Note 1
–
Basis of Presentation
These consolidated 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.
Note 2
–
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 theacquirer 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 have consisted of online marketing and advertising services since August 26, 2011, to the present.
Note 3 - Summary of Significant Accounting Policies
a)Use of Estimates
The preparation of these consolidated 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 consolidated 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 stock-based compensation 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.
b)Basic and Diluted Loss per Share
The Company computes loss per share in accordance with ASC 260,
Earnings per Share
, which requires presentation of both basic and diluted per share (EPS) on the face of the income statement. Basic loss per share is computed by dividing net 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
F - 8
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
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.
c)Cash and Cash Equivalents
The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. The Company has no cash equivalents as of June 30, 2013 and 2012.
d)Financial Instruments
The Company
’
s financial instruments consist principally of cash, accounts receivable, accounts payable, convertible notes 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 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.
e)Mineral Property Costs
Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. 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.
f)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 carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.
F - 8
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
g) 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 financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
h) Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation
–
Stock Based Compensation
and ASC 505,
Equity Based Payments to Non-Employees
, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.
ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company
’
s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company
’
s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
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.
i) Recently Issued Accounting Pronouncements
Recent Developed Accounting Pronouncements
Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position. Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013. The adoption of this update did not have a material impact on the consolidated financial statements.
Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified
Out
of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB
’
s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be
F - 12
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on the consolidated financial statements.
New Accounting Pronouncements Not Yet Adopted
In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.
The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations.
The
amendments in this standard are
effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements.
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent
’
s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in ASU No. 2013-05 resolve the diversity in practice about whether Subtopic 810-10, Consolidation
—
Overall, or Subtopic 830-30, Foreign Currency Matters
—
Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment ina foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) withina foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this standard are effective prospectively for fiscal years, and interim reporting periods within those years, beginning December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-05 will have on our consolidated financial statements.
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our consolidated financial statements.
j) Development Stage Company
The Company is considered a development stage company, with no operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915. ACS 915 requires companies to report their operations, shareholders
’
deficit and cash flows since inception through the date that revenues are generated from management
’
s intended operations, among other things. Management has defined inception as April 11, 2011. Since inception, the Company has incurred an operating loss of $887,543. The Company
’
s working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has
F - 12
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
provided financial data since April 11, 2011 in the consolidated financial statements, as a means to provide readers of the Company
’
s financial information to be able to make informed investment decisions.
k) Going Concern
The Company is in the development stage and has not generated any revenues and has incurred losses of $887,543 since inception April 11, 2011. At June 30, 2013, the Company had $4,683 cash and $651,100 in current liabilities. Further, the Company incurred a loss of $643,254 for the year ended June 30, 2013. 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 consolidated 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 4
–
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
|
|
(73,916
|
)
|
|
|
|
|
|
|
|
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
|
)
|
|
Note 5
–
Intangible Asset
On August 25, 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 of domains per server and propagate them with unique content. The Company expects the initial software to bring value to the Company for the first five years of its service and as such the software is classified as a definitive asset and is amortized over a 5-year period. As of June 30, 2013, the accumulated amortization is $51,724 and the carrying value is $88,276.
Note 6
–
Mineral Claims
On April 1, 2009, the Company acquired certain assets of First Light Resources, Inc. (
“
First Light
”
), namely nine 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 Company common stock were issued to nine 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 $124,911 purchase consideration in the First Light transaction was allocated to the nine 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 nine mineral claims were allowed to lapse in fiscal 2009 and four claims remain in good standing as of March 31, 2013. 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 Exploration Inc. Auric was to have completed its due diligence prior to the option expiring on September 15, 2011. An extension of the expiration date was granted by the Company pending further negotiations on timing, payment amounts and terms. 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.
On March 22, 2013, the Company decided to no longer support mineral claims and therefore took an asset impairment charge equal to the amount of the mineral claims of $124,911.
F - 15
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
Note 7
–
Related Party Transactions
On August 25, 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 4 and Note 5). The acquisition was considered a related party transaction as the Company
’
s President and Director was also the President and Director of Cloud Data.
As of June 30, 2013 and 2012, the related party loan amount is $102,991 and $73,916 respectively.
Included in amounts due to related parties as of June 30, 2012 is $73,916 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. The remaining balance of $29,075 is due to Direct Capital. The amount is unsecured, non-interest bearing and is due on demand.
The Company is indebted to shareholders for $4,540 as at June 30, 2013 and 2012, which is unsecured, non-interest bearing and is due on demand.
Note 8
–
Due to Former Related Party
As ofJune 30, 2013 and 2012, $190,084 is due to former related party who is a Company
’
s former President and Director of the Company who resigned in June 2007. These amounts are non-interest bearing, unsecured and have no specific terms of repayment.
Note 9
–
Convertible Notes Payable
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
2013
|
|
2012
|
|
Asher Note #1
|
|
-
|
|
-
|
|
Asher Note #2
|
|
20,500
|
|
-
|
|
Asher Note #3
|
|
32,500
|
|
-
|
|
Asher Note #4
|
|
37,500
|
|
-
|
|
Gel Properties, LLC
|
|
30,000
|
|
-
|
|
|
|
|
$ 120,500
|
|
$ -
|
|
|
Debt discount
|
|
(16,400)
|
|
-
|
|
|
Accrued interest
|
|
3,085
|
|
-
|
|
|
|
|
$ 107,185
|
|
$ -
|
Asher Note #1
On July 17, 2012, the Company executed an Unsecured Promissory Note (the
“
Asher Note
”
) to Asher Enterprises, Inc. (
“
Asher
”
). Under the terms of the Asher Note, the Company has borrowed a total of $37,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of April 19, 2013. The Asher Note also contains customary events of default.
During the year ended June 30, 2013 the Company accrued $1,500 (2012 - $nil) in interest expense.
F - 15
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
Upon the holder
’
s option to convert becoming active the Company recorded a debt discount and derivative liability of $69,144 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the
F - 17
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended June 30, 2013 the Company recorded a loss of $38,502 (2012 - $nil) due to the change in value of the derivative liability during the year.
During the year ended June 30, 2013, the Company issued an aggregate of 6,246,397 common shares upon the conversion of the principal and interest balance of the note into common stock. At that time the balance of debt discount of $69,144 was charged to the statement of operations and the remaining balance of the derivative liability amounting to $107,646 was re-classified to additional paid in capital.
Asher Note #2
On December 12, 2012, the Company executed an Unsecured Promissory Note (the
“
Asher Note
”
) to Asher Enterprises, Inc. (
“
Asher
”
). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of September 14, 2013. The Asher Note also contains customary events of default.
During the year ended June 30, 2013 the Company accrued $1,341 (2012 - $nil) in interest expense.
Upon the holder
’
s option to convert becoming active the Company recorded a debt discount and derivative liability of $66,237 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended June 30, 2013, the Company recorded a loss of $54,585 (2012 - $nil) due to the change in value of the derivative liabilityduring the year.
During the year ended June 30, 2013, the Company issued an aggregate of 3,636,364 common shares upon the conversion of $12,000 in principal of the note into common stock. At that time $41,344 of the debt discount was charged to the statement of operations and the remaining balance of the derivative liability amounting to $21,474 was re-classified to additional paid in capital.
Asher Note #3
On January 30, 2013, the Company executed an Unsecured Promissory Note (the
“
Asher Note
”
) to Asher Enterprises, Inc. (
“
Asher
”
). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of November 1, 2013. The Asher Note also contains customary events of default.
Asher Note #4
On April 12, 2013, the Company executed an Unsecured Promissory Note (the
“
Asher Note
”
) to Asher Enterprises, Inc. (
“
Asher
”
). Under the terms of the Asher Note, the Company has borrowed a total of $37,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of January 16, 2014. The Asher Note also contains customary events of default.
Gel Properties, LLC
F - 17
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
On June 28, 2013, the Company issued a convertible promissory note to Gel Properties, LLC. Under the terms of the note, the Company has borrowed a total of $30,000 from Gel Properties, LLC, which accrues interest at an annual rate of 6% and has a maturity date of June 28, 2014. The note also contains customary events of default.
During the year ended June 30, 2013 the Company accrued $10 (2012 - $nil) in interest expense.
Note 10
–
Derivative Liabilities
The Company issued financial instruments in the form of convertible notes with embedded conversion features. The convertible notes payable have conversion rates which are indexed to the market value of the Company
’
s commonstock price.
During the year ending June 30, 2013, $49,500 of convertible notes payable were converted into common stock of the Company.
These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP. The valuation assumptions are classified within Level 3 inputs.
The following table represents the Company
’
s derivative liability activity for the embedded conversion features discussed above
:
|
|
|
|
|
June 30,
|
|
|
2013
|
Balance, beginning of year
|
|
$ -
|
Initial recognition of derivative liability
|
|
135,381
|
Fair value change in derivative liability
|
|
93,087
|
Conversion of derivative liability to APIC
|
|
|
Asher Note #1
|
|
(107,646)
|
Asher Note #2
|
|
(21,474)
|
Balance as of June 30, 2013
|
|
$ 99,348
|
Note 11
–
Common Stock
On August 26, 2011, the Company issued 70,000,000 shares at $0.002 per share pursuant to a Share Exchange Agreement with Cloud Date Corporation. An intangible asset of $140,000 was recorded.
From January 1, 2013 to March 31, 2013, the holders of a convertible notes converted a total of $39,000 of principal and interest into 6,246,397 shares of common stock.
On March 13, 2013, the Company issued 6,000,000 shares of common stock to settle debt of $60. These shares were then retired on April 23, 2013
On May 22, 2013, the Company issued 10,000,000 shares of common stock to settle debt of $100. Of the shares issued, 5,000,000 were retired on June 27, 2013.
From April 1, 2013 to June 30, 2013, the holders of a convertible notes converted a total of $12,000 of principal into 3,636,364 shares of common stock.
As at June 30, 2013 the Company has authorized 950,000,000 shares of common stock, of which 139,016,107 shares are issued and outstanding.
F - 17
Microelectronics Technology Company
(A Development Stage Company)
Notes to Financial Statements as of June 30, 2013
Note 12
–
Preferred Stock
On May 24, 2013, the Company issued one share of preferred stock to settle debt of $165,000.
As at June 30, 2013, the Company has authorized 50,000,000 shares of preferred stock, of which 110,001 shares are issued and outstanding.
Note 13
–
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-6, Accounting for Uncertainty in Income Taxes, which requires the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse. As of June 30, 2013, we had net operating loss carry forwards of $(887,543) and a deferred tax asset of $301,765 using the statutory rate of 34%. The net operating loss carry forwards may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked a loss valuation allowance of $301,765 as of June 30, 2013.
|
|
|
|
|
June 30,
|
|
2013
|
|
2012
|
Deferred Tax Asset
|
$ 301,765
|
|
$ 72,994
|
Valuation Allowance
|
(301,765)
|
|
(72,994)
|
Deferred Tax Asset (Net)
|
$ -
|
|
$ -
|
F - 17