FORM 10-Q
[X]
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Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended
September 30, 2011
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[ ]
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Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from __________ to__________
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Commission File Number:
001-32984
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Microelectronics Technology Company
(Exact name of registrant as specified in its
charter)
Nevada
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N/A
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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14 Monarch Bay Plaza
Monarch Bay, California 92629
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(Address of principal executive offices)
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866-587-2860
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(Registrant’s telephone number)
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___________________________
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(Former name, former address and former fiscal year, if changed since last report)
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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.
[X] 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).
[ ] Yes [X] No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
[ ] Large accelerated filer Accelerated filer
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[ ] Non-accelerated filer
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[X] Smaller reporting company
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Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
124,133,345 as of September 30, 2011.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
These financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America for interim financial information
and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation
have been included. Operating results for the interim period ended September 30, 2011 are not necessarily indicative of the results
that can be expected for the full year.
Microelectronics Technology Company
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in US Dollars)
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September 30,
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June 30,
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2011
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2011
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(Unaudited)
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Assets
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Current Assets
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Cash
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$
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699
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$
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100
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Amounts receivable
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386
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—
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Prepaid expenses
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668
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—
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Total current assets
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1,753
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100
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Intangible asset (Note 4)
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140,000
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140,000
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Mineral claims acquisition costs (Note 5)
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124,912
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—
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Total Assets
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$
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266,665
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$
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140,100
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Liabilities and Stockholders' Deficit
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Current Liabilities
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Accounts payable and accrued liabilities
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$
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125,071
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$
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27,200
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Due to related parties (Note 6)
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13,411
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2,500
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Due to former related party (Note 7)
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252,322
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—
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Total Liabilities
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390,804
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29,700
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Contingency and Commitment (Note 1)
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Stockholders' Deficit
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Preferred stock (Note 9)
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Authorized: 200,000,000 shares, $0.00001 par value
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Issued and outstanding: 110,000 shares
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1
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1
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Common stock (Note 8)
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Authorized 200,000,000 shares, $0.00001 par value
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Issued and outstanding: 124,133,345 (June 30, 2011 - 54,133,345 shares)
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1,241
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541
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Additional paid-in capital
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—
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177,858
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Stock subscriptions receivable
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(38,400
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)
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(38,400
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)
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Deficit accumulated in the development stage
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(86,981
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)
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(29,600
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Total Stockholders' Deficit
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(124,139
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)
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110,400
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Total Liabilities and Stockholders' Deficit
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$
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266,665
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$
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140,100
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The accompanying notes
are an integral part of these consolidated financial statements.
Microelectronics Technology Company
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in US Dollars)
(Unaudited)
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Accumulated
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During the
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Development
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Three Months
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Stage
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Ended
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(April 11, 2011 to
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September 30,
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September 30,
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2011
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2011)
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Revenue
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$
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—
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$
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—
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Expenses
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Advertising
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18,000
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30,000
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Consulting fees
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—
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5,100
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General and administrative
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1,033
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1,153
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Management fees
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15,000
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25,000
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Professional fees
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15,756
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17,756
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Total Expenses
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49,789
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79,009
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Net Loss
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$
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(49,789
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$
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(79,009
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Net Loss per Common Share – Basic and Diluted
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$
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(0.00
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Weighted Average Number of Common Shares Outstanding
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80,764,000
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The accompanying notes
are an integral part of these consolidated financial statements.
Microelectronics Technology Company
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)
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Accumulated
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During the
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Development
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Three Months
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Stage
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Ended
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(April 11, 2011 to
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September 30,
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September 30,
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2011
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2011
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)
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Cash Flows (Used In) Provided By :
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Operating Activities
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Net Loss
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$
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(49,789
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$
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(79,009
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)
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Changes in operating assets and liabilities:
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Accounts payable and accrued liabilities
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50,468
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77,288
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Due to related parties
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(62,823
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)
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(60,323
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Due to former related parties
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62,238
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62,238
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Net Cash Provided by Operating Activities
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94
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194
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Investing Activities
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Cash acquired upon recapitalization
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505
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505
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Net Cash Provided by Investing Activities
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505
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505
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Increase in Cash
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599
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699
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Cash, Beginning of Period
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100
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—
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Cash, End of Period
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$
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699
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$
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699
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Supplemental Disclosure of Cash Flow Information:
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Interest paid
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$
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—
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$
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—
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Income tax paid
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$
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—
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$
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—
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Non-cash Investing and Financing Activities:
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$
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—
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$
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140,000
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The accompanying
notes are an integral part of these consolidated financial statements.
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 1 – Nature of Operations and Continuance of Business
Microelectronics Technology Company (the
“Company”) was incorporated in the State of Nevada on May 18, 2005 under the name Admax Resources Inc., which name
was changed on February 9, 2007 to China YouTV Corp. and then to Microelectronics Technology Company on August 31, 2009. From May
18, 2005 to August 26, 2011, the Company’s business operations were limited to the acquisition and evaluation of mineral
claims and the evaluation of an internet media venture in China.
On August 26, 2011, the Company entered
into a Share Exchange Agreement with Cloud Data Corporation (“Cloud Data”). Pursuant to the agreement, the Company
issued 70,000,000 shares of common stock in exchange for all of the issued and outstanding shares of Cloud Data. The acquisition
was a capital transaction in substance and therefore has been accounted for as a recapitalization, which is outside the scope of
Accounting Standards Codification (“ASC”) 805,
Business Combinations
. Under recapitalization accounting, Cloud
Data was considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities
of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. These consolidated financial
statements include the accounts of the Company since the effective date of the recapitalization and the historical accounts of
the business of Cloud Data since inception on April 11, 2011. As a result of the transaction, the Company’s business operations
consisted of online marketing and advertising services from August 26, 2011 to present.
The Company is in the development stage
and has not generated any revenues and has incurred losses of $79,009 since inception of Cloud Data on April 11, 2011. At September
30, 2011, the Company had $699 in cash and $390,804 in current liabilities. Further, the Company incurred a loss of $49,789 for
the three months ended September 30, 2011. In view of these conditions, the ability of the Company to continue as a going concern
is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain
necessary financing to fund ongoing operations. To meet these objectives, the Company continues to seek other sources of financing
in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any
such financing can be obtained on acceptable terms, if at all. 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.
Note 2 - Summary of Significant Accounting Policies
a)
Basis of Presentation
These financial statements and related
notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.
These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Cloud Data Corporation,
a company incorporated in the State of Nevada. All inter-company accounts and transactions have been eliminated. The Company’s
fiscal year end is June 30.
b)
Interim Financial Statements
The unaudited interim consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial
information and with the instructions to Securities and Exchange Commission ("SEC") Form 10-Q. They do not include all
of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore,
these interim consolidated financial statements should be read in conjunction with the Company's audited financial statements and
notes thereto for the year ended June 30, 2011, included in the Company's Annual Report on Form 10-K filed on September 27, 2011
with the SEC.
The consolidated financial statements
included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management,
are necessary to present fairly the Company's financial position at September 30, 2011, and the results of its operations and cash
flows for the interim period ended September 30, 2011. The results of operations for the three months ended September 30, 2011
are not necessarily indicative of the results to be expected for future quarters or the full year.
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 2 - Summary of Significant Accounting Policies
(continued)
c)
Use of Estimates
The preparation of these financial statements
in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
The Company regularly evaluates estimates and assumptions related to long-lived assets and
deferred income tax valuations. The Company bases its estimates and assumptions on current facts, historical experience and various
other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other
sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.
To the extent there are material differences between the estimates and the actual results, future results of operations will be
affected.
d)
Basic and Diluted Earnings (Loss) Per Share
The Company computes earnings (loss)
per share in accordance with ASC 260,
Earnings per Share
which requires presentation of both basic and diluted earnings
per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock
using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number
of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive
shares if their effect is anti dilutive.
e)
Comprehensive Loss
ASC 220,
Comprehensive Income
establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.
As
at September 30, 2011, and
June 30, 2011, the Company had no items that represent other comprehensive loss, and therefore
has not included a schedule of comprehensive loss in the financial statements.
f)
Cash and Cash Equivalents
The Company considers all highly liquid
instruments with maturity of three months or less at the time of issuance to be cash equivalents.
g)
Financial Instruments
The Company’s financial instruments
consist principally of cash, amounts receivable, accounts payable, due to related parties and due to former related party. Pursuant
to ASC 820,
Fair Value Measurements and Disclosures,
and ASC 825,
Financial Instruments
the fair value of the Company’s
cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical
assets. The Company believes that the recorded values of all of the Company’s other financial instruments approximate their
current fair values because of their nature or respective relatively short maturity dates.
The Company’s operations are in
Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the
Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.
Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
h)
Advertising
Costs
Advertising costs are charged to operations
as incurred.
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 2 - Summary of Significant Accounting Policies
(continued)
i)
Intangible Assets
Intangible assets consist of software
which is not yet ready for commercial release. The capitalized costs of software are amortized on a product-by-product basis, starting
when the product is available for general release to customers. The Company will recognize amortization of intangible assets on
a straight-line method over their estimated period of benefit, once commercial production has commenced. The Company evaluates
the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates
of useful lives or that indicate the asset may be impaired.
j)
Mineral Property Costs
Mineral property exploration costs are
expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for
impairment under ASC 360,
Property, Plant, and Equipment
at each fiscal quarter end. When it has been determined that a
mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred
to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated
life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged
to operations.
k)
Long-lived Assets
In accordance with ASC 360,
Property
Plant and Equipment
, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances
indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited
to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors;
accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with
the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before
the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which
is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal
of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is
not recoverable and exceeds fair value.
l)
Foreign Currency Translation
The functional and reporting currency
of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to
United States dollars in accordance with ASC 740
Foreign Currency Translation Matters
, using the exchange rate prevailing
at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or
balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into
derivative instruments to offset the impact of foreign currency fluctuations.
To the extent that the Company incurs
transactions that are not denominated in its functional currency, they are undertaken in Canadian dollars. The Company has not,
to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
m)
Stock-based Compensation
Pursuant to ASC 505,
Equity Based
Payments to Non-Employees
, all transactions in which goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument
issued, whichever is more reliably measurable.
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 2 - Summary of Significant
Accounting Policies
(continued)
n)
Income Taxes
The Company accounts for income taxes
using the asset and liability method in accordance with ASC 740,
Income Taxes.
The asset and liability method provides that
deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the
financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed
more likely than not to be realized.
o)
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new
accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Note 3 – Reverse Merger Transaction
Pursuant to a Share Exchange Agreement
dated August 26, 2011, the Company agreed to acquire all of the issued and outstanding shares of Cloud Data in exchange for the
issuance of 70,000,000 shares of the Company’s common stock. The share exchange was treated as a reverse acquisition with
Cloud Data deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting,
with the former shareholders of Cloud Data controlling approximately 52% of the voting rights after the closing of the transaction.
The reverse merger is deemed a recapitalization and the consolidated financial statements represent the continuation of the financial
statements of Cloud Data (the accounting acquirer/legal subsidiary) except for its capital structure, and the consolidated financial
statements reflect the assets and liabilities of Cloud Data recognized and measured at their carrying value before the combination
and the assets and liabilities of the Company (the legal acquiree/legal parent). The equity structure reflects the equity structure
of the Company, the legal parent, and the equity structure of Cloud Data, the accounting acquirer, as restated using the exchange
ratios established in the share exchange agreement to reflect the number of shares of the legal parent.
The allocation of the purchase price and
adjustment to stockholders’ equity is summarized in the table below:
Net
book value of the Company’s net assets acquired
|
|
Cash
|
$
|
505
|
|
Amounts receivable
|
|
386
|
|
Prepaid expenses
|
|
668
|
|
Mineral claims
acquisition costs
|
|
124,912
|
|
Accounts payable
|
|
(47,403
|
)
|
Due to related
parties
|
|
(73,734
|
)
|
Due
to former related party
|
|
(190,084
|
)
|
Net
assets
|
$
|
(184,750
|
)
|
Adjustment to stockholders’ equity
|
|
Reduction to additional paid-in capital
|
$
|
(177,858
|
)
|
Increase in common stock at par value
|
|
700
|
|
Adjustment to accumulated deficit
|
|
(7,592
|
)
|
Net asset adjustment to equity
|
$
|
(184,750
|
)
|
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 4 – Intangible Asset
On April 24, 2011, the Company acquired the
right, title, and interest in software known as Domain Stutter with an estimated fair value of $140,000 in consideration for the
issuance of 70,000,000 shares of common stock of the Company. Domain Stutter is a system that can auto host thousands domains per
server and propagate them with unique content.
Note 5 – Mineral Claims
On April 1, 2009, the Company acquired certain
assets of First Light Resources, Inc. (“First Light”), namely six mineral claims located near Wawa in northern Ontario,
Canada. The purchase price for the assets was $114,000, payable in cash and/or Company common stock. No cash was paid to First
Light and a total of 55,000 shares of the Company’s common stock were issued to three designated parties of First Light,
increasing the issued and outstanding shares of Company’s common stock from 30,060 shares to 85,060 shares. The Company also
assumed a $10,912 account payable of First Light in connection with this transaction. The total $124,912 purchase consideration
in the First Light transaction was allocated to the six mineral claims which represents First Light’s represented amount
of exploration costs on the properties. Title to the mineral claims is being held in trust, on behalf of the Company, by Dog Lake
Exploration Inc. (“Dog Lake”). Two of the six mineral claims were allowed to lapse in fiscal 2009 and four claims remain
in good standing as of September 30, 2011. After completion of the First Light transaction both Dog Lake and First Light are considered
related parties with the Company due to significant stockholdings in the Company by a director in common between Dog Lake and First
Light.
On April 1, 2010, Auric Mining
Company (“Auric”) entered into an option agreement with the Company to acquire from the Company a fifty-two
percent working interest in the mining claims held in trust, on behalf of the Company by Dog Lake. Auric was required to
complete its due diligence prior to the option expiring on September 15, 2011. During the period ended September 30, 2011,
the option expired unexercised. At the time of the agreement, a director of the Company was also the President of Auric,
therefore Auric was considered to be a related party and the option agreement was a related party transaction.
Note 6 – Related Party Transactions
On August 26, 2011 the Company acquired 100%
of the outstanding shares of Cloud Data Corporation in exchange for 70,000,000 common shares of the Company (Note 3). The acquisition
was considered a related party transaction as the Company’s President and Director was also the President and Director of
Cloud Data.
During the three months ended September 30,
2011, the Company incurred consulting fees of $2,500 to the Company’s President and Director. As at September 30, 2011, the
Company is indebted to this individual for $2,500 (June 30, 2011 - $2,500), which is unsecured, non-interest bearing and is due
on demand.
Included in amounts due to related parties
as at September 30, 2011 is $10,911 (June 30, 2011 - $nil) owing to 722868 Ontario Ltd. for the amount payable that was assumed
by the Company in the acquisition of the mineral claims from First Light.
Microelectronics Technology Company
(A Development Stage Company)
Notes to Consolidated Financial Statements as of September 30,
2011
(Expressed
in US Dollars)
(Unaudited)
Note 7 – Due to Former Related Party
As at September 30, 2011, $190,084 (June 30,
2011 - $nil) was due to former related party who resigned as the Company’s former President and Director in June 2007. These
amounts are non-interest bearing, unsecured and have no specific terms of repayment.
As at September 30, 2011, $45,638 (June 30,
2011 - $nil) is owing to a corporation which was a former significant shareholder of the Company. The amount is unsecured, non-interest
bearing and is due on demand.
Also included in amounts due to former related
parties as at September 30, 2011, is $16,600 (June 30, 2011 - $nil) advanced by several corporations which were under common control
with several significant shareholders of the Company.
Note 8 – Common Stock
On August 26, 2011, the Company issued 70,000,000
shares of common stock pursuant to a Share Exchange Agreement with Cloud Data (Note 3).
Note 9 – Preferred Stock
On October 5, 2009, the Company issued 110,000
preferred shares at $0.01 per share. Each preferred share is convertible into 100 common shares and each preferred share entitles
the holder to 100 votes at any shareholders’ meeting. The preferred shareholders have the first right of refusal to be acquired
in the event of a change in control.
Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical
information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results,
and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions.
We intend such forward-looking statements to be covered by the
safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are
including this statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based
on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially
from the forward-looking statements.
Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects
on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability
of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also
be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
We undertake
no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events
or otherwise.
Further information concerning our business, including additional factors that could materially
affect our financial results, is included herein and in our other filings with the SEC.
Overview
We are a start-up, development stage corporation
and have not yet generated any revenues from our business activities. We were incorporated in the State of Nevada on May 18, 2005.
We have four mineral claims located near Wawa in northern Ontario, Canada that we someday plan to explore for precious metals.
Our plans to explore these claims, however, have been put on hold as result of our recent acquisition of Cloud Data on August 26,
2011. Through the acquisition of Cloud Data, we are moving into the Internet incubator space in order to capitalize upon the technology
opportunities available today and in the immediate future within the cloud computing market place.
Results
of Operations for the Three Month Ended September 30, 2011 and Period from April 11, 2011 until September 30, 2011
We generated no revenue for the
period from April 11, 2011 until September 30, 2011. We are a development stage company and intend to pursue the line of business
of internet marking though the acquisition of Cloud Data.
Our Operating Expenses for the three months
ended September 30, 2011 were $49,789. Our Operating Expenses from April 11, 2011 to September 30, 2011 were $79,009. For each
period our Operating Expenses consist primarily of advertising, management fees and professional fees.
We, therefore, recorded a net loss of $49,789
for the three months ended September 30, 2011 and a net loss of $79,009 for the period from April 11, 2011 until September 30,
2011.
We anticipate our operating expenses will increase
as we undertake the business of internet marking though the acquisition of Cloud Data.
Liquidity and Capital Resources
As of September 30, 2011, we had $1,753 in
current assets and $390,804 in current liabilities. Thus, we had a working capital deficit of $389,051 as of September 30, 2011.
Operating activities used $194 in cash for
the period from April 11, 2011 until September 30, 2011. Our net loss of $79,009 along with amounts due to related parties of $60,323
were the primary factors of our negative operating cash flow, offset by accrued expenses of $77,288 and amounts due to former related
parties of $62,238. Investing activities used $505 in cash acquired upon recapitalization for the period from April 11, 2011 until
September 30, 2011. We had no cash used in or provided for financing activities for the period from April 11, 2011 until September
30, 2011.
As of September 30, 2011, we have insufficient
cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals.
The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund
operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working
capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement
or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms,
or at all.
Going Concern
We are in the development stage and have not
generated any revenues and have incurred losses of $79,009 since April 11, 2011. At September 30, 2011, we had $699 in cash and
$390,804 in current liabilities. Further, we incurred a loss of $49,789 for the three months ended September 30, 2011. In view
of these conditions, our ability to continue as a going concern is in substantial doubt and dependent upon achieving a profitable
level of operations and on our ability to obtain necessary financing to fund ongoing operations. To meet these objectives, we continue
to seek other sources of financing in order to support existing operations and expand the range and scope of our business. However,
there are no assurances that any such financing can be obtained on acceptable terms, if at all. The accompanying financial statements
do not give effect to any adjustments which would be necessary should we be unable to continue as a going concern.
Off Balance Sheet Arrangements
As of September 30, 2011, there were no off
balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
A smaller reporting company is not required
to provide the information required by this Item.
Item 4T. Controls and Procedures
We carried out an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
as of September 30, 2011. This evaluation was carried out under the supervision and with the participation of our Chief Executive
Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that, as of September 30, 2011, our disclosure controls and procedures were not effective due to the presence of material weaknesses
in internal control over financial reporting.
A material weakness is a deficiency, or a 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. Management has
identified the following material weaknesses which have caused management to conclude that, as of September 30, 2011, our disclosure
controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient
written policies and procedures for accounting and financial reporting with respect to the requirements and application of both
US GAAP and Securities and Exchange Commission guidelines.
Remediation Plan to Address the Material
Weaknesses in Internal Control over Financial Reporting
Our company plans to take steps to enhance
and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on
Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to
implement the following changes during our fiscal year ending June 30, 2012: (i) appoint additional qualified personnel to address
inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for
accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing
to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may
be adversely affected in a material manner.
We are unable to remedy our controls related
to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.
Changes in Internal Control over Financial
Reporting
There
were no changes in our internal control over financial reporting during the three months ended September 30, 2011 that have materially
affected, or are reasonable likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware
of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting
securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information
required by this Item.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
On August 26, 2011, we issued 70,000,000 shares of our common stock
pursuant to a Share Exchange Agreement with Cloud Data.
These issuances were deemed to be exempt under rule 506 of Regulation
D and Section 4(2) of the Securities Act of 1933, as amended, since, among other things, the transactions did not involve a public
offering, the investors were accredited investors and / or qualified institutional buyers, the investors had access to information
about the Company and their investment, the investors took the securities for investment and not resale, and the Company took appropriate
measures to restrict the transfer of the securities.
Item 3. Defaults upon Senior Securities
None
Item 4. Removed and Reserved
Item 5. Other Information
None
Item 6. Exhibits
SIGNATURES
In accordance with the requirements of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
Microelectronics Technology Company
|
By:
|
/s/ Brett Everett
|
|
Brett Everett
|
|
President, Secretary,
|
|
Chief Executive Officer,
|
|
Chief Financial Officer,
|
|
Principal Accounting Officer,
|
|
Treasurer, and Director
|
November 14, 2011
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