bogolin (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 15, 2013).
|
|
10.19
|
Separation Agreement, dated August 14, 2013, between the Company and Matthew Ingham (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 15, 2013).
|
|
10.20
|
Subscription Agreement, dated August 29, 2013, between the Company and Richard Heddle (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 30, 2013).
|
Exhibit No.
|
Description
|
|
10.21
|
Secured Promissory Note, dated August 29, 2013, issued by the Company in favor of Richard Heddle (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 30, 2013).
|
|
10.22
|
Warrant, dated August 29, 2013, issued by the Company in favor of Richard Heddle (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 30, 2013).
|
|
10.23
|
Security Agreement, dated August 29, 2013, between the Company, Plastic2Oil of NY #1, LLC, JBI RE #1, Inc., Christiana Trust and Richard Heddle (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on August 30, 2013).
|
|
10.24
|
Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 24, 2014).
|
|
10.25
|
Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 24, 2014).
|
|
10.26
|
Joint Venture and Services Agreement between JBI, Inc. and RWH Marine Consulting dated February 12, 2010. (1)
|
|
21.1
|
Subsidiaries of the Registrant. (1)
|
|
JBI RE ONE Inc., an Ontario, Canada corporation.
|
||
Plastic2Oil Land, Inc., a Nevada corporation.
|
||
Plastic2Oil Marine, Inc. a Nevada corporation.
|
||
PAK-IT, LLC a Florida corporation.
|
||
Javaco, Inc., an Ohio corporation.
|
||
Plastic2Oil of NY #1, LLC a New York corporation.
|
||
JBI RE #1, Inc., a New York corporation.
|
||
23.1
|
Consent of MNP LLP (1)
|
|
23.2
|
Consent of MSCM LLP (1)
|
|
31.1
|
Certification of our Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. (1)
|
Exhibit No.
|
Description
|
|
31.2
|
Certification of our Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. (1)
|
|
32.1
|
Certification of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
|
|
32.2
|
Certification of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
|
|
101.INS
|
XBRL Instance Document (2)
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (2)
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document. (2)
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document. (2)
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document. (2)
|
|
101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document. (2)
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*
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Certain Confidential Information contained in this Exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk. This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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(1)
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Filed herewith.
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(2)
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Furnished herewith.
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JBI, Inc.
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Request:
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Filing Withdrawal/Cancellation
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Jurisdiction:
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Nevada - Secretary of State
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Thru Date:
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06/03/2014
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Results:
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See Attached
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ROSS MILLER
Secretary of State
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OFFICE OF THE
SECRETARY OF STATE
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SCOTT W. ANDERSON
Deputy Secretary
for Commercial Recordings
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Description
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Number of Pages
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20140406901-17
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Withdrawal of Designation
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1 Pages/1 Copies
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Respectfully,
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/s/ Ross Miller
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ROSS MILLER
Secretary of State
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ROSS MILLER
Secretary of State
204 North Carson Street, Suite 1
Carson City, Nevada 89701-4520
(775) 684-5708
Website:
www.nvsos.gov
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USE BLACK INK ONLY - DO NOT HIGHLIGHT
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ABOVE SPACE IS FOR OFFICE USE ONLY
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X
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/s/ Richard Heddle, CEO |
This form must be accompanied by appropriate fees.
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Revised: 3-12-09
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1.
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I have reviewed this Annual Report on Form 10-K of JBI, Inc.:
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this Annual Report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: June 3, 2014
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By:
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/s/ Richard Heddle
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Richard Heddle
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of JBI, Inc.:
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this Annual Report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: June 3, 2014
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By:
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/s/ Rahoul S. Banerjea
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Rahoul S. Banerjea
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Chief Financial Officer
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1.
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Such Annual Report on Form 10-K for the year ended December 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in such Annual Report on Form 10-K for the Year ended December 31, 2013, fairly presents, in all material respects, the financial condition and results of operations of JBI Inc.
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Date: June 3, 2014
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By:
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/s/ Rick Heddle
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Rick Heddle
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President and Chief Executive Officer
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1.
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Such Annual Report on Form 10-K for the year ended December 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in such Annual Report on Form 10-K for the Year ended December 31, 2013, fairly presents, in all material respects, the financial condition and results of operations of JBI Inc.
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Date: June 3, 2014
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By:
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/s/ Rahoul S. Banerjea
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Rahoul S. Banerjea
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Chief Financial Officer
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