UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 

 FORM 10-Q

 

S QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2013

 

£ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______ to _______

 

Commission File Number 000-54326

 

HONDO MINERALS CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada		26-1240056
(State of incorporation)		(I.R.S. Employer Identification No.)

 

15303 N. Dallas Parkway, Suite 1050

Addison, Texas 75001

(Address of principal executive offices)

 

(214) 444-7444

(Registrant’s telephone number)

 

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.

S Yes   £ No

 

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). S Yes  £ No (Not required)

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

	Large Accelerated Filer	£		Accelerated Filer	£
	Non-Accelerated Filer	£		Smaller Reporting Company	S

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). £ Yes  S No

 

As of May 30, 2013, there were 137,771,634 shares of the registrant’s $0.001 par value common stock issued and outstanding.

 

 

 

HONDO MINERALS CORPORATION

 

TABLE OF CONTENTS

 

				Page
PART I.		FINANCIAL INFORMATION
ITEM 1.		FINANCIAL STATEMENTS		F-1
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		8
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		12
ITEM 4.		CONTROLS AND PROCEDURES		12
PART II.		OTHER INFORMATION
ITEM 1.		LEGAL PROCEEDINGS		13
ITEM 1A.		RISK FACTORS		14
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		14
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES		15
ITEM 4.		MINE SAFETY DISCLOSURES		15
ITEM 5.		OTHER INFORMATION		15
ITEM 6.		EXHIBITS		16

 

Special Note Regarding Forward-Looking Statements

 

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Hondo Minerals Corporation (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

 

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words “we,” “our,” “us,” the “Company,” or “HMNC” refers to Hondo Minerals Corporation.

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

INDEX		F-1
Unaudited Consolidated Balance Sheet as of April 30, 2013 and Audited Consolidated Balance Sheet as of July 31, 2012, as restated.		F-2
Unaudited Consolidated Statement of Operations for the Three and Nine Months Ended April 30, 2013 and 2012.		F-3
Unaudited Consolidated Statement of Cash Flows for the Nine Months Ended April 30, 2013 and 2012		F-4
Notes to Consolidated Financial Statements Unaudited		F-5

 

 

HONDO MINERALS CORPORATION

CONSOLIDATED BALANCE SHEETS

 

		April 30,				July 31,
		2013				2012
		(unaudited)				(audited)
						(Restated)
ASSETS
Current Assets:
Cash and cash equivalents		$	5,461			$	22,118
Prepaid interest			804,417				—
Other current assets			39,950				32,402
Total Current Assets			849,828				54,520
Properties, Equipment, and Buildings:
Vehicles			67,183				67,183
Office equipment			226,986				226,986
Mining equipment			4,255,322				6,249,238
Plant and buildings			4,896,772				4,904,272
Land and mineral properties, net of $920,000 allowance for impairment			2,574,318				2,574,318
Accumulated depreciation			(70,103	)			(37,213	)
Total Properties, Equipment, and Buildings			11,950,478				13,984,784
Other Assets			9,994				9,994
TOTAL ASSETS		$	12,810,300			$	14,049,298
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Cash overdraft		$	111,743			$	—
Senior loan payable, net of $403,071 debt discount at July 31, 2012			1,250,000				846,929
Promissory notes payable			1,745,000				125,000
Notes payable - related party			247,306				21,686
Accounts payable and accrued liabilities			431,738				112,531
Accounts payable - related parties			—				101,263
Total Current Liabilities			3,785,787				1,207,409
Common Stock Liability			1,668,554				1,668,554
Derivative Liability			3,227,787				949,110
Total Liabilities			8,682,128				3,825,073
Shareholders’ Equity:
Common Stock, $0.001 par value, 200,000,000 shares authorized 129,977,001 and 82,546,170 shares issued and outstanding at April 30, 2013 and July 31, 2012, respectively			129,977				82,546
Additional paid-in capital			25,141,663				20,969,828
Treasury stock, at cost			(12,921	)			(12,921	)
Accumulated (deficit)			(21,130,547	)			(10,815,228	)
Total Shareholders’ Equity			4,128,172				10,224,225
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	12,810,300			$	14,049,298

 

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

 

 

HONDO MINERALS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Nine Months ended April 30, 2013 and 2012

(Unaudited)

 

		Three Months				Three Months				Nine Months				Nine Months
		Ended				Ended				Ended				Ended
		April 30, 2013				April 30, 2012				April 30, 2013				April 30, 2012
Cost of Revenue		$	(302,846	)		$	—			$	(1,494,037	)		$	—
Gross Loss			(302,846	)			—				(1,494,037	)			—
Operating Expenses
Officers’ and directors’ fees			112,500				149,300				690,250			$	775,250
Professional fees			745,005				161,439				2,477,054				470,531
Derivative expense			1,581,078				—				2,278,677				—
Corporate general and administrative			102,829				245,577				606,386				1,133,920
Total Operating Expenses			(2,541,412	)			(556,316	)			(6,052,367	)			(2,379,701	)
(Loss) from Operation			(2,844,258	)			(556,316	)			(7,546,404	)			(2,379,701	)
Other (Expense)
Loss on sale of equipment			(2,000	)			—				(1,539,771	)			—
Interest expense			(411,811	)			—				(1,229,144	)			—
Net (Loss)		$	(3,258,069	)		$	(556,316	)		$	(10,315,319	)		$	(2,379,701	)
(Loss) per share
Basic and fully diluted:
Weighted average number Of shares outstanding			109,103,217				67,259,290				95,837,056				63,250,940
(Loss) per share		$	(0.03	)		$	(0.01	)		$	(0.11	)		$	(0.04	)

 

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

 

 

HONDO MINERALS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended April 30, 2013 and 2012

(Unaudited) 

 

		2013				2012
Cash flows from operating activities:
Net (loss)		$	(10,315,319	)		$	(2,379,701	)
Adjustments to reconcile net (loss) to net cash used in operating activities:
Depreciation expense			32,890				26,250
Loss on sale of mining equipment			1,539,771				—
Common stock issued for services			3,152,370				278,050
Common stock issued for officers’ and directors’ fees			627,750				775,250
Warrants granted for services			446,646				—
Amortization of debt discount			403,071				—
Derivative expense			2,278,677				—
Changes in current assets and liabilities:
Prepaid interest			(804,417	)			—
Other current assets			(7,548	)			29,207
Accounts payable and accrued liabilities			319,207				(272,318	)
Accounts payable - related parties			(101,263	)			152,777
Net cash (used) in operating activities			(2,428,165	)			(1,390,485	)
Cash flows from investing activities:
Purchase of office equipment			—				(156,487	)
Purchase of mining equipment			(1,855	)			(2,021,480	)
Purchase of buildings			—				(2,204,976	)
Purchase of land and mining properties			—				(296,705	)
Proceeds from sale of mining equipment			456,000				—
Deposit on office space			—				(9,894	)
Net cash (used) in investing activities			454,145				(4,689,542	)
Cash flows from financing activities
Cash overdraft			111,743				—
Proceeds from promissory notes			1,620,000				1,000,000
Proceeds from notes payable - related party			329,789				—
Payments on note payable - related party			(104,169	)			—
Sale of common stock			—				3,787,454
Net cash provided by financing activities			1,957,363				4,787,454
Net (decrease) in cash and cash equivalents			(16,657	)			(1,292,573	)
Cash and cash equivalents, beginning of period			22,118				2,052,048
Cash and cash equivalents, end of period		$	5,461			$	759,475

 

(Continued on F-5)

 

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

 

 

HONDO MINERALS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended April 30, 2013 and 2012

(Unaudited)

(CONTINUED) 

 

		2013				2012
Supplemental cash flow disclosures:
Cash paid during the period for:
Interest		$	135,093			$	—
Income Taxes		$	—			$	—
Non-cash investing and financing activities:
Common stock (rescinded) issued for buildings		$	7,500			$	365,750
Acquisition of buildings			(7,500	)			(365,750	)
Common stock issued for settlement of claims			19,825				—
Decrease in paid in capital due to settlement of claims			(19,825	)			—
Shares issued as part of raising capital			—				2,262
Decrease in additional paid in capital for shares issued as part of raising capital			—				(2,262	)
Valuation of warrants associated to debt			—				(415,856	)
Issuance of warrants associated to debt			—				415,856
		$	—			$	—

 

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

 

 

Hondo Minerals Corporation

Notes to Consolidated Financial Statements

April 30, 2013

(Unaudited)

 

Note 1 – Organization and Business Activity

 

Hondo Minerals Corporation, formerly Tycore Ventures Inc. (“Tycore”) was incorporated in the State of Nevada on September 25, 2007 to engage in the acquisition, exploration and development of natural resource properties. On February 22, 2011, Tycore changed its name to Hondo Minerals Corporation (“Hondo” or the “Company”).

 

On February 8, 2011, the two controlling shareholders of Tycore and Hondo Minerals, Inc. (“HMI”) entered into an agreement to merge the two companies into a single entity. By agreement, Tycore exchanged 17,783,888 shares of its common stock for all of the issued and outstanding common shares of Hondo. At the time of the merger the two controlling shareholders owned 71.4% of Tycore and 58.0% of HMI. Due to the common control, the historical basis of accounting of each company was maintained and the accompanying financial statements and historical accounting information represents combined amounts.

 

The Company is engaged in the acquisition of mines, mining claims and mining real estate in the United States with mineral reserves consisting of precious metals or non-ferrous metals. Since early 2010, HMI has been building and developing a plant designed to process precious and base metals in the Tennessee and Schuylkill Mines in the Wallapai Mining District near Chloride, Mohave County, Arizona. The Company’s main focus is the processing of the tailings pile at the mouth of the Tennessee Mine which includes approximately a one million ton tailings pile containing various amounts of lead, zinc, gold, silver, and other concentrations of metal and is adjacent to the Schuylkill Mine. Hondo also owns various mining claims in Colorado and Utah but none are operational as of April 30, 2013.

 

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report filed with the SEC on 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim period is not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements that would substantially duplicate the disclosure contained in the audited consolidated financial statements for the year ended July 31, 2012, as reported in the Form 10-K, have been omitted.

 

There financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has limited cash and, as yet, has not generated any revenues, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from investors and/or issuance of common shares.

 

Note 2 – Promissory Notes Payable

 

Since July 31, 2012, the Company has executed promissory notes totaling $1,620,000. The notes carry an interest rate of 10% (ten percent) and are due on various dates from August 31, 2013 through December 31, 2013 with interest payments due quarterly. 19,500,000 common shares valued at $2,661,500 and warrants to purchase 4,200,000 common shares valued at $446,646 were issued related to these notes for consulting services, origination fees, and interest.

 

 

Note 3 – Restatement

 

The balance sheet as of July 31, 2012 presented in these financial statements has been restated to report the common shares issued in the settlement of a lawsuit as common stock liability and to record derivative expense.

 

In April 2012, the Company’s Board of Directors’ approved the settlement of a lawsuit through the issuance of the Company’s common stock pursuant to nonpayment of certain accounts payable and purchase obligations that the Company made in early 2012. These obligations amounted to $1,668,554. The number of shares to be issued for the obligation is to be determined through a “calculation period” determined through a calculation of volume of shares traded and 80% of the daily average share price. This pricing period continues from the issuance date of April 26, 2012 until the Company’s aggregate trading volume of its common stock reaches $5,000,000. As of April 30, 2013, the Company has issued 31,541,211 shares of the Company’s common stock and the Company’s trading volume for the “calculation period” approximated $5,000,000. The Company did not anticipate owing any additional shares as of April 30, 2013. The $1,668,554 obligation has been recorded as common stock liability and will remain a liability until such time as the exact number of common shares to be issued is determined. The conversion of the liability is at a discount to the current market value. The derivative liability was revalued at April 30, 2013 using an estimated number of shares due on the obligation at the current market rate using the Black-Scholes Merton valuation method.

 

Additional derivative expense of $2,278,677 was recorded for the nine-month period ending on April 30, 2013. The derivative liability/expense will change as the market value of the Company’s common stock changes. The derivative expense was valued using the Black-Scholes-Merton valuation model using a volatility rate of 132.93% and a risk free rate of return of .11%.

 

Note 4 – Acquisition Offer

 

In February 2013, Hondo Minerals received an unsolicited offer from Crowncorp Investment Corporation, a Texas corporation (“Purchaser”) to purchase HMNC’s wholly owned subsidiary, Hondo Minerals, Inc., which holds 100% of the HMNC’s assets. The offer as presented was for an aggregate all cash purchase price of $88,000,000. The unsolicited offer for the outstanding shares of HMNC has not yet commenced.

 

Note 5 – Subsequent Event

 

On May 2, 2013, Hondo Minerals announced that the Company has entered into a binding Letter of Intent with Crowncorp Investments Corporation, a Texas corporation (“Purchaser”), for the sale of 100% of the Company’s assets and issued and outstanding stock for a purchase price of $88 million, which includes $13 million in working capital to be retained in the Company post-closing.

 

As conditions to the consummation of the Acquisition, the Company and Crowncorp intend to execute: (i) a definitive operating agreement which shall transfer management and control of Hondo’s assets and operations to Crowncorp; and (ii) a tender offer pursuant to which Crowncorp shall purchase all of the Company’s issued and outstanding stock from the Company’s shareholders in accordance with all appropriate laws and regulations and commercially acceptable practices and procedures.

 

In the event that the Acquisition does not close within six (6) months after the execution of the Letter of Intent, or if Acquirer fails to provide the purchase price in accordance with the schedule set forth in the Letter of Intent, or if Crowncorp otherwise repudiates its obligations under the Letter of Intent, the Company shall be entitled to receive from Crowncorp a breakup fee of $2,000,000.

 

Further, the Parties have agreed to a “no-shop period” during which the Company shall not solicit nor accept any competing offers to be made by a third party for the acquisition of the Company unless the Letter of Intent is terminated.

 

On May 10, 2013 Hondo Minerals Corporation announced that Crowncorp Investments Corporation, a Texas Corporation, delivered a $10 Million USD bank instrument to be redeemed in order to satisfy the obligations of Crowncorp as required under the terms of the binding Letter of Intent for the sale/purchase of 100% of Hondo’s assets and stock for approximately $88 Million dollars.

 

Both Hondo and Crowncorp intend to execute: (i) a definitive operating agreement which shall transfer management and control of Hondo’s assets and operations to Crowncorp; and (ii) a tender offer pursuant to which Crowncorp shall purchase all of Hondo’s issued and outstanding stock in accordance with all appropriate laws and regulations and commercially acceptable practices and procedures.

 

END OF NOTES TO FINANCIALS

 

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

 

FORWARD-LOOKING STATEMENTS

 

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

 

GENERAL

 

Corporate History

 

Hondo Minerals Corporation, formerly Tycore Ventures Inc. (“Tycore”) was incorporated in the State of Nevada on September 25, 2007 to engage in the acquisition, exploration and development of natural resource properties. On February 22, 2011, Tycore changed its name to Hondo Minerals Corporation (“Hondo” or the “Company”).

 

On February 8, 2011, the two controlling shareholders of Tycore and Hondo Minerals, Inc. (“HMI”) entered into an agreement to merge the two companies into a single entity. By agreement, Tycore exchanged 17,783,888 shares of its common stock for all of the issued and outstanding common shares of Hondo. At the time of the merger the two controlling shareholders owned 71.4% of Tycore and 58.0% of HMI.

 

Business Overview

 

The Company is engaged in the acquisition of mines, mining claims and mining real estate in the United States with mineral reserves consisting of precious metals or non-ferrous metals. Since early 2010, HMI has been building and developing a plant designed to process precious and base metals in the Tennessee and Schuylkill Mines in the Wallapai Mining District near Chloride, Mohave County, Arizona. The Company’s main focus is the processing of the tailings pile at the mouth of the Tennessee Mine which includes approximately a one million ton tailings pile containing various amounts of lead, zinc, gold, silver, and other concentrations of metal and is adjacent to the Schuylkill Mine. Hondo also owns various mining claims in Colorado and Utah but none are operational as of April 30, 2013.

 

In mid-July 2012, the Company began processing tailings; however, the Company has yet to realize any revenues from those operations.

 

RESULTS OF OPERATIONS

 

Working Capital

 

		April 30, 2013				July 31, 2012
Current Assets		$	849,828			$	54,520
Current Liabilities		$	3,785,787			$	1,207,409
Working Capital (Deficit)		$	(21,130,547	)		$	(10,815,228	)

 

 

Operating Expenses and Net Loss

 

Operating expenses for the three month period ended April 30, 2013 were $2,541,412 and is comprised of officer and director fees, professional fees, derivative expense, and corporate general and administrative expenses. Operating expenses for the three month period ended April 30, 2012 were $556,316 and comprised of officer and director fees, professional fees and, corporate general and administrative expenses.

 

Net loss for the three month period ended April 30, 2013 was $(3,258,069) compared to net loss of $(556,316) for the three month period ended April 30, 2012.

 

Operating expenses for the nine month period ended April 30, 2013 was $6,052,367 and is comprised of officer and director fees, professional fees, derivative expense, and corporate general and administrative expenses. Operating expenses for the nine month period ended April 30, 2012 were $2,379,701 and comprised of officer and director fees, professional fees and, corporate general and administrative expenses.

 

Net loss for the nine month period ended April 30, 2013 was $(10,315,319) compared to net loss of $(2,379,701) for the nine month period ended April 30, 2012.

 

Liquidity and Capital Resources

 

At April 30, 2013, the Company’s cash balance was $5,461 compared to $22,118 as at July 31, 2012. The decrease in cash is attributed to operating and investing activities exceeding financing activities.

 

We may need to raise funds in the future to fund possible acquisitions or further production. Additional funding will likely come from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise additional funding from the sale of our common stock. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.

 

Cashflow from Operating Activities

 

During the nine month period ended April 30, 2013, the Company used $(2,428,165) of cash for operating activities compared to the use of $(1,390,485) of cash for operating activities during the nine month period ended April 30, 2012.

 

Cashflow from Investing Activities

 

During the nine month period ended April 30, 2013, the Company provided $454,145 of cash for investing activities compared to the use of $(4,689,542) of cash for investing activities during the period ended April 30, 2012.

 

Cashflow from Financing Activities

 

During the nine month period ended April 30, 2013 the Company received $1,957,363 of cash from financing activities compared to $4,787,454 for the period ended April 30, 2012. The change in cash flows from financing activities is attributed to sale of common stock.

 

Cashflow Net Increase (decrease) in Cash During Period

 

During the nine month period ended April 30, 2013, the Company had a Net (decrease) of $(16,657) compared to $(1,292,573) during the period ended April 30, 2012.

 

Quarterly Developments

 

On February 4, 2013, the Arizona Department of Environmental Quality (“ADEQ”) issued a Permit Determination Letter to Hondo Minerals Corporation, a Nevada corporation (the “Company”), to advise the Company that its Tennessee Mine facility located in the Wallapai Mining District near Chloride, Mohave County, Arizona is not subject to any standards or other requirements under Sections 111 or 112 of the Clean Air Act, does not have the potential to emit air pollutants above significance levels, and does not require an Air Quality Control Permit.

 

 

 

Additionally, on February 7, 2013, the ADEQ issued a letter to the Company to announce that it has closed the Notice of Violation (“NOV”) issued to the Company on June 11, 2012 and will not proceed with any further action against the Company in regards to this matter.

 

On February 20, 2013 the Board of Directors, in accordance with its fiduciary obligations to its shareholders, continues to review and negotiate the terms of the unsolicited offer from Crowncorp Investment Corporation to purchase all of the assets of the Company's wholly owned subsidiary, Hondo Minerals, Inc., which holds 100% of the Company's assets, in exchange for $75 million in cash. To that end, the Company has engaged independent legal counsel to assist with its review, consideration and structuring of the proposed transaction.

 

On April 25, 2013, the Company entered into a Letter of Intent with Crowncorp Investments Corporation, a Texas Corporation (“Crowncorp”). Pursuant to the terms and conditions of the LOI, Crowncorp shall acquire all of the assets and the issued and outstanding shares of the Company’s common stock (collectively, the “Acquisition”) in exchange for an aggregate all cash purchase price of eighty eight million dollars ($88,000,000) (the “Purchase Price”), contingent upon: (i) the consummation of a tender offer to purchase all of the issued and outstanding shares of HMNC from the Company’s shareholders (the “Tender Offer”); and (ii) the execution of a definitive operating agreement transferring management and control of all of HMNC’s assets and operations to Crowncorp (the “Definitive Operating Agreement”). The Purchase Price is payable as follows: (i) Crowncorp shall provide $1,600,000 to the Company by no later than May 10, 2013; (ii) Crowncorp shall provide $1,600,000 to the Company by no later than May 31, 2013; (iii) Crowncorp shall provide $2,800,000 to the Company upon the consummation of the Definitive Operating Agreement by no later than May 31, 2013; and (iv) upon consummation of the Tender Offer, Crowncorp shall provide: (a) $69,000,000 to the shareholders of HMNC plus the balance of funds remaining after satisfaction of certain debts of the Company (as defined in the LOI); and (b) $13,000,000 to HMNC. In the event that the Acquisition does not close within six (6) months after the execution of the LOI, or if Crowncorp fails to provide the Purchase Price in accordance with the schedule set forth in the LOI, or if Crowncorp otherwise repudiates its obligations under the LOI: (i) Crowncorp shall pay to HMNC a break-up fee of $2,000,000 (the “Break-Up Fee”); and (ii) any amounts paid by Crowncorp pursuant to the LOI shall be deemed a “Senior Secured Loan” from Crowncorp to HMNC in the total amount equal to any amounts paid to HMNC minus the Break-Up Fee.

 

Subsequent Developments

 

 On May 10, 2013, the Company issued a Press Release regarding the delivery of a $10 Million USD bank instrument to the Company by Crowncorp Investments Corporation (“Crowncorp”) in support of Crowncorp’s obligations under the Letter of Intent entered into by and between the Company and Crowncorp on April 25, 2013 for the sale/purchase of 100% of Hondo’s assets and stock. A copy of the Press Release was filed with the Commission as an exhibit to Form 8-K file May 14, 2013.

 

Going Concern

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

 

Future Financings

 

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

 

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

Recently Issued Accounting Pronouncements

 

In March 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-11 (“ASU No. 2010-11”), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.” The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of provisions of ASU No. 2010-11 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

In February 2010, the FASB issued ASU 2010-10 (“ASU No. 2010-10”), “Consolidation (Topic 810): Amendments for Certain Investment Funds.” The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU No. 2010-10 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

In February 2010, the FASB issued ASU 2010-09 (“ASU No. 2010-09”), “Subsequent Events (ASC Topic 855): Amendments to Certain Recognition and Disclosure Requirements.” ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The Company’s adoption of provisions of ASU No. 2010-09 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

In January 2010, the FASB issued ASU 2010-06 (“ASU No. 2010-06”), “Improving Disclosures about Fair Value Measurements.” ASU No. 2010-06 amends FASB Accounting Standards Codification (“ASC”) 820 and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements and employers’ disclosures about postretirement benefit plan assets. This ASU is effective for interim and annual reporting periods beginning after December 15, 2009. The Company’s adoption of provisions of ASU No. 2010-06 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

In January 2010, the FASB issued an amendment to ASC Topic 505, “Equity”, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The Company’s adoption of the amendment to ASC Topic 505 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

In January 2010, the FASB issued an amendment to ASC Topic 820, “Fair Value Measurements and Disclosure”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Company’s adoption of the amendment to ASC Topic 820 did not have a material effect on the financial position, results of operations or cash flows of the Company.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Our exposure to market risks includes, but is not limited to, the following risks: changes in commodity price risks and equity price risks. We do not use derivative financial instruments as part of an overall strategy to manage market risk.

 

Equity Price Risk

 

We have in the past sought and will likely in the future seek to acquire additional funding by sale of common stock and other equity instruments. Movements in the price of our common stock have been volatile in the past and may also be volatile in the future. As a result, there is a risk that we may not be able to sell common stock or other equity at an acceptable price to meet future funding requirements.

 

Commodity Price Risk

 

We currently have only limited production but have yet to make a sale. In the future, we expect to produce increasing amounts of gold, silver, other precious and base metals in the upcoming fiscal year. As we increase production and sales, changes in the price of gold and other minerals could significantly affect our results of operations and cash flows.

 

Gold prices may fluctuate widely from time to time and are affected by numerous factors, including the following: expectations with respect to the rate of inflation, exchange rates, interest rates, global and regional political and economic circumstances and governmental policies, including those with respect to gold holdings by central banks. The demand for, and supply of, gold affect gold prices, but not necessarily in the same manner as demand and supply affect the prices of other commodities. The supply of gold consists of a combination of new mine production and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals. The demand for gold primarily consists of jewelry and investments. Additionally, hedging activities by producers, consumers, financial institutions and individuals can affect gold supply and demand. While gold can be readily sold on numerous markets throughout the world, its market value cannot be predicted for any particular time. We do not presently expect to hedge the sale of any of our anticipated production.

 

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”).

 

Based on this evaluation, our principal executive and principal financial and accounting officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of April 30, 2013.

 

 

Audit committee

 

The Company has established an independent audit committee of the Board of Directors, which consists of Ben Botello as Audit Committee Chairman, with Skip Headen and Howard Siegel as Audit Committee Members. The audit committee’s duties are to recommend to the Company’s Board of Directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will, at all times, be comprised exclusively of directors who are, in the opinion of the Company’s Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

 

Compensation committee

 

The Company has established an independent compensation committee of the Board of Directors, which consists of Howard Siegel as Compensation Committee Chairman, with Skip Headen and Ben Botello as Compensation Committee Members. The compensation committee reviews and approves the Company’s salary and benefits policies, including compensation of executive officers.

 

Changes in Internal Control over Financial Reporting

 

None.

 

PART II - OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS

 

1.) On October 26, 2012, Ironridge Global IV, Ltd (“Ironridge”) filed an Ex Parte Application to enforce a provision of the Stipulated Settlement entered into with the Company on April 18, 2012. Ironridge moved for an order requiring the Company to issue additional shares to Ironridge in addition to the Settlement Shares already issued. The Company vehemently opposed enforcement of the Stipulated Settlement in open court on October 30, 2012. However, the Court ordered that Plaintiff prepare a Proposed Order and Judgment in accordance with the Stipulated Settlement and submit the documents for the Court’s approval. Upon receiving Plaintiff’s Proposed Order and Judgment, the Company filed an opposition to the entry of Plaintiff’s Proposed Order and Judgment on November 3, 2012 as contrary to public policy, unconscionable and void. This opposition was subsequently denied by the court and judgment was entered against the Company.

 

The Company then filed a motion to vacate judgment. During the interim time period, the Company refused to issue shares to Ironridge. Consequently, Ironridge brought a motion for a hearing for the Company to show cause why it shouldn’t be held in contempt of court for refusing to issue additional shares to Ironridge. Consequently, and prior to the hearing, the Company issued all requested shares and fees to Ironridge.

 

The motion to vacate judgment was heard in conjunction with the order to show cause hearing. The motion to vacate judgment was denied. The order to show cause became moot because the Company had already issued the shares. In a separate hearing Ironridge contended that the Company owed them attorney’s fees and “opportunity costs” in connection with share issuances. After submitting briefs to the court, the Company paid attorney’s fees that were owed and issued additional shares to Ironridge per the court order. However, the Company was not ordered to pay Ironridge’s alleged “opportunity costs.”

 

On April 2, 2013, the Company issued 6,000,000 free trading shares of common stock, exempt under Rule 145 (A) and 3(a)(10) of the Securities Act of 1933, to Ironridge Global IV, Ltd. as settlement of the matter with Ironridge.

 

On April 25, 2013, the Company filed an Ex Parte Application to prevent the further issuance of shares, order the return of erroneously issued shares, and to order Ironridge Global Iv, Ltd. (“Ironridge”) to produce their trading records. The Ex Parte Application was subsequently denied.

 

On April 29, 2013, the Company issued 4,467,143 free trading shares of common stock, exempt under Rule 145 (A) and 3(a)(10) of the Securities Act of 1933, to Ironridge Global IV, Ltd. as settlement of the Matter with Ironridge.

 

 

2.) On May 25, 2011, John Theodore Anderson (“Plaintiff”) filed a Complaint against the Company in the United States District Court, District of Nevada. The Plaintiff alleged a breach of contract and sought money damages against the Company. On August 8, 2011, a judgment was entered in favor of Hondo Minerals, Inc., William R. Miertschin, Richard M. Hewitt, Advanced Natural Tech. Services, Rhena Drury, Ivan Webb, Wild Quail Resources, Inc. against Plaintiff, John Theodore Anderson. Mr. Anderson appealed the decision. On October 18, 2011, Mr. Anderson’s appeal was denied and the judgment against Mr. Anderson was affirmed. The Company is considering filing a lawsuit against Mr. Anderson for Abuse of Process, among other torts.

 

 

3.) Other than the foregoing, we know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A.

RISK FACTORS

 

Our Annual Report on Form 10-K for the fiscal year ended July 31, 2012 includes a detailed discussion of our risk factors.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Quarterly Issuances:
1.	On February 5, 2013, the Company issued 8,275,000 shares of restricted common stock for payment pursuant to certain Promissory Notes entered into by and between the Company and those persons receiving the shares.
2.	On March 1, 2013, the Company issued 4,191,000 shares of restricted common stock for payment of consulting and services rendered to the company during the months of November and December 2012, and January of 2013 and for officer/director compensation for the months of November and December 2012, and January of 2013.
3.	On March 18, 2013, the Company issued 1,616,477 free trading shares of common stock, exempt under Rule 145 (A) and 3(a)(10) of the Securities Act of 1933, to Ironridge Global IV, Ltd. as settlement of a legal proceeding, as reported in Part II, Item 1 of this Quarterly Report for the period ending January 31, 2013.
4.	On March 20, 2013, the Company issued 4,300,000 shares of restricted common stock pursuant to a Consulting Agreement dated October 9, 2012.
5.	On April 2, 2013, the Company issued 6,000,000 free trading shares of common stock, exempt under Rule 145 (A) and 3(a)(10) of the Securities Act of 1933, to Ironridge Global IV, Ltd. as settlement of a legal proceeding, as reported in Part II, Item 1 of this Quarterly Report for the period ending April 30, 2013.
6.	On April 24, 2013, the Company issued 3,400,000 restricted shares of common stock for payment pursuant to certain Promissory Notes entered into by and between the Company and those persons receiving the shares. Additionally, on April 24, 2013, the Company issued 500,000 restricted shares of common stock pursuant to certain Promissory Notes entered into by and between the Company and those persons receiving the shares.
7.	On April 29, 2013, the Company issued 4,467,143 free trading shares of common stock, exempt under Rule 145 (A) and 3(a)(10) of the Securities Act of 1933, to Ironridge Global IV, Ltd. as settlement of a legal proceeding, as reported in Part II, Item 1 of this Quarterly Report for the period ending April 30, 2013.
8.	On April 30, 2013, the Company issued 3,805,500 shares of restricted common stock for payment of consulting and services rendered to the company during the months of February to April of 2013 and for officer/director compensation for the months of February to April of 2013.

 

 

Subsequent Issuances:

1.	On May 7, 2013, the Company issued 9,745,136 shares of restricted common stock for payment of consulting and services rendered to the company during the months of November and December 2012, and January of 2013 and for officer/director compensation for the months of November and December 2012, and January of 2013.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this quarterly report.

 

ITEM 5.

OTHER INFORMATION

 

Quarterly Events
1.	As reported on Form 8-K filed with the Commission on February 25, 2013, incorporated by reference herein, on February 4, 2013, the Arizona Department of Environmental Quality (“ADEQ”) issued a Permit Determination Letter to Hondo Minerals Corporation, a Nevada corporation (the “Company”), to advise the Company that its Tennessee Mine facility located in the Wallapai Mining District near Chloride, Mohave County, Arizona is not subject to any standards or other requirements under Sections 111 or 112 of the Clean Air Act, does not have the potential to emit air pollutants above significance levels, and does not require an Air Quality Control Permit. A true and correct copy of the Letter dated February 4, 2013 was furnished as Exhibit 99.1 to the Current Report on Form 8-K.   Additionally, on February 7, 2013, the ADEQ issued a letter to the Company to announce that it has closed the Notice of Violation (“NOV”) issued to the Company on June 11, 2012 and will not proceed with any further action against the Company in regards to this matter. A true and correct copy of the Letter dated February 7, 2013 was furnished as Exhibit 99.2 to the Current Report on Form 8-K.
Subsequent Events

1.

As reported on Form 8-K/A filed with the Commission on May 2, 2013, the Company entered into a Letter of Intent (the “LOI”) with Crowncorp Investments Corporation, a Texas Corporation (“Crowncorp”) on April 25, 2013. The LOI was subsequently amended by an Addendum on April 30, 2013. Pursuant to the terms and conditions of the LOI, Crowncorp shall acquire all of the assets and the issued and outstanding shares of the Company’s common stock (collectively, the “Acquisition”) in exchange for an aggregate all cash purchase price of eighty eight million dollars ($88,000,000) (the “Purchase Price”), contingent upon: (i) the consummation of a tender offer to purchase all of the issued and outstanding shares of HMNC from the Company’s shareholders (the “Tender Offer”); and (ii) the execution of a definitive operating agreement transferring management and control of all of HMNC’s assets and operations to Crowncorp (the “Definitive Operating Agreement”). The Purchase Price is payable as follows: (i) Crowncorp shall provide $1,600,000 to the Company by no later than May 10, 2013; (ii) Crowncorp shall provide $1,600,000 to the Company by no later than May 31, 2013; (iii) Crowncorp shall provide $2,800,000 to the Company upon the consummation of the Definitive Operating Agreement by no later than May 31, 2013; and (iv) upon consummation of the Tender Offer, Crowncorp shall provide: (a) $69,000,000 to the shareholders of HMNC plus the balance of funds remaining after satisfaction of certain debts of the Company (as defined in the LOI); and (b) $13,000,000 to HMNC. In the event that the Acquisition does not close within six (6) months after the execution of the LOI, or if Crowncorp fails to provide the Purchase Price in accordance with the schedule set forth in the LOI, or if Crowncorp otherwise repudiates its obligations under the LOI: (i) Crowncorp shall pay to HMNC a break-up fee of $2,000,000 (the “Break-Up Fee”); and (ii) any amounts paid by Crowncorp pursuant to the LOI shall be deemed a “Senior Secured Loan” from Crowncorp to HMNC in the total amount equal to any amounts paid to HMNC minus the Break-Up Fee.

 

 

2.

On May 14, 2013, the Company filed an 8-K with the Commission making a Regulation FD disclosure in regards to the issuance of a Press Release regarding the delivery of bank instruments to the Company by Crowncorp in support of Crowncorp’s obligations under the LOI, as disclosed on Form 8-K on May 2, 2013.

 

ITEM 6.

EXHIBITS

 

Exhibit Number	Description	Filed
3.1	Articles of Incorporation filed with the Nevada Secretary of State on September 25, 2007.	Incorporated by reference as an Exhibit to the Form S-1 filed on September 11, 2009.
3.1 (a)	Amendment to Articles of Incorporation filed with the Nevada Secretary of State on February 22, 2011.	Incorporated by reference as an Exhibit to the Form 8-K filed on March 8, 2011.
3.2	Bylaws.	Incorporated by reference as an Exhibit to the Form 8-K filed on March 8, 2011.
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32.2	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
95.1	Mine Safety Disclosures.	Filed herewith.
101.INS*	XBRL Instance Document.	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document.	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

 

 

 *Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

 

 SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		HONDO MINERALS CORPORATION
Date: June 19, 2013		/s/ William R. Miertschin
		By: William R. Miertschin
		Its: President and CEO
Date: June 19, 2013		/s/ Chris Larson
		By: Chris Larson
		Its: CFO

 

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

 

Date: June 19, 2013		/s/ William R. Miertschin
		By: William R. Miertschin
		Its: Director
Date: June 19, 2013		/s/ Chris Larson
		By: Chris Larson
		Its: Director
Date: June 19,2013		/s/ J.C. “Skip” Headen
		By: J.C. “Skip” Headen
		Its: Director
Date: June 19, 2013		/s/ Ben Botello
		By: Ben Botello
		Its: Director
Date: June 19, 2013		/s/ Howard Siegel
		By: Howard Siegel
		Its: Director

 

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