UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 20-F





ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE ACT OF 1934





For the fiscal year ended:December 31, 2012


Commission File Number:000-51180





Global Green Matrix Corp.


(Formerly Poly-Pacific International Inc.)


(Exact Name of the Registrant as Specified in its Charter)





Alberta, Canada


(Jurisdiction of Incorporation or Organization)


943 Canso Drive


Gabriola, British Columbia, Canada V0R 1X2


(Address of Principal Executive Offices)





Randy Hayward, President and CEO, Tel: 250-247-8689; Fax: 250-247-2053


943 Canso Drive, Gabriola, British Columbia, Canada V0R 1X2


(Company Contact Person)





Securities registered or to be registered pursuant to Section 12(b) of the Act:NONE


Securities registered or to be registered pursuant to Section 12(g) of the Act:





Common shares, no par value


(Title of Class)


Preferred shares, no par value


(Title of Class)





Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:NONE





The number of outstanding shares of each of the issuer's classes of capital or common shares as of the close of the period covered by the annual report: 80,966,462 Common Shares and 0 (zero) Preferred Shares





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


Yes:oNo:þ





If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes:oNo:þ





Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes:oNo:þ





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes:þNo:o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):





Large accelerated fileroAccelerated fileroNon-accelerated filerþ





1





Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:





U.S. GAAPoInternational Financial Reporting Standards as issuedOthero


by the International Accounting Standards Boardþ





If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.Item 17oItem 18o





If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesoNoþ





(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)





Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YesoNoo





2





TABLE OF CONTENTS








PART IITEM 1. Identity of Directors, Senior Management and Advisors
5ITEM 2. Offer Statistics and Expected Timetable
5ITEM 3. Key Information
5ITEM 4. Information on the Company
8ITEM 5. Operating and Financial Review and Prospects
10ITEM 6. Directors, Senior Management and Employees
15ITEM 7. Major Shareholders and Related Party Transactions
17ITEM 8. Financial Information
18ITEM 9. The Offer and Listing
18ITEM 10. Additional Information
19ITEM 11. Quantitative and Qualitative Disclosures about Market Risk
23ITEM 12. Description of Securities other than Equity Securities
23PART IIITEM 13. Defaults, Dividend Arrearages and Delinquencies
23ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
23ITEM 15. Controls and Procedures
23ITEM 16. [Reserved]
24ITEM 16A. Audit Committee Financial Expert
24ITEM 16B. Code of Ethics
24ITEM 16C. Principal Accountant Fees and Services
24ITEM 16D. Exemptions from the Listings Standard for Audit Committees
24ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
25ITEM 16F. Change in Registrants Certifying Accountant
25ITEM 16G. Corporate Governance
25PART IIIITEM 17. Financial Statements
26ITEM 18. Financial Statements
26ITEM 19. Exhibits
52SIGNATURES
53





3




GENERAL





Unless the context clearly requires otherwise, the terms “we”, “us”, “our”, the “Registrant’, the “Corporation”, and the “Company” as used in this report means Global Green Matrix Corp.





The Registrant uses the Canadian dollar as its reporting currency. In this document, unless otherwise specified, all dollar amounts are expressed in Canadian dollars.





FORWARD LOOKING STATEMENTS





Except for the statements of historical fact contained herein, some information presented in this annual report constitutes forward-looking statements. When used in this annual report, such words as “estimate”, “project”, “believe”, “anticipate”, “intend”, “expect”, “predict”, “may”, “should”, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, without limitation, changes in project parameters as plans continue to be refined, as well as those factors discussed in the section entitled “Risk Factors”. There may be other factors that cause actual results not to be as anticipated, estimated or intended, such as (i) general economic conditions, (ii) performance of financial markets, (iii) interest rate levels, (iv) currency exchange rates, (v) changes in laws and regulations, and (vi) competitive factors. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.





4





PART I








ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS





Not required.





ITEM 2. OFFER STATISTICS AND EXPECTED TIME TABLE





Not applicable.





ITEM 3. KEY INFORMATION





A. Selected Financial Data





The selected financial data presented below is derived from our financial statements for the fiscal years ended December 31, 2012, 2011and 2010 which were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and examined by our independent auditors. The information set forth below should be read in conjunction with our audited annual financial statements and related notes thereto included in this annual report, and with the information appearing under the heading “Item 5 – Operating and Financial Review and Prospects”. All amounts are shown in Canadian dollars, unless otherwise specified.





Years Ended December 312012


2011


2010Total Revenues

$
518,733


$
-


$
-Total Expenses

$
1,718,507


$
541,446


$
422,240Other Items

$
528,267


$
11,409


$
200,104Net Income (Loss) available to Common Shareholders

$
(1,728,041
)

$
(552,855
)

$
(622,344
)Net Income (Loss) per share

$
(0.03
)

$
(0.02
)

$
(0.05
)Diluted Net Income (Loss) per share

$
(0.03
)

$
(0.02
)

$
(0.05
)Dividends Declared per share


-


$
-


$
-Total Assets

$
3,240,866


$
1,118,873


$
35,861Total Liabilities

$
(1,383,556
)

$
(286,997
)

$
(313,447
)Net Assets

$
1,857,310


$
831,876


$
(277,586
)Additional Paid in Capital

$
4,146,934


$
4,075,087


$
4,075,087Accumulated Comprehensive Income

$
53,195


$
53,195


$
53,195Common Shares Capital

$
10,659,919


$
7,501,691


$
6,325,974Shares To Be Issued

$
10,000


$
486,600


$
-Accumulated Deficit

$
(13,012,738
)

$
(11,284,697
)

$
(10,731,842
)Total Shareholders Equity (Deficit)

$
1,857,310


$
831,876


$
(277,586
)Common Shares outstanding (1)


80,966,462



45,382,697



21,243,055Weighted Average – Diluted Shares


68,038,758



23,574,760



13,058,736Share Purchase Warrants (2)


40,388,663



15,398,333



15,398,333




1)
84,366,462 at April 30, 2013


2)
59,488,663 at April 30, 2013





5





The selected financial data presented below is derived from our financial statements for the fiscal years ended December 31, 2009 and 2008 which were prepared in accordance with U.S. GAAP and examined by our independent auditors.  This information is not comparable to the selected financial data presented above for years 2012, 2011 and 2010 which is derived from our financial statements for those fiscal years prepared in accordance with IFRS. All amounts are shown in Canadian dollars, unless otherwise specified.





Years Ended December 312009



2008Total Revenues

$
-


$
-Total Operating Expenses

$
930,892


$
2,171,689Income tax expense (recovery)

$
-


$
-Net Income (Loss) available to Common Shareholders

$
(930,892
)

$
(2,171,689
)Net Income (Loss) per share

$
(0.17
)

$
(0.51
)Diluted Net Income (Loss) per share

$
(0.17
)

$
(0.51
)Dividends Declared per share

$
-


$
-Total Assets

$
28,602


$
173,822Total Liabilities

$
607,744


$
196,557Net Assets

$
(579,142
)

$
(22,735
)Additional Paid in Capital

$
3,621,500


$
3,424,280Accumulated Comprehensive Income

$
53,195


$
53,195Common Shares Capital

$
5,855,661


$
5,678,396Shares To Be Issued

$
-


$
-Accumulated Deficit

$
(10,109,498
)

$
(9,178,606
)Total Shareholders Equity (Deficit)

$
(579,142
)

$
(22,735
)Common Shares outstanding


5,844,722



5,107,329Weighted Average – Diluted Shares


5,607,680



4,232,869Share Purchase Warrants


1,566,829



2,121,837




EXCHANGE RATES





The following tables set out exchange rates between the Canadian dollar and the U.S. dollar for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this annual report or will use in the preparation of periodic reports or any other information to be provided to you. The exchange rates were obtained from the US Federal Reserve System website www.federalreserve.gov and are the noon buying rates in New York for cable transfers payable in Canadian dollars.





As of May 3, 2013, the rate for the conversion of Canadian dollars to U.S. dollars was C$1.0077 to U.S. $1.00.





The following tables set forth the rates of exchange in Canadian dollars per U.S. $1.00:





Previous Six Months

Apr/13


Mar/13


Feb/13


Jan/13


Dec/12


Nov/12High Rate


1.0270



1.0314



1.0286



1.0078



0.9958



1.0029Low Rate


1.0107



1.0155



0.9959



0.9839



0.9841



0.9927





Years Ended December 31

2012


2011


2010


2009


2008Average rate during the period


0.9995



0.9858



1.0353



1.1373



1.0713




6


B. Capitalization and Indebtedness





Not applicable.





C. Reasons for the Offer and Use of Proceeds





Not applicable.





D. Risk Factors





The following is a brief discussion of those distinctive or special characteristics of the Company's operations and industry which may have a material impact on the Company's business development, or constitute risk factors in respect of the Company's financial performance.





We lack an extensive operating history on which to base an evaluation of our performance.





Our business performance is difficult to evaluate because we have a limited operating history with our current range of operations. Our distributor/dealer license agreement with Inergy Plus Technologies Inc. was signed in December 2011, as was our distribution agreement with I-DES Inc. Our acquisition of Intercept Rentals was completed in March, 2012. In considering whether to invest in our common stock, you should consider that we starting earning revenues in 2012 and there is only limited historical financial and operating information available on which to base your evaluation of our expected performance.





Liquidity risk.





We have losses which may continue into the future. We have a history of operating losses since inception totaling $13,012,738 to December 31, 2012. There can be no assurances we will be profitable in the future. There is no assurance that actual cash requirements will not exceed our expectations.





We have been dependent on sales of our equity securities and on debt financing to meet our cash requirements. While we will require additional funding, we may not be able to obtain financing on favorable terms and a decline in the price of our common stock could affect our ability raise an adequate level of working capital.





There are a large number of shares underlying our warrants that may be available for future sale and the sale of these shares may depress the market price of our common stock.





As of April 30, 2013, we had 84,366,462 shares of common stock issued and outstanding, and share purchase warrants convertible into a further 59,488,663 shares of common stock. The future sale of shares that may be issued on the exercise of our stock purchase warrants could impact negatively on the market price of our common stock.





Future issuances of shares may adversely impact the value of our stock.





We may attempt to raise additional capital through the sale of common stock or convertible debt. Future issuances of common stock or convertible debt may dilute or potentially dilute your position in us.





We are authorized to issue unlimited preferred shares which, if issued, may reduce the price of our common shares.





Although no preferred shares are currently issued and outstanding, our directors are authorized by our Articles of Incorporation, as amended, to issue unlimited preferred shares in series without the consent of our shareholders. Our preferred shares, if and when issued, may rank senior to common shares with respect to payment of dividends and amounts received by shareholders upon liquidation, dissolution or winding up. The issuance of preferred shares in series and the preferences given the preferred shares must be made by a Resolution of Directors, but do not need the approval of our shareholders. The existence of rights, which are senior to common shares, may reduce the price of our common shares.





Because our common shares are a penny stock, trading in the common shares involves increased risks concerning price fluctuation, additional disclosure requirements and a lack of a liquid market.





Our shares will be "penny stocks" as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00.  Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.





Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt.




7





Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market.  These additional sales practice and disclosure requirements could impede the sale of our securities.  This lower trading volume can cause price fluctuations.  In addition, the liquidity for our securities will be decreased, with a corresponding decrease in the price of our securities.  Accordingly, our shareholders will, in all likelihood, find it difficult more to sell their securities.








ITEM 4. INFORMATION ON THE COMPANY





A. History and Development of the Company





Global Green Matrix Corp. (formerly Poly-Pacific International Inc.) was incorporated under the Alberta Business Corporations Act on October 25, 1995.  The Company is pursuing business in eco-friendly solutions to industrial waste by-products.  The significance and importance of recycling and reclaiming industrial waste has become an important global issue. The Company is focused on benefiting our planet by exploring and pursuing environmentally sound methods and technologies in waste management and the energy sector, while creating significant value for our shareholders.





With projects ranging from the conversion of municipal solid waste for energy production, recovering and recycling oilfield wastes, reclamation of contaminated soils and waste water and more, Global Green Matrix Corp. hopes to position itself at the cutting edge of environmentally responsible waste remediation and development and to become a leading company in the reclamation sector.





Prior to 2008, the Company had been pursuing the reclamation of industrial polymers. The Company’s wholly owned subsidiary, Poly-Pacific Technologies Ltd. (“PPT”) was a manufacturer of plastic media blast and plastic lumber.  PPT produced plastic media blast from scrap plastic, designed for the rapid removal of paints and coatings from sensitive surfaces including those on aircraft, automobiles, composites, and electronic components.  Plastic media blast was a proven, environmentally friendly alternative to harsh chemical stripping agents and other hard abrasive materials. In November, 2007, due to continuing losses as a result of decreasing market share and lack of demand for plastic media, the Company announced the closure of PPT and its operations in Ontario, California.





The Company previously had another active subsidiary, Everwood Agricultural Products International Inc. (“Everwood”), which recycled the spent plastic media and waste plastic containers into plastic lumber for the agricultural industry. In December, 2006, as a result of continued losses and Everwood’s inability to obtain an adequate supply of raw materials to make posts and attain cost-efficient production, the Company decided to permanently cease its operations in St. Thomas, Ontario, to focus its efforts in the plastic media market, and to develop a nylon reclamation project in Kingston, Ontario. Based on a feasibility study completed in July, 2008, that reclamation project was determined to be uneconomical and was not pursued.





In November, 2008, the Company signed a License Agreement with Energy Quest Inc. Under the terms of that agreement, the Company had the exclusive rights to commercialize and/or or manufacture, market and distribute Energy Quest's Gasification Technologies in the People's Republic of China. The Company determined, however, that it was not in its best interests to pursue that business.





On February 25, 2010, the Company changed its name to Global Green Matrix Corp. from Poly-Pacific International Inc. and consolidated its common shares on the basis of one (1) new post consolidation share for every fifteen (15) pre consolidation common shares.  Since then, the Company has focused its efforts on exploring and pursuing new environmentally sound methods and technologies in recycling and waste management.





The key components of the Company’s current business are the result of agreements entered into in December, 2011 and March, 2012, as follows:


§
PowerMaster – a waste reduction technology


§
DryVac – an integrated waste de-watering and drying technology for commercial and industrial applications


§
Intercept Rentals – providing equipment to support the oil industry





Further details of these business components are provided in the Business Overview section below.





8




Listing Information





Global Green Matrix Corp. is a junior industrial company that was first listed in Canada in 1995 and trades as a Tier 1 company on the TSX Canadian Venture Exchange (TSX-V:GGX), which is its primary exchange. The Company began trading on the Over The Counter Bulletin Board (OTCBB: GGXCF.OB) in December, 2005, and on the Frankfurt Stock Exchange (POZG.F) and the Berlin Stock Exchange (AOLGDN) in January, 2007.





The address of our principal executive offices is 943 Canso Drive, Gabriola, British Columbia, V0R 1X2   The name and address of our registered agent in Canada is:  Davis LLP, Livingston Place, 1000-250 2nd St. SW, Calgary, Alberta, T2P 0C1. The company’s administrative office is located at 943 Canso Drive, Gabriola, British Columbia, Canada V0R 1X2  250-247-8689.





B. Business Overview





The key components of the Company’s waste management and energy sector business are outlined below.





PowerMaster (Inergy Plus Technologies Inc.)





On December 10, 2011, the Company signed a definitive Distribution/Dealer License Agreement with Inergy Plus Technologies Inc. (“Inergy Plus”). The agreement provides Global Green with the exclusive right to utilize Inergy Plus’ technologies for Canada including the right to license, sell, operate and provide warranty services. The primary technology is called the ReCyclone Advanced Gyroscopic Mill, also called the “PowerMaster.” The license to Global Green includes all current and future applications for the PowerMaster as registered with the United States Patent and Trademark office and all present and future intellectual property rights related to Inergy’s technologies during the 10 year term of the agreement.





The Powermaster – AGM grinds, dehydrates, and separates components of domestic and commercial waste, resulting in revenue from recyclables and a viable refuse derived fuel. It accomplishes all of this in a very cost effective fashion, with low maintenance and associated operating costs. Combined with other proprietary and “off the shelf” components like shredders, metal separators and screens a Powermaster – AGM will handle 30,000 tons of municipal solid waste annually with modular expansion capabilities available as volumes and needs increase.





Subsequent to the year-end, the Company entered into an agreement with Inergy Plus to end and transfer its exclusive license agreement.  The Company then transferred the exclusive license to 0 Waste 2 Energy Canada Ltd. (“0 Waste”) and 0 Waste agrees to pay the Company the sum of $150,000 payable in instalments on the sale of the first three units of the PowerMaster in the licensed area.  As the timing of the sale of the three units cannot be reasonably measured or the collection thereafter assured, the Company wrote-off the net book value of the PowerMaster licenses of $101,555 to $nil.





I-Des and DryVac





On December 23, 2011, the Company signed a Distribution Agreement with I-Des Inc. and DryVac Services Canada Inc. (“I-Des and DryVac”). DryVac is a system for dewatering and drying the solids from liquid slurries, providing an environmentally friendly way to reuse the waste. The Distribution Agreement gives Global Green the exclusive right to exploit the technologies developed and owned by I-Des and DryVac for a period of 2 years for all of Canada, in return for a onetime payment in the amount of $250,000. The Distribution Agreement allows for renewal of the term for an additional two (2) years provided that 60 days’ notice is given by the Company and that it is not in default with any terms of the agreement.





On January 23, 2012, the Company signed an amendment to the Distribution Agreement to obtain additional rights to sell DryVac units in the State of Utah, USA. In consideration of the additional territory, the Company has paid an additional distributor fee to I-Des and DryVac in the amount of US$150,000.





As at December 31, 2012, the Company evaluated the business relationship with I-Des and DryVac and due to the lack of sale potential for these technologies in Canada, the Company decided to write off the net book of these licences of $392,253 to $nil





Intercept Rentals





On March 20, 2012, the Company completed a share purchase agreement to acquire all of the issued and outstanding shares of 1503826 Alberta Ltd., carrying on business as “Intercept Rentals”, from arm’s length third parties, subject to TSX Venture Exchange final approval, now received. Under IAS, the deemed purchase price of $1,620,000 (per agreement - $1,440,000) was satisfied by the issuance of 12 million common shares of the Company at a deemed price of $0.12 per share. As required by the purchase agreement, the common shares will be held in escrow pursuant to the terms of a voluntary share escrow agreement and released, as to 1/3 of such amount, on the 4, 8 and 12 month anniversaries of the closing date. In addition, the Company has granted to the former shareholders of Intercept Rentals, or their nominee, a 10 per cent royalty on the gross revenues from the operation of the frac water heating technology for a period of 10 years, at which time it expires.




9





Intercept Rentals provides equipment to support the oil industry with products that focus on efficiency as well as safety for the workers. The latest addition to Intercept is a Frac Water Heating System which is safe to operate, safe to the well site infrastructure, and safe to the environment.  The units not only burn the fuel cleanly and completely but deliver almost all of the heat to the water being heated, which we believe makes the system the safest and most environmentally friendly heating unit available.  For our customers this means increased work efficiency, decreased service costs and a healthier environment.





Intercept’s “Power Tongs” have an open mouth design capable of clamping pipes from 1-11/16” to 3-1/2” (outside diameters), and can join pipes of different diameters.  The Power Tongs are hauled in 16’ enclosed trailers, which house either a diesel powered air-over hydraulic power pack or a diesel-powered electric-over hydraulic power pack. Each unit has over 100’ of hydraulic hose.
 
 Intercept currently has six Thru-Tubing Power Tong Units:


·
2 Diesel Powered, Air over Hydraulic Driven
 ·
2 Diesel Powered, Electric over Hydraulic Driven
 ·
2 Diesel over Hydraulic Driven


Power Tongs are designed to, among other things:


§
Increase work efficiency
 §
Decrease service costs (eliminating potential Fishing)
 §
Reduce lost man-hours due to injury
 §
Comply with all OHS rules and regulations





C. Organizational Structure





The Company’s only active subsidiary is1503826 Alberta Ltd., carrying on business as “Intercept Rentals”, of which the Company owns 100%. That company, incorporated in the province of Alberta, Canada, was acquired in March, 2012.





D. Property, Plants and Equipment





The Company’s equipment includes the equipment described above for Intercept Rentals acquired in March, 2012 and frac water heating units acquired during the year.








ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS





The following discussion and analysis should be read in conjunction with our audited financial statements for the year ended December 31, 2012 and notes thereto which are included herein.Our financial results are now being reported in accordance with International Financial Reporting Standards (“IFRS”). As a result, accounting policies, presentation, financial statement captions and terminology used in this discussion and analysis may differ from those used in previous financial reporting.





Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls and to ensure that information used internally or disclosed externally, including the financial statements and management discussion and analysis (“MD&A”), is complete and reliable.  The Company’s board of directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders.  The board’s audit committee meets with management on a quarterly basis to review the financial statements including the MD&A and to discuss other financial, operating and internal control matters.





The key component of the Company’s business going forward is the result of an agreement entered into in March, 2012, namely:


§
Intercept Rentals – providing equipment to support the oil industry





As a result, financial information included in this report may not necessarily be indicative of our future operating results or financial condition.





The Company’s plan is to continue to explore and pursue new environmentally sound methods and technologies in waste management and reclamation, and energy sector services, while creating significant value for our shareholders as a leader in that field.




10





A. Operating Results





Year Ended December 31, 2012 Compared to Year Ended December 31, 2011





This review of the results of operations should be read in conjunction with the consolidated financial statements for the year ended December 31, 2012:





Overall, the net loss was $1,728,041 for the year ended December 31, 2012 compared to $552,855 for the year ended December 31, 2011.  The increase of $1,176,405 in operating expenses for the periods ending December 31, 2012 and 2011 are attributed to the following:





Salaries and wages was $463,618 (2011 - $nil) for the year ended December 31, 2012 as the Company started paying Intercept Rentals’ employees after the acquisition.





Depreciation was $167,957 (2011 - $nil) for the year ended December 31, 2012 as the Company acquired Intercept Rentals’ equipment.





Marketing and conferences was $113,057 (2011 - $3,011) for the year ended December 31, 2012.  The change was mainly due to paying consultants for presentations made in London, Geneva, Zurich, Brussels and Paris.





Professional fees was $183,753 (2011 - $76,554), and travel was $160,167 (2011 - $13,388) for the year ended December 31, 2012.  The increase was mainly due to paying fees and expenses relating to acquisition of DryVac and PowerMaster licenses and Intercept Rentals.





Years Ended December 312012


2011Total Revenues

$
518,733


$
-Total Expenses

$
1,718,507


$
541,446Other Items

$
528,267


$
11,409Net Income (Loss) available to Common Shareholders

$
(1,728,041
)

$
(552,855
)Net Income (Loss) per share

$
(0.03
)

$
(0.02
)Diluted Net Income (Loss) per share

$
(0.03
)

$
(0.02
)Dividends Declared per share

$
-


$
-Total Assets

$
3,240,866


$
1,118,873Total Liabilities

$
(1,383,556
)

$
(286,997
)Net Assets

$
1,857,310


$
831,876Additional Paid in Capital

$
4,146,934


$
4,075,087Accumulated Comprehensive Income

$
53,195


$
53,195Common Shares Capital

$
10,659,919


$
7,501,691Shares To Be Issued

$
10,000


$
486,600Accumulated Deficit

$
(13,012,738
)

$
(11,284,697
)Total Shareholders Equity (Deficit)

$
1,857,310


$
831,876Common Shares outstanding (1)


80,966,462



45,382,697Weighted Average – Diluted Shares


68,038,758



23,574,760Share Purchase Warrants (2)


40,388,663



15,398,333




11




Summary of Unaudited Quarterly Results





The following table presents the unaudited, selected financial data for each of the last eight quarters to December 31, 2012:





Dec 31,

2012


Sep 30,

2012


Jun 30,

2012


Mar 31,

2012


Dec 31,

2011


Sep 30,

2011


Jun 30,

2011


Mar 31,

2011Net loss ($)


(653,068
)


(469,049
)


(381,317
)


(224,607
)


(287,032
)


(116,195
)


(82,993
)


(66,635
)Basic and diluted

loss per share ($)


(0.01
)


(0.01
)


(0.01
)

nil



(0.01
)


(0.01
)

nil


nil




The variation between the quarters is due to changes that reflect the change in corporate and business development activities during those quarters. In addition, the variation in loss over the fiscal quarters is also attributable to write-down of licenses and acquisition of and Intercept Rentals.





Fourth Quarter





Overall, the Company recorded a net loss of $653,068 ($0.01 per common share) for the three months ended December 31, 2012 as compared to a net loss of $287,032 ($0.01 per common share) for the three months ended December 31, 2011.





Operating expenses for the fourth quarter were $495,183 in 2012 compared to the $282,134 for the same period in 2011.  The overall increase is primarily due to depreciation of $77,321 (2011 - $nil), royalties of $50,293 (2011 - $nil), salaries and wages of $162,768 (2011 - $nil), and transportation charges of $78,077 (2011 - $nil).





B. Liquidity and Capital Resources





As of December 31, 2012, the working capital deficiency was $913,811 as compared to working capital of $625,979 as at December 31, 2011.





The Company’s cash position decreased by $640,085 to $40,887 as of December 31, 2012 as compared to a cash balance of $680,972 as at December 31, 2011. The Company used $1,150,079 (2011 - $346,574) in operating activities for the year ended December 31, 2012.  During the year end December 31, 2012, the Company received $1,617,044 (2011 - $1,376,357) from financing activities and used $1,107,050 (2011 - $352,408) in investing activities.





Net cash used in investing activities for the year ended December 31, 2012 was $1,107,050 (2011 - $352,408) which primarily relates to acquisition of licenses of $152,670 (2011 - $352,408) and acquisition equipment of $999,526 (2011 - $nil).





Net cash from financing activities for the year ended December 31, 2012 was $1,617,044 (2011 - $1,376,357) was primarily the result of issuance of shares on private placement of $1,218,339 (2011 - $1,000,000), net of share subscription advances of $10,000 (2011 - $486,600) and less share issuance costs of $98,590 (2011 - $57,138) and cash of $648,547 (2011 - $12,500) from loans and borrowings.





The Company believes that the remaining balance of cash will not be sufficient to meet its current working capital requirements over the fiscal year and any shortfall that may occur will need to be funded through the issuance of common shares and loans from related parties.





The Company had no commitments for property and equipment expenditures for 2012.  The Company expects that any property and equipment expenditures incurred, based on future needs, will be funded from working capital and/or from operating or capital leases.





C. Research and Development, Patents and Licenses





The Company has not incurred any research and development since 2005.   The last costs incurred for research and development was in 2004 in the amount of $115,340.





On December 10, 2011, the Company signed a definitive Distribution/Dealer License Agreement with Inergy Plus Technologies Inc. (“Inergy Plus”). The agreement provides Global Green with the exclusive right to utilize Inergy Plus’ technologies for Canada including the right to license, sell, operate and provide warranty services. The primary technology is called the ReCyclone Advanced Gyroscopic Mill, also called the “PowerMaster.” The license to Global Green includes all current and future applications for the Power Master as registered with the United States Patent and Trademark office and all present and future intellectual property rights related to Inergy’s technologies during the 10 year term of the agreement.  Subsequent to the year-end, the Company transferred the exclusive license to 0 Waste 2 Energy Canada Ltd. (“0 Waste”) and 0 Waste agrees to pay the Company the sum of $150,000 payable in instalments on the sale of the first three units of the PowerMaster in the licensed area.




12





On December 23, 2011, the Company signed a Distribution Agreement with I-DES INC. and DryVac Services Canada Inc. (“I-Des and DryVac”). The Distribution Agreement gives Global Green the exclusive right to exploit the technologies developed and owned by I-Des and DryVac for a period of 2 years for all of Canada, in return for a onetime payment in the amount of $250,000. The Distribution Agreement allows for renewal of the term for an additional two (2) years provided that 60 days notice is given by the Company and that it is not in default with any terms of the agreement, one of which states that Global Green will sell a minimum of four (4) DryVac units per year. On January 20, 2012, the Company completed an amendment to the Distribution Agreement whereby it obtained additional rights to sell DryVac units in the State of Utah in consideration of a fee of $150,000.  As at December 31, 2012, the Company evaluated the business relationship with I-Des and DryVac and due to the lack of sale potential for these technologies in Canada, the Company decided to write off the net book of these licences of $392,253 to $nil





D. Trend Information





Our acquisition of licence and distribution agreements for Inergy Plus and DryVac in December, 2011, together with our acquisition of Intercept Rentals in March, 2012 may cause reported financial information to be not necessarily indicative of future operating results or financial condition.





E. Off-balance Sheet Arrangements





There are no off-balance sheet arrangements.





F. Tabular Disclosure of Contractual Obligations





Not applicable.





Critical Accounting Policies and Estimates





Basis of preparation and accounting policies





Our company has prepared its financial statements included with this report in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”). IFRS represents standards and interpretations approved by the IASB and are comprised of IFRS, International Accounting Standards (“IAS’s”), and interpretations issued by the IFRS Interpretations Committee (“IFRIC’s”) and the former Standing Interpretations Committee (“SIC’s”). Our company adopted IFRS in accordance with IFRS 1 – First-time Adoption of International Financial Reporting Standards (“IFRS 1”) with a transition date of January 1, 2010. Our financial statements were previously prepared in accordance with U.S. GAAP.





The financial statements have been prepared in accordance with IFRS standards and interpretations effective as of December 31, 2012. Note 2 to the consolidated financial statements for the year ended December 31, 2012 provides details of significant accounting policies.





Critical Accounting Estimates





The preparation of the Company’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.





Areas requiring a significant degree of estimation and judgment relate to amortization of licenses, depreciation of property, plant and equipment, fair value measurements for financial instruments and share-based payments and other equity-based payments, and the recoverability and measurement of deferred tax assets and liabilities.  Actual results may differ from those estimates and judgments.





Future Accounting Changes





Certain pronouncements were issued by the International Accounting Standards Board (“IASB”) or the International Financial Reporting Interpretations Committee (“IFRIC”) that are mandatory for accounting periods after December 31, 2012. The Company does not expect the below standards to have a material impact on the financial statements, although additional disclosures may be required.




13





The following new Standards were issued by the IASB, and are effective for annual periods beginning on or after January 1, 2013, with the exception of IFRS 9 which is effective January 1, 2015. Early application is permitted if all five Standards are adopted at the same time.





i)
Consolidated Financial Statements





IFRS 10 Consolidated Financial Statements (“IFRS 10”) will replace IAS 27 Consolidated and Separate Financial Statements, and SIC 12 Consolidation – Special Purpose Entities. The portion of IAS 27 that deals with separate financial statements will remain. IFRS 10 changes the definition of control, such that the same consolidation criteria will apply to all entities. The revised definition focuses on the need to have both “power” and “variable returns” for control to be present. Power is the current ability to direct the activities that significantly influence returns. Variable returns can be positive, negative or both. IFRS 10 requires continuous assessment of control of an investee based on changes in facts and circumstances.





ii)
Joint Arrangements





IFRS 11 Joint Arrangements (“IFRS 11”) will replace IAS 31 Interests in Joint Ventures, and SIC 13 Jointly Controlled Entities – Non-monetary Contributions by Venturers. IFRS 11 defines a joint arrangement as an arrangement where two or more parties contractually agree to share control. Joint control exists only when the decisions about activities that significantly affect the returns of an arrangement require the unanimous consent of the parties sharing control. The focus is not on the legal structure of joint arrangements, but rather on how the rights and obligations are shared by the parties to the joint arrangement. IFRS 11 eliminates the existing policy choice of proportionate consolidation for jointly controlled entities and now requires equity method accounting. In addition, the Standard categorizes joint arrangements as either joint operations or joint ventures.





iii)
Disclosure of Interests in Other Entities





IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”) will replace the disclosure requirements currently found in IAS 28 Investment in Associates, and is the new Standard for disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities, including information about the significant judgments and assumptions that it has made in determining whether it has control, joint control or significant influence in another entity. IFRS 12 sets out the required disclosures for entities reporting under IFRS 10 and IFRS 11.





iv)
Separate Financial Statements





The new IAS 27 Separate Financial Statements (“IAS 27”) has been updated to require an entity presenting separate financial statements to account for those investments at cost or in accordance with IFRS 9 Financial Instruments. The new IAS 27 excludes the guidance on the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent, which is within the scope of the current IAS 27 Consolidated and Separate Financial Statements, and is replaced by IFRS 10.





v)
Investments in Associates and Joint Ventures





The new IAS 28 Investments in Associates and Joint Ventures (“IAS 28”) has been updated and it is to be applied by all entities that are investors with joint control of, or significant influence over, an investee. The scope of the current IAS 28 Investments in Associates does not include joint ventures.





vi)
IFRS 13 Fair Value Measurement (“IFRS 13”)





IFRS is issued by the IASB in May 2011, and is effective for annual periods beginning on or after January 1, 2013. Early application is permitted. IFRS 13 was issued to remedy the inconsistencies in the requirements for measuring fair value and for disclosing information about fair value measurement in various current IFRSs. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, i.e. an exit price.





vii)
IFRS 9 Financial Instruments (“IFRS 9”)





In November 2009, the IASB published IFRS 9, which covers the classification and measurement of financial assets as part of its project to replace IAS 39, “Financial Instruments: Recognition and Measurement”. In October 2010, the requirements for classifying and measuring financial liabilities were added to IFRS 9. Under this guidance, entities have the option to recognize financial liabilities at fair value through earnings. If this option is elected, entitles would be required to reverse the portion of the fair value change due to own credit risk out of earnings and recognize the change in other comprehensive income.





14





ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A. Directors and Senior Management





Randy Hayward, B. Comm, LLB. – President, Chief Executive Officer, and Director





Randy Hayward maintained a successful law practice in Edmonton, Alberta for 20 years. During the latter phase of his law practice, he founded and managed Canadian Dispute Resolution (Alberta) Ltd and marketed the service of mediation to the legal community and the insurance industry. Mr. Hayward also earned his Diploma in Counseling at P.D. Seminars from the Haven Institute on Gabriola Island, B.C. After relocating to the west coast from Edmonton, he has worked with numerous private and public companies for 15 years, being responsible for fund raising, strategic planning and business development in various positions. Mr. Hayward has been a consultant to a number of successful public companies trading on the TSX Venture Exchange, raising investment capital and working in corporate communications, business development and investor relations. Mr. Hayward has been President of the Company since August, 2006.





Richard Oravec, Director





Mr. Richard Oravec, a resident of New York, holds an MBA from Fordham University and a BA from Boston University. Mr. Oravec is a seasoned financial engineer of emerging technology companies, having successfully structured corporate finance syndications and private placements in small and medium sized public and private companies. Through his diverse network in the public and private sectors, Mr. Oravec brings to the Company his experience and resources in the raising of capital, creating investment structures, strategic planning, marketing and development, and developing strategic business alliances for accelerated growth.





Greg Pendura, Chief Financial Officer and Director





Mr. Pendura has more than 35 years of experience in founding, financing and advising emerging private and public companies. An original founder ofResin Systems Inc. (now known as RS Technologies Inc.), Mr. Pendura spent 12 years with Resin Systems until he retired as President, CEO and Chairman of the Board.During his tenure with Resin Systems Inc., Mr. Pendura was instrumental in the company achieving a market capitalization of over $200 million as well as raising more than $100 million of investment capital during its formative years.





John Anderson, Director





Mr. Anderson holds a B.A. from the University of Western Ontario and is the co-founder of Aquastone Capital Advisors Limited Partnership, a USA based gold investment fund. Mr. Anderson is an Entrepreneur with over fifteen years of business experience in the capital markets. His primary areas of expertise are business financing, business development, merger and acquisition. He has extensive experience in working in Asia, Europe and Canada. Mr. Anderson's extensive background and experiences give him a unique platform from which to make business decisions and create opportunities.





Herbert Rainford-Towning, Director





Mr. Towning has been on the Company’s advisory Committee since February 2012. Mr. Towning is university educated at Nottingham University and a postgraduate of the London School of Economics. He joined CT Bowring & Co in 1956 and worked with various Banking Houses in London, leaving the UK in 1974 to commence an international banking career in Europe, the United States, Bahamas and the Arabian Gulf with the International Investment Corporation Bahrain until 1994.





In the last few years, Mr. Towning has become involved in environmental issues particularly waste management and recycling. He founded OWaste2Energy Company Ltd. in the UK with a waste to energy technology in Wales. This system is now operational in Mexico through his Mexican Company OWaste Mexico de CV which has joint ventures with certain Municipalities in Mexico.





Mr. Towning’s extensive background and experience provides him a unique ability to make business decisions and create opportunities.





15




Marvin Jones, Director





Mr. Jones is an established oil & gas executive with over 50 years of industry experience, notably 30 years of management in the drilling contracting industry.





Mr. Jones has been a successful consultant to the oil & gas industry since 2002, having worked on major national and international projects with companies such as Griffiths Energy Ltd. Kodiak Energy Inc., Thomson Industries, Challenger Drilling, and Trinidad Drilling Ltd.





Through 1997 to 2002; Mr. Jones served on the board of Trinidad Drilling Ltd. and acted as the President for three years.  From 2005 to 2008 he also served as a Director of Kodiak Energy Inc.





B. Executive Compensation





The following table sets out the compensation provided to our directors and senior management for performance of their duties during the fiscal year ended December 31, 2012:





Summary Compensation Table


Name and Principal Position
Period Ended December 31

Salary

(C$)


Bonus

(C$)


Stock

Awards

(C$)


Option

Awards

(C$)


Non-Equity

Incentive

Plan

Compensation

(C$)


All Other Compensation

(C$)


Total

(C$)Randy Hayward,

Director and Chief Executive Officer
2012


120,000



-



-



-



-



-



120,000




Our company does not have any pension or retirement plans, nor does our company compensate its directors and officers by way of any material bonus or profit sharing plans.


The Company cancelled all outstanding stock options on October 9, 2009 and no stock options were issued to the directors and officers during the year ended December 31, 2012. On January 7, 2013, the Company granted 2,600,000 stock options at a price of $0.10 per common share to directors, officers and consultants of the Company. Each option grant will vest quarterly. As per the Company's Stock Option Plan, the options granted are exercisable until January 7, 2017.





C. Board Practices





National Policy58-201 Corporate Governance Guidelines (the “National Policy”) recommends that boards of directors of reporting issuers be composed of a majority of independent directors.  The Board of Directors is currently comprised of six (6) directors, each of whom is proposed for election at the annual general meeting.  Pursuant to the Terms of Reference, the Board is responsible for assessing director independence.  The Board of Directors has assessed the independence of each director in accordance with National Instrument 58-101 – Disclosure of Corporate Governance Practices and MI 52-110.  Following this assessment, the Board concluded that four of the six directors, being Messrs. Oravec, Anderson, Rainford-Towning, and Jones are independent.  Mr. Hayward and Mr. Pendura are not considered independent by virtue of their executive positions with the Corporation.





The Corporation and the Board of Directors recognize the significant commitment involved in being a member of the Board of Directors.  The Board of Directors generally meets as the need arises.  The frequency and length of meetings and the nature of agenda items depend upon the circumstances. When held, meetings are generally lengthy, detailed and well attended, and are conducted in an atmosphere that encourages participation and independence.  In order to promote candid discussion among the independent directors, the independent directors determine at every board meeting whether an in-camera session is required, from which the non-independent directors, and any management invitees in attendance are excused.





In accordance with the Articles of the Company the number of directors shall be such number not less than one as the Company by ordinary resolution may from time to time determine and each director shall hold office until the next annual general meeting following his or her election or until his or her successor is elected. The Company has six directors.





The officers of the Company are elected by the Board of Directors as soon as possible following each annual general meeting and shall hold office for such period and on such terms as the board may determine. Executive officers are appointed by and serve at the discretion of the Board of Directors.Mr. Hayward was appointed President of the Corporation on November 4, 2006.




16





The members of the Company’s Audit Committee are appointed by the Board of Directors as soon as possible following each annual general meeting. The current audit committee members are Richard Oravec (independent), Greg Pendura and Marvin Jones (independent). The members of the Company’s Compensation Committee are appointed by the Board of Directors as soon as possible following each annual general meeting. The current compensation committee members are Greg Pendura, John Anderson (independent) and Marvin Jones (independent).





The Company has no arrangements in place for provision of benefits to its directors, or upon their termination, other than management fees to Mr. Hayward as shown in the schedule above. We did not pay any other compensation to executive officers or directors during the last completed financial year. Costs for the use of home offices by officers and consultants were reimbursed in the year ended December 31, 2012. Directors were also reimbursed for reasonable expenses.





D. Employees





At December 31, 2012, our subsidiaryIntercept Rentals had 7 employees.





E. Share Ownership





The authorized capital of the Company consists of an unlimited number of common shares without nominal or par value and an unlimited number of preferred shares.





Common Shares, Warrants and Options:





At April 30, 2013, there were 84,366,462 shares outstanding. As at December 31, 2012, the number of issued common shares was80,966,462, compared to 45,382,697as at December 31, 2011.  No preferred shares have been issued.





As of April 30, 2013, all directors and officers of the Company as a group own and control 2,671,836 shares, approximately 3.17% of the Company's 84,366,462 common shares outstanding. As a group, they could own and control 10,038,057 shares, approximately 7.62% of the Company's fully diluted common shares, if all outstanding warrants and options were to be exercised.








ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A. Major Shareholders





As of December 12, 2012, no shareholder is known by us to be a beneficial owner of more than five (5%) of our issued and outstanding Common Shares.





Voting rights of major shareholders are no different than the voting rights of other shareholders





To the best of our knowledge, the Company is not owned or controlled, either directly or indirectly, by another corporation, government, or any other natural or legal persons. There are no arrangements, known to the Company, the operation of which may, at a subsequent date, result in a change of control of the Company.





B. Related Party Transactions





Key management personnel compensation





Years endedDecember 31,

2012


December 31,

2011Short-term employee benefits - management

$
120,000


$
150,000Office rent


3,800



6,000$
123,800


$
156,000





The amounts charged to the Company for the services provided have been determined by negotiation among the parties and, in certain cases, are covered by signed agreements.




17





Related party balances





The following amounts due to related party are included in trade and other payables:





December 31,

2012


December 31,

2011Officer of the Company

$
1,044


$
3,963




These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.





C. Interests of Experts and Counsel





Not applicable.





ITEM 8. FINANCIAL INFORMATION





A. Consolidated Statements and Other Financial Information





See Item 18. Financial Statements, which includes our audited financial statements and notes.





Legal Proceedings





Our management is not aware of any legal or arbitration proceedings, including those related to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, significant effects on the Company’s financial position or profitability. This includes governmental proceedings pending or known to be contemplated.





Dividend Policy





The Company has neither declared nor paid any dividends to date on its outstanding shares. The Company intends to retain any future earnings to finance the development of its properties, and accordingly, does not anticipate paying any dividends in the foreseeable future.





B. Significant Changes





We are not aware of any significant changes since the date of our annual financial statements included in this document that are not otherwise disclosed in this report.








ITEM 9. THE OFFER AND LISTING





A. 4. Price History





The principal trading market for the Company's Common Shares is the TSX Venture Exchange (TSX-V) under the symbol "GGX". The following tables set forth, for the periods indicated, the high and low sales prices per share of the Company's Common Shares on the TSX-V in Canadian dollars. Historical share prices have been adjusted to reflect the 15:1 rollback which was effective February 25, 2010.





Year Ended
High
Low31-Dec-08
$2.10
$0.1531-Dec-09
$0.90
$0.1531-Dec-10
$0.30
$0.0631-Dec-11
$0.19
$0.0231-Dec-12
$0.04
$0.04




18




Quarter Ended
High
Low31-Mar-11
$0.10
$0.0630-Jun-11
$0.085
$0.0630-Sep-11
$0.065
$0.0331-Dec-11
$0.19
$0.0231-Mar-12
$0.13
$0.1330-Jun-12
$0.10
$0.1030-Sep-12
$0.05
$0.0531-Dec-12
$0.04
$0.04





Month Ended
High
Low30-Nov-12
$0.05
$0.0531-Dec-12
$0.04
$0.0431-Jan-13
$0.05
$0.0528-Feb-13
$0.08
$0.0831-Mar-13
$0.07
$0.0730-Apr-13
$0.10
$0.09





B. Plan of Distribution





Not Applicable.





C. Markets





Not Applicable.





D. Selling Shareholders





Not Applicable.





E. Dilution





Not Applicable.





F. Expenses of the Issue





Not Applicable.








ITEM 10. ADDITIONAL INFORMATION





A. Share Capital





Not Required.





B. Memorandum and Articles of Association





The Articles of Incorporation of the Company was included as Exhibit 1.1 to the Company's Report on Form 20-F, filed with the Securities and Exchange Commission on March 2, 2005. The Articles of Association were approved by shareholders on October 25, 1995.  Amendments were registered on April 23, 1999 and on June 12, 2003.





The Company is incorporated pursuant to theCompanies Act, Chapter 21, Revised Statutes of Alberta 2000 (Companies Act), which provides for the powers, rights and responsibilities of all corporations registered within the jurisdiction of the Province of Alberta.




19





The primary requirements and provisions of the Company’s articles of association are included in the Companies Act and apply to the Company, subject only to changes that have been made through Directors’ Resolutions that have been filed as certificates and amendment and registration of restated articles, as included in Exhibit 1.0.  Pursuant to the Companies Act, (a) a director may not vote on a proposal, arrangement or contract in which the director has a material interest; (b) the directors may not, in the absence of an independent quorum, vote compensation to themselves or any members of their body; (c) the directors may only exercise borrowing powers, or vary those powers, through the approval of a majority of their number attendant at a duly convoked meeting of directors, with the vote results being recorded in the minutes of the meeting; (d) there is no age limit requirement in respect of retirement or non-retirement of directors; and (e) ownership of shares is not required for director’s qualification.





Any change in the rights of holders of the stock, however proposed, must be approved by at least a two-thirds majority vote of the common shareholders.  Pursuant to the Companies Act and the regulations of the Alberta Securities Commission, the vote may be conducted through a formal polling of shareholders, or it may be taken at a duly convoked general or special meeting of shareholders.   The law requires that at least one general meeting of shareholders must be convoked each year.  The notice for a general or extraordinary meeting must be promulgated at least 45 days in advance of the meeting date through delivery to all shareholders of record as at a date, prior to the date of issuance of the notice, which must be published with the notice.





C. Material Contracts





We have not entered into any material contracts outside the ordinary course of business during the two years immediately preceding the publication of this report. See Item 4.B. Business Overview, for a summary of agreements entered into in connection with our three business components: PowerMaster; DryVac; and Intercept Rentals.





D. Exchange Controls





There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or which affect the remittance of dividends, interest or other payments to non-resident holders of our common shares. Any remittances of dividends to United States residents and to other non-residents are, however, subject to withholding tax. See “Taxation” below.





There are no limitations imposed by the laws of Canada, the laws of Alberta or by the charter or other governing documents of the Company on the right of a non-resident to hold or vote common shares of the Company, other than as provided in the Investment Canada Act (the “Investment Act”) and the potential requirement for a Competition Act Review.





The following summarizes the principal features of the Investment Act and the Competition Act Review for a non-resident who proposes to acquire common shares. This summary is of a general nature only and is not intended to be, nor is it, a substitute for independent advice from an investor’s own advisor. This summary does not anticipate statutory or regulatory amendments.





The Canadian Investment Act





The Canadian Investment Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture that is not a “Canadian” as defined in the Investment Act (a “non-Canadian”), unless, after review, the minister responsible for the Investment Act (the “Minister”) is satisfied that the investment is likely to be of a net benefit to Canada. Under the Investment Act, a United States citizen qualifies as a “World Trade Organization Investor.” Subject to the restrictions noted below, an investment in a Canadian business by a World Trade Organization Investor would be reviewable under the Investment Act only if it is an investment to acquire control of such Canadian business and the value of the assets of the Canadian business as shown on its financial statements is not less than a specified amount, which for 1999 was $184 million. An investment in the shares of a Canadian business by a non-Canadian other than a “World Trade Organization Investor” when the Company is not controlled by a World Trade Organization Investor, would be reviewable under the Investment Act if it is an investment to acquire control of the Canadian business and the value of the assets of the Canadian business as shown on its financial statements is $5 million or more, or if an order for review is made by the federal cabinet on the grounds that the investment relates to Canada’s cultural heritage or national identity.





The acquisition by a World Trade Organization Investor of control of a Canadian business in any of the following sectors is also subject to review if the value of the assets of the Canadian business exceeds $5 million (as shown on its financial statements): uranium, financial services (except insurance), transportation services and cultural businesses, which include broadcast media (publication, distribution or sale of books, magazines, periodicals, newspapers, music, film and video products and the exhibition of film and video products), television and radio services. As the Company’s business does not fall under any of the aforementioned categories, the acquisition of control of the Company, in excess of the $5 million threshold, by a World Trade Organization Investor would not be subject to such review.




20





A non-Canadian would acquire control of the Company for purposes of the Investment Act if the non-Canadian acquired a majority of the common shares.





The acquisition of less than a majority but one-third or more of the common shares would be presumed to be an acquisition of control of the Company unless it could be established that, on acquisition, the Company was not controlled in fact by the acquirer through the ownership of common shares. Notwithstanding the review provisions, any transaction involving the acquisition of control of a Canadian business or the establishment of a new business in Canada by a non-Canadian is a notifiable transaction and must be reported to Industry Canada by the non-Canadian making the investment either before or within thirty days after the investment.





Certain transactions relating to common shares are exempt from the Investment Act, including:


·
an acquisition of common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities;


·
an acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Act; and


·
an acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization, following which the ultimate direct or indirect control in fact of the Company, through the ownership of common shares, remained unchanged.





Canadian Competition Act Review





Investments giving rise to the acquisition or establishment, directly or indirectly, by one or more persons of control over, or a significant interest in the whole or part of a business of a competitor, supplier, customer or other person are subject to substantive review by Canada’s Competition Law Authority, the Director of Investigation and Research (the “Director”). If or when the Director concludes that a merger, whether by purchase or lease of shares or assets, by amalgamation or by combination, or otherwise, prevents or lessens, or is likely to prevent or lessen competition substantially, he may apply as may be necessary to eliminate the substantial lessening or prevention of competition. Such substantive merger review power applies to all mergers, whether or not they meet limits for pre-notification under the Competition Act.





In addition to substantive merger review, the Competition Act provides for a pre-notification regime respecting mergers of a certain size. The regime applies in respect of share acquisitions, asset acquisitions, amalgamations and combinations. For ease of reference, this filing refers specifically to share acquisition, although the pre-notification regime applies, with the appropriate modification, to other types of acquisition of control as well.





In order for a share acquisition transaction to be pre-notifiable, the parties to the transaction (being the person or persons who proposed to acquire shares, and the corporation the shares of which are to be acquired), together with their affiliates (being all firms with a 50% or more voting shares linkage up and down the chain) must have:





(i)
aggregate gross assets in Canada that exceed $400,000,000 in value, as shown on their audited financial statements for the most recently completed fiscal year (which must be within the last fifteen (15) months); or(ii)
aggregate gross revenue from sales in, from or into Canada that exceed $400,000,000 for the most recently completed fiscal year shown on the said financial statements; and(iii)
the party being acquired or corporations controlled by that party must have gross assets in Canada, or gross revenues from sales in or from Canada, exceeding $35,000,000 as shown on the said financial statements. Acquisition of shares carrying up to 20% of the votes of a publicly-traded corporation, or 35% of the votes in a private corporation, will not be subject to pre-notification, regardless of the above thresholds. However, exceeding the 20% or the 35% threshold, and again exceeding the 50% threshold, gives rise to an obligation of notification if the size threshold is met.





If a transaction is pre-notifiable, a filing must be made with the Director containing the prescribed information with respect to the parties, and a waiting period (either seven or twenty-one days, depending on whether a long or short form filing is chosen) must expire prior to closing.





As an alternative to pre-notification, the Director may grant an Advance Ruling Certificate, which exempts the transaction from pre-notification. Advance Ruling Certificates are granted where the Director concludes, based on the information provided to him, that he would not have sufficient grounds on which to apply to the Competition Tribunal to challenge the Merger.




21





E. Taxation





This summary is of a general nature only and is not intended to be, and should not be interpreted as, legal or tax advice to any prospective purchaser or holder of the Company’s shares and no representation with respect to the Canadian federal income tax consequences to any such prospective purchaser is made. Accordingly, prospective purchasers of the Company’s shares should consult with their own tax advisors with respect to their individual circumstances.





The following summary describes the principal Canadian federal income tax considerations generally applicable to a holder of the Company’s shares who, for purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”) and the Canada-United States Income Tax Convention, 1980 (the “Convention”) and at all relevant times is resident in the United States and not resident in Canada, deals at arm’s length with the Company, holds the Company’s shares as capital property, and does not use or hold and is not deemed to use or hold the Company’s shares in or in the course of carrying on business in Canada (a “United States Holder”).





This following summary is based upon the current provisions of the Canadian Income Tax Act, the regulations thereunder, all specific proposals to amend the Canadian Tax Act and the regulations announced by the Minister of Finance (Canada) prior to the date hereof and the Company’s understanding of the published administrative practices of the Canada Customs and Revenue Agency (formerly Revenue Canada, Customs, Excise and Taxation). This summary does not take into account or anticipate any other changes in the governing law, whether by judicial, governmental or legislative decision or action, nor does it take into account the tax legislation or considerations of any province, territory or non-Canadian jurisdiction (including the United States), which legislation or considerations may differ significantly from those described herein.





Disposition of the Company’s Shares





In general, a United States shareholder will not be subject to Canadian income tax on capital gains arising on the disposition of the Company’s shares, unless such shares are “taxable Canadian property” within the meaning of the Canadian Income Tax Act and no relief is afforded under any applicable tax treaty. The shares of the Company would be taxable Canadian property of a non-resident if at any time during the five-year period immediately preceding a disposition by the non-resident of such shares, not less than 25% of the issued shares of any class or series of all classes of shares of the Company belonged to the non-resident, to persons with whom the non-resident did not deal at arm’s length, or to the non-resident and persons with whom the non-resident did not deal at arm’s length for purposes of the Canadian Income Tax Act. For this purpose, issued shares include options to acquire such shares (including conversion rights) held by such persons. Under the Convention, a capital gain realized by a resident of the United States will not be subject to Canadian tax unless the value of the shares of the Company is derived principally from real estate (as defined in the Convention) situated in Canada.





F. Dividend and Paying Agents





Not Required.





G. Statement by Experts





See Exhibit 15.1.





H. Documents on Display





The Company’s publicly filed documents are available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission (SEC)’s website on www.sec.gov.





It is also possible to read and copy documents referred to in this annual report on Form 20-F that have been filed with the SEC at the SEC's public reference room located at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges.





Other documents concerning the Company, which are referred to in this report, or which are otherwise deemed to be public information, may be inspected during normal business hours at the administrative office of the Company located at 943 Canso Drive, Gabriola, British Columbia, Canada V0R 1X2. Requests for documents from the Company may be made at 250-247-8689 or by e-mail toinfo@globalgreenmatrix.com.





22




I. Subsidiary Information





The Company’s only active subsidiary is1503826 Alberta Ltd., carrying on business as “Intercept Rentals”, of which the Company owns 100%. That company, incorporated in the province of Alberta, Canada, was acquired in March, 2012.








ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable.








ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





Not applicable.








PART II








ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





Not applicable.








ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS





Not applicable.








ITEM 15. CONTROL AND PROCEDURES





Disclosure Controls and Procedures
 
 Under the supervision and with the participation of management, including our chief executive officer and the chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2012.Disclosure controls and procedures are defined under SEC rules as controls and other procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods. Based on our evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2012 that our disclosure controls and procedures were not effective, given the ongoing late filing  of our annual reports on Form 20-F. We intend to apply the necessary attention and resources to ensure that our disclosure controls and procedures are properly followed and that all future reports are filed within the required time periods.
 
 Management’s Report on Internal Control over Financial Reporting
 
 Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles and includes those policies and procedures that:


(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of a company’s assets,
 
 (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that a company’s receipts and expenditures are being made only in accordance with authorizations of a company’s management and directors, and
 
 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of a company’s assets that could have a material effect on the consolidated financial statements.
  23


Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
 
 However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company.





Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of the Company’s internal control over financial reporting. The Public Company Accounting Oversight Board has defined a material weakness as a “deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis”. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2012.
 
 Our management’s report regarding internal control over financial reporting was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only our management’s report in this annual report on Form 20-F.
 
 Changes in Internal Control Over Financial Reporting
 
 There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.








ITEM 16. RESERVED








ITEM 16A. Audit Committee Financial Expert





Our board of directors has determined that two of the three members comprising the Audit Committee, Messrs. Pendura and Oravec, qualify as audit committee financial experts, based on the criteria provided in the instructions for Item 16 A of Form 20-F.








ITEM 16B. Code of Ethics





Not required.








ITEM 16C. Principal Accountant Fees and Services





The aggregate fees billed by the Corporation’s external auditors in each of the last two fiscal years for audit and other fees are as follows:





Financial Year Ending
Audit Fees
Audit Related Fees
Tax Fees
All Other Fees2012
$25,000
Nil
$2,500
Nil2011
$20,000
Nil
$2,500
Nil





ITEM 16D. Exemption from the Listing Standards for Audit Committees





Not applicable.





24




ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers





Not applicable.








ITEM 16F. Change in Registrant's Certifying Accountant





Not applicable.








ITEM 16G. Corporate Governance





Not Applicable.





25





PART III








ITEM 17. FINANCIAL STATEMENTS





Not applicable. See Item 18.







ITEM 18. FINANCIAL STATEMENTS





We are furnishing the following financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), together with the independent auditor’s report on those statements:





PageIndependent Auditors’ Report
27Consolidated Statements of Financial Position at December 31, 2012 and 2011
28Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2012 and 2011
29Consolidated Statements of Changes in Equity for the Years Ended December 31, 2012 and 2011
30Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011
31Notes to Consolidated Financial Statements, December 31, 2012 and 2011
32




26




K. R. MARGETSON LTD.
Chartered Accountants


210, 905 West Pender Street


Vancouver BC V6C 1L6


Tel:  604.641.4450


Fax: (toll free) 1.855-603-3228








Report of Independent Registered Public Accounting Firm





To the Shareholders of


Global Green Matrix Corp.:




We have audited the consolidated statements of financial position of Global Green Matrix Corp. as at December 31, 2012 and 2011 and the related consolidated statements of comprehensive loss, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.





Management’s Responsibility for the Financial Statements





Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.





Auditors’ Responsibility





Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.





An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.





We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.





Opinion





In our opinion, the financial statements present fairly, in all material respects, the financial position of Global Green Matrix Corp. as at December 31, 2012 and 2011 and the results of its operations, changes in shareholders’ equity and cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.





Emphasis of Matter





Without qualifying our opinion, we draw attention to Note 1 of these financial statements, which states that Global Green Matrix Corp. incurred significant loss from operations, negative cash flows from operating activities and has an accumulated deficit.  This, along with other matters as described in Note 1, indicated the existence of a material uncertainty which may cast doubt about the ability of Global Green Matrix Corp. to continue as a going concern.





/s/ K. R. Margetson Ltd.


Chartered Accountants


Vancouver, Canada


April 30, 2013




27




GLOBAL GREEN MATRIX CORP.


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


(Expressed in Canadian dollars)





Notes


December 31,

2012


December 31,

2011ASSETSCurrent assetsCash




$
40,887


$
680,972Trade and other receivables


5



250,229



96,763Prepaid expenses and deposits






169,620



-Income taxes recoverable






1,292



-Licenses


6



-



135,241Total current assets






462,028



912,976Non-current assetsLoans receivable






95,963



-Licenses


6



-



205,897Equipment


7



1,353,410



-Goodwill


4



1,329,465



-Total non-current assets






2,778,838



205,897TOTAL ASSETS





$
3,240,866


$
1,118,873LIABILITIESCurrent liabilitiesTrade and other payables


8


$
555,073


$
129,323Loans and borrowings


9



807,006



157,674Finance lease obligations


10



12,690



-Deferred gain on sale leaseback


7



1,070



-Total current liabilities






1,375,839



286,997Non-current liabilitiesLoans and borrowings


9



7,717



-TOTAL LIABILIITES






1,383,556



286,997EQUITYShare capital


11



10,659,919



7,501,691Contributed surplus


12



4,146,934



4,075,087Subscription advances






10,000



486,600Deficit






(13,012,738
)


(11,284,697
)Accumulated other comprehensive income






53,195



53,195TOTAL EQUITY






1,857,310



831,876TOTAL LIABILITIES AND EQUITY





$
3,240,866


$
1,118,873




Nature and continuance of operations (Note 1)


Commitments(Note 17)


Subsequent events (Note 21)





On behalf of the Board:“Randy Hayward”
Director
“Greg Pendura”
Director




The accompanying notes are an integral part of these consolidated financial statements.




28




GLOBAL GREEN MATRIX CORP.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


(Expressed in Canadian dollars)





Notes


Year ended

December 31, 2012


Year ended

December 31, 2011REVENUEDistribution fees




$
100,000


$
-Rental income





418,733



-518,733



-EXPENSESAmortization of licenses





-



11,270Consulting fees





148,668



158,286Depreciation





167,957



-Equipment rental





48,821



-Management fees


14



120,000



150,000Marketing and conferences






113,057



3,011Occupancy costs


14



28,939



19,376Office and sundry






102,388



14,855Professional fees






183,753



76,554Royalties






50,293



-Salaries and wages






463,618



-Share-based payments






3,726



-Transfer agent and filing fees






49,043



32,737Transportation charges






78,077



-Travel






160,167



13,388Waste removal






-



62,6251,718,507



542,102Loss before other items






(1,199,774
)


(542,102
)OTHER ITEMSInterest income






1,206



900Amortization of deferred gain on sale leaseback






5,352



-Interest expense






(41,017
)


(11,653
)Impairment of licenses






(493,808
)


-(528,267
)


(10,753
)Total comprehensive loss for the year





$
(1,728,041
)

$
(552,855
)Basic and diluted loss per common share


13


$
(0.03
)

$
(0.02
)Weighted average number of common shares outstanding






68,038,758



23,574,760




The accompanying notes are an integral part of these consolidated financial statements.




29





GLOBAL GREEN MATRIX CORP.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUIITY


(Expressed in Canadian dollars)





Share CapitalNumber of

shares


Amount


Contributed surplus


Subscription advances


Deficit


Accumulated

other

comprehensive income


TotalBalance at December 31, 2010


21,243,055


$
6,325,974


$
4,075,087


$
-


$
(10,731,842
)

$
53,195


$
(277,586
)Private placements


20,000,000



1,000,000



-



-



-



-



1,000,000Share issue costs


-



(57,138
)


-



-



-



-



(57,138
)Debt settlement


4,139,644



232,855



-



-



-



-



232,855Subscription advances


-



-



-



486,600



-



-



486,600Share issuance adjustment


(2
)


-



-



-



-



-



-Loss for the year


-



-



-



-



(552,855
)


-



(552,855
)Balance at December 31, 2011


45,382,697



7,501,691



4,075,087



486,600



(11,284,697
)


53,195



831,876Private placements


23,583,765



1,704,939



-



(486,600
)


-



-



1,218,339Share issue costs


-



(166,711
)


68,121



-



-



-



(98,590
)Issuance for Intercept Rentals (note 4)


12,000,000



1,620,000



-



-



-



-



1,620,000Share-based payments


-



-



3,726



-



-



-



3,726Subscription advances


-



-



-



10,000



-



-



10,000Loss for the year


-



-



-



-



(1,728,041
)


-



(1,728,041
)Balance at December 31, 2012


80,966,462


$
10,659,919


$
4,146,934


$
10,000


$
(13,012,738
)

$
53,195


$
1,857,310





The accompanying notes are an integral part of these consolidated financial statements.




30




GLOBAL GREEN MATRIX CORP.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Expressed in Canadian dollars)





Year ended

December 31, 2012


Year ended

December 31, 2011CASH FLOWS FROM OPERATING ACTIVITIESLoss for the year

$
(1,728,041
)

$
(552,855
)Items not affecting cash:Amortization of deferred gain on sale leaseback


(5,352
)


-Amortization of licenses


-



11,270Depreciation


167,957



--Impairment of licenses


493,808



-Interest expense


8,500



9,174Interest income


(900
)


(900
)Management fees


-



115,000Share-based payments


3,726



--Changes in non-cash working capital items:Trade and other receivables


(90,009
)


(63,599
)Prepaid expenses and deposits


(23,712
)


--Trade and other payables


23,944



135,336(1,150,079
)


(346,574
)CASH FLOWS FROM INVESTING ACTIVITIESCash received on acquisition of Intercept Rentals


21,734



--Loans receivable


23,412



-Acquisition of licenses


(152,670
)


(352,408
)Acquisition of equipment


(999,526
)


-(1,107,050
)


(352,408
)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of shares


1,218,339



1,000,000Share issue costs


(98,590
)


(57,138
)Subscription advances received


10,000



486,600Due to related party


-



(65,605
)Loans and borrowings


648,547



12,500Finance lease obligations


(161,252
)


-1,617,044



1,376,357Change in cash for the year


(640,085
)


677,375Cash, beginning of year


680,972



3,597Cash, end of year

$
40,887


$
680,972




Supplemental disclosure with respect to cash flows(Note 19)




The accompanying notes are an integral part of these consolidated financial statements.




31





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




1. Nature and continuance of operations





Global Green Matrix Corp. (“Global Green” or the “Company”) is focused on exploring and pursuing new environmentally sound methods and technologies in recycling, and in particular, the reclamation sector.  The address of the Company’s registered office is 943 Canso Drive, Gabriola, British Columbia, Canada V0R 1X2.





These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and thus be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these financial statements.





The Company incurred a net loss for the year ended December 31, 2012 of $1,728,041 with a total accumulated deficit of $13,012,738.  There is doubt about the Company’s ability to continue as a going concern.  The Company’s continuation as a “going concern” is dependent upon its ability to achieve profitable operations, upon the continued financial support of its shareholders and upon its ability to obtain additional financing or equity.  While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future.  Accordingly, these financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern.





The consolidated financial statements were authorized for issue on April 25, 2013 by the Board of Directors of the Company.





2. Significant accounting policies and basis of preparation





Basis of presentation





These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board effective as of December 31, 2012.





The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified at fair value through profit and loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information.





Basis of consolidation





These consolidated financial statements include the accounts of the Company and all of its subsidiaries.  Subsidiaries are all entities controlled by the Company.  Control exists when the Company has the power to, directly or indirectly govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account in the assessment of whether control exists.  Subsidiaries are fully consolidated from the date on which control is transferred to the Company.  They are deconsolidated from the date on which control ceases.





The consolidated financial statements at December 31, 2012 include, on a consolidated basis, the assets, liabilities, revenues and expenses of the Company, and its wholly-owned subsidiary, 1503826 Alberta Ltd., described in note 4.





All inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.




32





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




2.            Significant accounting policies and basis of preparation (cont’d)





Significant accounting judgments, estimates and assumptions





The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.





Areas requiring a significant degree of estimation and judgment relate to the recoverability of the carrying value of exploration and evaluation assets, fair value measurements for financial instruments and share-based payments and other equity-based payments, the recognition and valuation of provisions for restoration and environmental liabilities, and the recoverability and measurement of deferred tax assets and liabilities.  Actual results may differ from those estimates and judgments.





Foreign currency translation





The Company’s reporting currency and the functional currency is the Canadian dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.





Transactions in foreign currencies are translated at the exchange rate in effect at the date of the transaction. Foreign denominated monetary assets and liabilities are translated to their Canadian dollar equivalents using foreign exchange rates prevailing at the financial position reporting date. Exchange gains or losses arising on foreign currency translation are reflected in loss for the period.





Equipment





Equipment is carried at cost, less accumulated depreciation and accumulated impairment losses.





The cost of an item consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.





Depreciation is provided at rates calculated to write off the cost of equipment, less the estimated residual value over the useful life, using the declining balance method at various rates ranging from 20% - 30% per annum.





An item is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.  Any gain or loss arising on disposal of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in profit or loss in the consolidated statements of comprehensive loss.





Where an item of equipment comprises major components with different useful lives, the components are accounted for as separate items of equipment.  Expenditures incurred to replace a component of an item of equipment that is accounted for separately, including major inspection and overhaul expenditures are capitalized.





Intangible assets





Intangible assets are recorded at cost.  Intangible assets assessed by the Company with finite useful lives are amortized on a systematic basis over their useful lives.  The amortization period and amortization method for an intangible asset with a finite useful life reflects the pattern in which the assets’ future economic benefits are expected to be consumed.  Where the pattern cannot be reliably determined, the straight-line method is used.  The amortization period and method is reviewed at least at each financial year end.




33


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


2.            Significant accounting policies and basis of preparation (cont’d)





Impairment of assets





At the end of each reporting year the carrying amounts of the Company’ assets are reviewed to determine whether there is any indication that those assets are impaired.  If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.  The recoverable amount is the higher of fair value less costs to sell and value in use.  Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties.  In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.  If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the year.  For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.





Where an impairment subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate and its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years.  A reversal of an impairment loss is recognized immediately in profit or loss.





Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.





Goodwill





Goodwill arises on the acquisition of subsidiaries and represents the excess of the cost of the acquisition over the Company’s interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.  Goodwill is subsequently measured at cost less accumulated impairment losses.





Business combinations





Business combinations are accounted for by applying the acquisition method, whereby assets obtained, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquired business are measured at fair value at the date of acquisition. The acquired business’ identifiable assets, liabilities and contingent liabilities that meet the recognition under IFRS 3, Business Combinations are recognized at their fair values at the acquisition date, except for non-current assets which are classified as held-for-sale in accordance with IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations, and are recognized and measured at fair value, less costs to sell.





To the extent the fair value of consideration paid exceeds the fair value of the net identifiable tangible and intangible assets, goodwill is recognized. To the extent the fair value of consideration paid is less than the fair value of net identifiable tangible and intangible assets, the difference is recognized in income immediately.





Acquisition costs associated with a business combination are expensed in the period incurred.





Provisions





Provisions are recognized when the Company has a present obligation (legal or constructive) that has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. Provisions for environmental restoration, legal claims, onerous leases and other onerous commitments are recognized at the best estimate of the expenditure required to settle the Company's liability.




34


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


2.            Significant accounting policies and basis of preparation (cont’d)





Provisions (cont’d)





Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the obligation. An amount equivalent to the discounted provision is capitalized within tangible fixed assets and is depreciated over the useful lives of the related assets. The increase in the provision due to passage of time is recognized as interest expense.





Related party transactions





Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.





Leases





Leases entered into by the Company in which substantially all of the benefits and risks of ownership are transferred to the Company are recorded as finance leases.  Upon initial recognition, the leases asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.  Subsequent to initial recognition, the assets are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the Company will obtain ownership by the end of the lease terms.  All other leases are classified as operating leases and leasing costs are expensed in the period in which they are incurred.  Lease inducements received by the Company are deferred and depreciated on a straight-line basis over the term of the lease as a reduction in rental expense.





Share capital





The Company’s common shares and share warrants are classified as equity instruments.





Incremental costs directly attributable to the issue of new shares or options are charged directly to share capital.





Share-based payments





The stock option plan allows Company employees and consultants to acquire shares of the Company. The fair value of options granted is recognized as a share-based payment expense with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. Consideration paid on the exercise of stock options is credited to share capital and the fair value of the options is reclassified from contributed surplus to share capital.





The fair value is measured at grant date and each tranche is recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the number of stock options that are expected to vest.





Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized in the statement of loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied.





Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital.




35


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


2.            Significant accounting policies and basis of preparation (cont’d)





Share-based payments (cont’d)





When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.





Financial instruments





a) Financial assets





All financial assets are initially recorded at fair value and designated upon inception into one of the following four categories: fair value through profit or loss (“FVTPL”), loans and receivables, held-to-maturity investments, available-for-sale.





Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through profit and loss. The Company’s cash and cash equivalents and restricted cash are classified as FVTPL.





Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.  The Company’s receivables are classified as loans and receivables.





Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortized cost.  Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period.  The Company has not classified any of its investments as held-to-maturity.





Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not suitable to be classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments and are subsequently measured at fair value.  These are included in current assets. Unrealized gains and losses are recognized in other comprehensive income, except for impairment losses and foreign exchange gains and losses.  The Company has classified investments and restricted investments as available-for-sale financial assets.





At each reporting date, the Company assesses whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or group of financial assets is deemed to be impaired, if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.





b) Financial liabilities





All financial liabilities are initially recorded at fair value and designated upon inception as FVTPL or other financial liabilities. At December 31, 2012, the Company has not classified any financial liabilities as FVTPL.




36


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


2.            Significant accounting policies and basis of preparation (cont’d)





Financial instruments





b) Financial liabilities (cont’d)





Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. The Company’s accounts payable and accrued liabilities, advances from related party, loans payable and secured loans payable are classified as other financial liabilities.





Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives are also classified as held for trading and recognized at fair value with changes in fair value recognized in earnings unless they are designated as effective hedging instruments. Fair value changes on financial liabilities classified as FVTPL are recognized in earnings.





Revenue recognition





Revenue from the rental or sale of products is recognized, net of discounts and customer rebates, at the time goods are shipped and the transfer of significant risks and rewards of ownership has taken place, and collectability is reasonably assured.





Loss per share





The Company presents basic loss per share for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.





Comprehensive income (loss)





Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss) and represents the change in shareholders’ equity which results from transactions and events from sources other than the Company’s shareholders. For the years presented, comprehensive loss was the same as net loss.





Income taxes





Current tax is the expected tax payable or receivable on the local taxable income or loss for the year, using local tax rates enacted or substantively enacted at the balance sheet date, and includes any adjustments to tax payable or receivable in respect of previous years.





Deferred income taxes are recorded using the balance sheet liability method whereby deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable profit or loss.




37


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


2.            Significant accounting policies and basis of preparation (cont’d)





Income taxes (cont’d)





A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized.  Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.





Comparative figures





Certain comparative figures have been reclassified to conform with presentation adopted for the current period.




3. New standards, amendments and interpretations not yet effective





Certain pronouncements were issued by the International Accounting Standards Board (“IASB”) or the International Financial Reporting Interpretations Committee (“IFRIC”) that are mandatory for accounting periods after December 31, 2012. The Company does not expect the below standards to have a material impact on the financial statements, although additional disclosures may be required.





The following new Standards were issued by the IASB, and are effective for annual periods beginning on or after January 1, 2013, with the exception of IFRS 9 which is effective January 1, 2015. Early application is permitted if all five Standards are adopted at the same time.





viii) Consolidated Financial Statements





IFRS 10 Consolidated Financial Statements (“IFRS 10”) will replace IAS 27 Consolidated and Separate Financial Statements, and SIC 12 Consolidation – Special Purpose Entities. The portion of IAS 27 that deals with separate financial statements will remain. IFRS 10 changes the definition of control, such that the same consolidation criteria will apply to all entities. The revised definition focuses on the need to have both “power” and “variable returns” for control to be present. Power is the current ability to direct the activities that significantly influence returns. Variable returns can be positive, negative or both. IFRS 10 requires continuous assessment of control of an investee based on changes in facts and circumstances.





ix) Joint Arrangements





IFRS 11 Joint Arrangements (“IFRS 11”) will replace IAS 31 Interests in Joint Ventures, and SIC 13 Jointly Controlled Entities – Non-monetary Contributions by Venturers. IFRS 11 defines a joint arrangement as an arrangement where two or more parties contractually agree to share control. Joint control exists only when the decisions about activities that significantly affect the returns of an arrangement require the unanimous consent of the parties sharing control. The focus is not on the legal structure of joint arrangements, but rather on how the rights and obligations are shared by the parties to the joint arrangement. IFRS 11 eliminates the existing policy choice of proportionate consolidation for jointly controlled entities and now requires equity method accounting. In addition, the Standard categorizes joint arrangements as either joint operations or joint ventures.





x) Disclosure of Interests in Other Entities





IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”) will replace the disclosure requirements currently found in IAS 28 Investment in Associates, and is the new Standard for disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities, including information about the significant judgments and assumptions that it has made in determining whether it has control, joint control or significant influence in another entity. IFRS 12 sets out the required disclosures for entities reporting under IFRS 10 and IFRS 11.




38


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


3.            New standards, amendments and interpretations not yet effective (cont’d)





xi) Separate Financial Statements





The new IAS 27 Separate Financial Statements (“IAS 27”) has been updated to require an entity presenting separate financial statements to account for those investments at cost or in accordance with IFRS 9 Financial Instruments. The new IAS 27 excludes the guidance on the preparation and presentation of consolidated financial statements for a group of entities under the control of a parent, which is within the scope of the current IAS 27 Consolidated and Separate Financial Statements, and is replaced by IFRS 10.





xii) Investments in Associates and Joint Ventures





The new IAS 28 Investments in Associates and Joint Ventures (“IAS 28”) has been updated and it is to be applied by all entities that are investors with joint control of, or significant influence over, an investee. The scope of the current IAS 28 Investments in Associates does not include joint ventures.





xiii) IFRS 13 Fair Value Measurement (“IFRS 13”)





IFRS is issued by the IASB in May 2011, and is effective for annual periods beginning on or after January 1, 2013. Early application is permitted. IFRS 13 was issued to remedy the inconsistencies in the requirements for measuring fair value and for disclosing information about fair value measurement in various current IFRSs. IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, i.e. an exit price.





xiv) IFRS 9 Financial Instruments (“IFRS 9”)





In November 2009, the IASB published IFRS 9, which covers the classification and measurement of financial assets as part of its project to replace IAS 39, “Financial Instruments: Recognition and Measurement”. In October 2010, the requirements for classifying and measuring financial liabilities were added to IFRS 9. Under this guidance, entities have the option to recognize financial liabilities at fair value through earnings. If this option is elected, entitles would be required to reverse the portion of the fair value change due to own credit risk out of earnings and recognize the change in other comprehensive income.





4. Acquisition of Intercept Rental





On March 20, 2012, the Company acquired all of the issued and outstanding shares of 1503826 Alberta Ltd., carrying on business as "Intercept Rentals", from arm's length third parties pursuant to a share purchase agreement, subject to TSX Venture Exchange final approval.    Intercept Rentals provides equipment to support the oil industry with products that focus on efficiency as well as safety for the workers and a healthier environment.





The purchase was satisfied by the issuance of 12 million common shares of the Company.  Under IAS, as the fair value of the shares was $0.135 (determined by level 1 input) the value of the purchase was recorded as $1,620,000. As required by the purchase agreement, the Company’s common shares will be held in escrow pursuant to the terms of a voluntary share escrow agreement and released, as to 1/3 of such amount, on the 4, 8 and 12 month anniversaries of the closing date. In addition, the Company has granted to the former shareholders of Intercept Rentals, or its nominee, a 10 percent royalty on the gross revenues from the operation of the frac water heating technology for a period of 10 years, at which time it expires.




39


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


4.            Acquisition of Intercept Rental (cont’d)





Identifiable assets acquired and liabilities assumed





Cash

$
21,734Trade and other receivables


62,557Prepaid expenses and deposits


145,908Income taxes recoverable


1,291Loans receivable


119,375Equipment


521,841Trade and other payables


(401,807
)Finance lease obligations


(173,942
)Deferred gain on sale leaseback


(6,422
)Total net identifiable assets

$
290,535





The fair value of the assets acquired and liabilities assumed was determined by the Company’s management based on information furnished by the management of Intercept Rentals.





Goodwill





Goodwill was recognized as a result of the acquisition as follows:





Total consideration transferred

$
1,620,000Less: value of identifiable assets


(290,535
)Goodwill

$
1,329,465




The goodwill is attributable mainly to the skills and technical talent of Intercept Rentals’ workforce, and the synergies expected to be achieved from integrating Intercept Rentals into the Company’s existing business.





The Company incurred acquisition-related costs of $23,183 in connection with this transaction which have been included in professional fees in the statement of comprehensive loss.




5. Trade and other receivables





December 31,

2012


December 31,

2011Trade receivables

$
215,244


$
-Sales tax receivable


16,730



79,408Loan receivable


18,255



17,355Total

$
250,229


$
96,763




The Company has an unsecured loan receivable of $15,000 that bears interest of 6% annually. The loan is repayable, principal and interest, in full, ten days after the Company provides the borrower with a written notice of demand. No demand has been made.




40





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




6. Licenses





December 31, 2012

Cost


Accumulated

Amortization


Impairment


Net Book

Value


Current

Portion


Long-term

PortionPowerMaster

$
102,408


$
853


$
101,555


$
-


$
-


$
-DryVac


402,670



10,417



392,253



-



-



-Total

$
505,078


$
11,270


$
493,808


$
-


$
-


$
-




December 31, 2011

Cost


Accumulated

Amortization


Impairment


Net Book Value


Current Portion


Long-term PortionPowerMaster

$
102,408


$
853


$
-


$
101,555


$
10,241


$
91,314DryVac


250,000



10,417



-



239,583



125,000



114,583Total

$
352,408


$
11,270


$
-


$
341,138


$
135,241


$
205,897




1)
On December 10, 2011, the Company signed a definitive Distribution/Dealer License Agreement with Inergy Plus Technologies Inc. (“Inergy Plus”). The agreement provides Global Green with the exclusive right to utilize Inergy Plus’ technologies for Canada including the right to license, sell, operate and provide warranty services. The primary technology is called the ReCyclone Advanced Gyroscopic Mill, also called the “PowerMaster.” The license to Global Green includes all current and future applications for the Power Master as registered with the United States Patent and Trademark office and all present and future intellectual property rights related to Inergy’s technologies during the 10 year term of the agreement.





Subsequent to the year, the Company entered into an agreement with Inergy Plus to end and transfer its exclusive license agreement.  The Company then transferred the exclusive license to 0 Waste 2 Energy Canada Ltd. (“0 Waste”) and 0 Waste agrees to pay the Company the sum of $150,000 payable in instalments on the sale of the first three units of the PowerMaster in the licensed area.  As the timing of the sale of the three units cannot be reasonably measured or the collection thereafter assured, the Company wrote-off the net book value of the PowerMaster licenses of $101,555 to $nil.





2)
On December 23, 2011, the Company signed a Distribution Agreement with I-Des Inc. and DryVac Services Canada Inc. (“I-Des and DryVac”). The Distribution Agreement gives Global Green the exclusive right to exploit the technologies developed and owned by I-Des and DryVac for a period of 2 years for all of Canada, in return for a onetime payment in the amount of $250,000. The Distribution Agreement allows for renewal of the term for an additional two (2) years provided that 60 days notice is given by the Company and that it is not in default with any terms of the agreement, one of which states that Global Green will sell a minimum of four (4) DryVac units per year.





On January 23, 2012, the Company signed an amendment to the Distribution Agreement to obtain additional rights to sell DryVac units in the State of Utah, USA.  In consideration of the additional territory, the Company has paid an additional distributor fee to I-Des and DryVac in the amount of US$150,000.





As the timing of the expected economic benefits of the licenses could not be reasonably determined, the licenses were amortized on a straight line basis determined by their terms.





As at December 31, 2012, the Company evaluated the business relationship with I-Des and DryVac and due to the lack of sale potential for these technologies in Canada, the Company decided to write off the net book of these licences of $392,253 to $nil.





41


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


7. Equipment





Computer


Rental Equipment


Vehicles


Leasehold

Improvements


TotalCostBalance, December 31, 2011

$
-


$
-


$
-


$
-


$
-On acquisition of Intercept Rentals


592



489,616



31,633



-



521,841Additions


1,796



849,818



146,424



1,488



999,526Balance, December 31, 2012

$
2,388


$
1,339,434


$
178,057


$
1,488


$
1,521,367DepreciationBalance, December 31, 2011

$
-


$
-


$
-


$
-


$
-Additions


349



142,816



24,560



232



167,957Balance, December 31, 2012

$
349


$
142,816


$
24,560


$
232


$
167,957Carrying amountsAt December 31, 2011

$
-


$
-


$
-


$
-


$
-At December 31, 2012

$
2,039


$
1,196,618


$
153,497


$
1,256


$
1,353,410





In fiscal 2010, the Company entered into three sales leaseback arrangements.  The lease amounts exceeded the original cost of the items by $20,872.  This gain was deferred and is recognized into income over the terms of the related leases.  For the year ended December 31, 2012, $5,352 was recognized in income.





8. Trade and other payables





December 31,

2012


December 31,

2011Trade payables

$
444,384


$
105,360Accrued liabilities


66,529



20,000Other payables


43,116



-Due to related party


1,044



3,963Total

$
555,073


$
129,323




9. Loans and borrowings





December 31,

2012


December 31,

2011Automotive loan payable

$
18,003


$
-Loans payable


754



13,174Notes payable


642,966



-Convertible debentures payable


153,000



144,500814,723



157,674Less: current portion


(807,006
)


(157,674
)$
7,717


$
-





The automotive loan payable is monthly installments of $857, non-interest bearing, maturing September 10, 2014.  Secured by the related automotive equipment having a net book value of $24,223.





The loans payable are unsecured, non-interest bearing and have no fixed terms of repayment.




42


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


9.            Loans and borrowings (cont’d)





The notes payable bear interest at 12% per annum and repayable in 10 days with written notice of demand.





The convertible debentures bear interest at 10% per annum and were due on December 15, 2004.  The debentures are convertible at the option of the debenture holder into fully paid, non-assessable common shares without par value in the capital of the Company at a conversion price in the range of $2.25 to $3.00 per common share.





10. Finance lease obligations





Finance lease obligations relate to rental equipment used in the Company’s rental operations.  Collateral consists of the related equipment and a general security agreement covering all present and after acquired equipment including intangibles, and the proceeds of sale on the secured equipment.  Finance lease obligations are payable as follows:





Future minimum lease payments

2012


Interest

2012


Principal value of minimum lease payments

2012Less than one year

$
13,005


$
315


$
12,690Between one and five years


-



-



-More than five years


-



-



-$
13,005


$
315


$
12,690




11. Share capital





Authorized share capital





Unlimited number of common voting shares and unlimited number of preferred non-voting shares





Issued share capital





At December 31, 2012, there were 80,966,462 issued and fully paid common shares (December 31, 2011 - 45,382,697).





Please refer to the Consolidated Statements of Changes in Equity for a summary of changes in share capital and contributed surplus for the year ended December 31, 2012.





Private placements and other share issuance





For the year ended December 31, 2012





1)
On February 8, 2012, the Company completed private placement financing of 13,143,765 units for gross proceeds of $1,182,939.   Each unit consists of one common share of the Company and one common share purchase warrant.  Each warrant entitled the holder to purchase one additional common share for a period of 18 months from the closing date at an exercise price of $0.18 per share.





The Company paid finder's fees and commissions totaling $63,590 cash and 706,564 finder's warrants. Each finder's warrant is exercisable at $0.18 into one common share of the Company for 18 months from the issuance date.





The fair value of the finders’ warrants, being $51,257 was determined using the Black-Scholes option pricing model weighted average assumptions with a volatility of 159%, average risk free interest rate of 1.09%, expected life of 1.5 years and a dividend rate of 0%.




43


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012


11.          Share capital (cont’d)





Private placements and other share issuance (cont’d)





For the year ended December 31, 2012 (cont’d)





2)
As described in Note 4, the Company acquired Intercept Rentals for a purchase price of $1,620,000, which was satisfied by the issuance of 12 million common shares of the Company with a fair value of $0.135 per share. As required by the purchase agreement, the Company’s common shares will be held in escrow pursuant to the terms of a voluntary share escrow agreement and released, as to 1/3 of such amount, on the 4, 8 and 12 month anniversaries of the closing date.





3)
On November 6, 2012, the Company completed a private placement financing of 5,440,000 units at a price of $0.05 per unit for gross proceeds of $272,000. Each unit consists of one share and one share purchase warrant, with each warrant exercisable to acquire an additional share for a period of 2 years from the closing date at a price of $0.15.





The Company paid finder's fees and commissions totaling $12,500 cash and 250,000 finder's warrants. Each finder's warrant is exercisable at $0.15 into one common share of the Company for 2 years from the issuance date.





The fair value of the finders’ warrants, being $8,219 was determined using the Black-Scholes option pricing model weighted average assumptions with a volatility of 145%, average risk free interest rate of 1.07%, expected life of 2 years and a dividend rate of 0%.





4)
On December 27, 2012, the Company completed a private placement financing of 5,000,000 units at a price of $0.05 per unit for gross proceeds of $250,000. Each unit consists of one share and one share purchase warrant, with each warrant exercisable to acquire an additional share for a period of 2 years from the closing date at a price of $0.15.





The Company paid finder's fees and commissions totaling $22,500 cash and 450,000 finder's warrants. Each finder's warrant is exercisable at $0.15 into one common share of the Company for 2 years from the issuance date.





The fair value of the finders’ warrants, being $8,645 was determined using the Black-Scholes option pricing model weighted average assumptions with a volatility of 120%, average risk free interest rate of 1.12%, expected life of 2 years and a dividend rate of 0%.





For the year ended December 31, 2011





1)
On December 5, 2011, the Company completed a non-brokered private placement consisting of 20,000,000 common shares at a price of $0.05 per share for gross proceeds of $1,000,000.  All securities issued in connection with the private placement are subject to a four-month hold period.  Finders received aggregate fees in the amount of $57,138.





2)
On December 12, 2011, the Company settled outstanding indebtedness of $232,855 through the issuance of common shares at deemed prices of $0.05625 per common share. The outstanding debt is comprised of management fees and consulting fees.  A total of 4,139,644 common shares were issued pursuant to the debt settlement.




44





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




11.          Share capital (cont’d)





Warrants





Warrant transactions and the number of warrants outstanding are summarized as follows:





Number of

Warrants


Weighted

Average

Exercise

Price

Expiry

DateBalance, December 31, 2011


15,398,333


$
0.20

July 13, 2013Issued on private placement


7,831,569



0.18

July24, 2014Issued on private placement


6,018,761



0.18

August 8, 2014Issued on private placement


1,480,000



0.15

September 20, 2014Issued on private placement


4,210,000



0.15

November 6, 2014Issued on private placement


3,250,000



0.15

December 14, 2014Issued on private placement


2,200,000



0.15

December 27, 2014Balance, December 31, 2012


40,388,663


$
0.18




During the year ended December 31, 2012, the Company announced that 15,398,333 common share purchase warrants, exercisable at $0.20 per share, and having an original expiry date of July 13, 2012, have been extended by one year and will now expire on July 13, 2013.  These warrants were originally issued July 13, 2010.  All other terms and conditions of these warrants remain the same.





12. Share-based payments





Contributed surplus





Contributed surplus relate to stock options and compensatory warrants that have been issued by the Company.





Stock options





The Company follows the policies of the TSX Venture Exchange, under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common shares of the Company.  The exercise price of each option equals the market price of the Company’s common shares as calculated on the date of grant.  The options can be granted for a maximum term of 5 years.  The vesting period for all options is at the discretion of the board of directors.





On December 5, 2012, management granted 500,000 share options to a consultant.  Each option allows the optionee to purchase a common share of the Company for $0.15 for the next 5 years.  83,334 of the options vested by December 31, 2012 and using a Black-Scholes pricing model, $3,726 was recorded in the accounts as share-based payments expense with a corresponding increase to contributed surplus.  The calculation was calculated based on the following assumptions:




Expected life
5 yearsRisk free interest rate
1.04%Expected volatility
165.36%





Accordingly, as of December 31, 2012 there were 500,000 stock options outstanding and 83,334 were exercisable.  As at December 31, 2011, there were no stock options outstanding.





45


GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012
 
 13. Basic and diluted loss per share





The calculation of basic and diluted loss per share for the year ended December 31, 2012 was based on the loss attributable to common shareholders of $1,728,041 (2011 - $552,855) and the weighted average number of common shares outstanding of 68,038,758 (2011 - 23,574,760).





Diluted loss per share did not include the effect of 40,388,663 share purchase warrants and 500,000 stock options.





14. Related party transactions





Key management personnel compensation





Years endedDecember 31,

2012


December 31,

2011Short-term employee benefits - management

$
120,000


$
150,000Office rent


3,800



6,000$
123,800


$
156,000




The amounts charged to the Company for the services provided have been determined by negotiation among the parties and, in certain cases, are covered by signed agreements.





Related party balances





The following amounts due to related party are included in trade and other payables:





December 31,

2012


December 31,

2011Officer of the Company

$
1,044


$
3,963





These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.





15. Management of capital





The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to pursue new environmentally sound methods and technologies in recycling. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.





The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue new environmentally sound methods and technologies in recycling and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes its components of equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or adjust the amount of cash.





At this stage of the Company’s development, in order to maximize ongoing development efforts, the Company does not pay out dividends.  Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.




46





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




15. Management of capital (cont’d)





There were no changes in the Company’s approach to capital management during the year ended December 31, 2012.  The Company is not subject to externally imposed capital requirements.





16. Financial risk management





International Financial Reporting Standards 7, Financial Instruments: Disclosures, establishes a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:





Level 1    -     quoted prices (unadjusted) in active markets for identical assets or liabilities;





Level 2    -     inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and





Level 3    -     inputs for the asset or liability that are not based on observable market data (unobservable inputs).





Cash is classified as Level 1.





As at December 31, 2012, the carrying values of cash, trade and other receivables, trade and other payables, and loans and borrowings approximate their fair values due to their short terms to maturity.





Financial risks





The Company has exposure to the following risks from its use of financial instruments:


·
Credit risk


·
Liquidity risk


·
Market risk





Credit risk





The Company's credit risk is primarily attributable to cash and trade and other receivables. The Company has no significant concentration of credit risk arising from operations. Cash consists of chequing account at reputable financial institution, from which management believes the risk of loss to be remote. Federal deposit insurance covers balances up to $100,000 in Canada. Financial instruments included in trade and other receivables mainly consist of trade receivables, and amounts due from government agencies. The Company limits its exposure to credit loss for cash by placing its cash with high quality financial institution and for trade and other receivables by standard credit checks.  At December 31, 2012, the Company’s exposure to credit risk is minimal





Liquidity risk





Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash.





As at December 31, 2012, the Company had a cash balance of $40,887 (2011 - $680,972) to settle current liabilities of $1,375,839 (2011 - $286,997).





Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements and loans from related and other parties. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.




47





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




16.           Financial risk management (cont’d)





Market risk





Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.





a)
Interestrisk





The Company has cash balances and interest-bearing loans payable.  The Company’s current policy is to invest excess cash in investment-grade short-term deposit certificates issued by its banking institutions.  The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.  As of December 31, 2012, the Company did not have any investments in investment-grade short-term deposit certificates. The Company’s loans payable bear interest at fixed interest rates, and as such, the Company is not exposed to interest rate risk on its loans payable.





b)
Foreign currency risk





The Company does not have any balances denominated in a foreign currency and believes it has no significant foreign currency risk.





c)
Price risk





The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.




17. Commitments





The Company has entered into operating lease commitment for premises as follows:




2013

$
79,4562014


79,4562015


79,4562016


79,4562017


72,835Total

$
390,659
  48





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




18. Income taxes





a)      A reconciliation of current income taxes at statutory rates with the reported taxes is as follows:





2012


2011Loss before income taxes

$
(1,728,041
)

$
(552,855
)Effective tax rate


25
%


26.5
%Income tax recovery at statutory rates

$
(432,010
)

$
(146,507
)Impact of permanent differences


116,523



-Impact of future income tax rates applied versus current statutory rate


119,067



143,786Change in unrecognized deductible temporary differences


43,327



-Unrecognized benefits of non-capital losses


(72,830
)


-Change in valuation allowance


225,923



2,721Total income taxes

$
-


$
-





b)      Details of unrecognized deferred income tax assets are as follows:





2012


2011Deferred income tax assets:Non-capital loss carry forwards

$
2,050,141


$
1,887,767Capital losses carry forward


154,629



163,907Difference between tax value and book value of equipment


78,994



25,883Share issuance costs


19,716



-Valuation allowance


(2,303,480
)


(2,077,557
)$
-


$
-




The Company has non-capital losses of approximately $8,200,564 which may be carried forward and applied against taxable income in future years. These losses, if unutilized, will expire through to 2032. The Company has taxable capital losses of approximately $618,516 which may be applied in future years against taxable capital gains. The ability to apply these losses has no expiration date.





19. Supplemental disclosure with respect to cash flows





Years EndedDecember 31,

2012


December 31,

2011Cash paid for income taxes

$
-


$
-Cash paid for interest

$
22,607


$
9,528





Significant non-cash financing and investing transactions during the year ended December 31, 2012 were as follows:





i)
the Company acquired all of the issued and outstanding shares of 1503826 Alberta Ltd., carrying on business as "Intercept Rentals", for a purchase price of $1,620,000, which was satisfied by the issuance of 12 million common shares of the Company with a fair value of $0.135 per share (note 4).




49





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012




20. Supplemental disclosure with respect to cash flows (cont’d)





Significant non-cash financing and investing transactions during the year ended December 31, 2011 were as follows:





i)
the Company settled outstanding indebtedness of $232,855 through the issuance of common shares at a deemed prices of $0.05625 per common share. The outstanding debt is comprised of management fees and consulting fees.  Of those amounts, $115,000 was expensed in 2011.





21. Subsequent events





1)
On January 7, 2013, the Company granted 2,600,000 stock options at a price of $0.10 per common share to directors, officers and consultants of the Company. Each option grant will vest quarterly. As per the Company's Stock Option Plan, the options granted are exercisable until January 7, 2017.





2)
On February 15, 2013, the Company completed a non-brokered private placement for a total of 3,400,000 units representing gross proceeds of $170,000. Each unit consists of one share and one share purchase warrant, with each warrant exercisable to acquire an additional share until four months from the closing date. The warrants are subject to an accelerated expiry stating that if at any time, after the standard 4 month hold period, the closing price of the Company’s common shares on the TSX Venture Exchange exceeds $0.25 for any 10 consecutive trading days, the warrant holder will be given notice that the warrants will expire 31 days following the date of such notice.





The Company also paid a finder’s fee of $7,500 cash and 150,000 finder’s warrants holding the same terms as stated above.





3)
On February 28, 2013, the Company entered into an agreement with Inergy Plus Technologies Inc. (“IPT”) whereby the Company agreed to end and transfer its exclusive license agreement to use and market the PowerMaster technology and equipment it signed with IPT dated December 10, 2011.





The Company agreed to transfer the exclusive license on the condition that IPT give substantially the same license to 0 Waste 2 Energy Canada Ltd. (“0 Waste”). The Company also signed an agreement dated February 26, 2013 with 0 Waste whereby 0 Waste agrees to use its best efforts to market the PowerMaster technology in Canada and further agrees to pay the Company the sum of $150,000 payable in instalments on the sale of the first three units of the PowerMaster in the licensed area.





4)
On March 28, 2013, the Company granted 200,000 options at a price of 0.10 per share to a consultant of the Company. The option grant will vest quarterly. As per the Company's Stock Option Plan, the options granted are exercisable until March 5, 2017.





5)
On April 17, 2013, the Company completed a private placement for the sale of convertible debentures for gross proceeds of $445,000. The debenture will bear interest at a rate of 12.00% per annum, payable semi-annually from the closing date and will also contain an override royalty of 2.00% per annum on the gross revenue earned by the new units, payable semi-annually from the closing date. The debentures will be convertible into common shares of the Company at a price of: $0.50 for the first twelve months; $1.00 for the second twelve months; and $1.50 after the first twenty-four months commencing on the closing date. A finder’s fee of $20,000 cash may be paid on receipt of TSX-V approval.




50





GLOBAL GREEN MATRIX CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian dollars)

December 31, 2012





21.           Subsequent events (cont’d)





6)
On April 24, 2013, the Company announced a non-brokered private placement offering of up to 12,000,000 units of the Company (“Units”) at a price of $0.191667 per Unit for gross proceeds of up to $2.3 million.  The Company will use the net proceeds of the offering to purchase, indirectly through its wholly-owned subsidiary, three new frac water heating units (“Heating Units”) and for general working capital purposes.





Each Unit will consist of one common share (“Common Share”) and a pro rata portion of a royalty (the “Royalty Entitlement. The pro rata amount of the Royalty Entitlement that each subscriber will receive will be based on their subscription amount as compared with the maximum size of the offering of $2.3 million.  The aggregate Royalty Entitlement payable to all subscribers under the offering, assuming the maximum proceeds of $2.3 million are raised, will be a 10% gross revenue royalty in respect of revenues generated by the three Heating Units for a period of five years from the purchase of such Heating Units, payable quarterly in arrears.  Based on historical experience of revenues from existing heating units, the Corporation estimates that the net present value of the aggregate Royalty Entitlement, discounted at 15%, is $1,215,994 assuming 5% year over year growth in revenues, $1,326,198  assuming 10% year over year growth and $1,446,641 assuming 15% year over year growth.  The payment of the Royalty Entitlement will be secured by a security interest in the Heating Units granted in favour of the subscribers.





The Corporation has agreed to pay a finder’s fee of up to 4.35% of the gross proceeds of the offering to an unrelated third party.  In addition, the unrelated third party will receive Common Shares in an amount equal to 16.667% of the number of Units sold under the offering, issued a deemed price of $0.191667 per share.





51





ITEM 19. EXHIBITS





Number12.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
Certification of Chief Executive Officer pursuant to 18 U.S.C section 135013.2
Certification of Chief Financial Officer pursuant to 18 U.S.C section 135015.1
Consent of accountants pursuant to Item 10.G





52





SIGNATURE





The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.




Global Green Matrix Corp.

(formerly Poly-Pacific International Inc.)By:Date

Name and Signature

TitleMay 11, 2013

/s/Randy HaywardRandy Hayward

President