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EX-31.1 - EXHIBIT 311 - MICROELECTRONICS TECHNOLOGY Coexhibit311_ex31z1.htm
EX-31.2 - EXHIBIT 312 - MICROELECTRONICS TECHNOLOGY Coexhibit312_ex31z2.htm
EXCEL - IDEA: XBRL DOCUMENT - MICROELECTRONICS TECHNOLOGY CoFinancial_Report.xls
EX-32.1 - EXHIBIT 321 - MICROELECTRONICS TECHNOLOGY Coexhibit321_ex32z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________


FORM 10-Q

____________


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

For the quarterly period ended March 31, 2013


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

For the transition period from ______ to _______


Commission File Number 001-32984

[mely10q32013_10q002.gif]

MICROELECTRONICS TECHNOLOGY COMPANY

(Name of small business issuer in its charter)





Nevada


20-2675800

(State of incorporation)


(I.R.S. Employer Identification No.)


1155 Camino Del Mar, #172, Del Mar CA 92014

(Address of principal executive offices)


(949) 436-9382

(Registrants telephone number)


2195 San Dieguito Drive, Del Mar, California

(Former name, former address and former fiscal year, if changed since last report)


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


Yes [X] 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[  ]No[X]


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

[  ] (Do not check if a smaller reporting company)

Smaller reporting company

[X]




1


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


As of April 17, 2013, there were 136,379,742 shares of the registrants $0.00001 par value common stock issued and outstanding.



MICROELECTRONICS TECHNOLOGY COMPANY*


TABLE OF CONTENTS





Page

PART I. FINANCIAL INFORMATION





ITEM 1.

FINANCIAL STATEMENTS

3




ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

14




ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    17

ITEM 4.

CONTROLS AND PROCEDURES

17







PART II.OTHER INFORMATION





ITEM 1.

LEGAL PROCEEDINGS

18




ITEM 1A.

RISK FACTORS

18




ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

18




ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

18




ITEM 4.

MINE SAFETY DISCLOSURES

18




ITEM 5.

OTHER INFORMATION

18




ITEM 6.

EXHIBITS

18


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 Microelectronics Technology Company (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



2


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,"MELY, "our," "us," the "Company," refers to Microelectronics Technology Company.



3


PART I - FINANCIAL INFORMATION


ITEM 1.FINANCIAL STATEMENTS









[mely10q32013_10q004.gif]

MICROELECTRONICS TECHNOLOGY COMPANY

(A Development Stage Company)


Condensed Consolidated Financial Statements


(Expressed in US dollars)


March 31, 2013 (unaudited)









Financial Statement Index



Condensed Consolidated Balance Sheets (unaudited)

4



Condensed Consolidated Statements of Operations (unaudited)

5



Condensed Consolidated Statements of Cash Flows (unaudited)

6



Notes to the Condensed Consolidated Financial Statements (unaudited)

8

















4



 

MicroElectronics Technology Company

(A Development Stage Enterprise)

Consolidated Balance Sheet

  March 31, 2013 (unaudited) and June 30, 2012





 March 31,

 June 30,





2013

2012

 ASSETS


 (Unaudited)


 Current Assets






 Cash


$

2,852 

$

7,742 



 Accounts receivable

1,068 


 Total Current Assets

3,920 

7,742 

 Non-Current Assets






 Equipment

12,839 

10,440 



 Mineral claim acquisition costs

124,911 



 Intangible assets

140,000 

140,000 


 Total Non-Current Assets

152,839 

275,351 


 TOTAL ASSETS


$

156,759 

$

283,093 

 LIABILITIES AND STOCKHOLDERS' DEFICIT



 Current Liabilities






 Accounts payable and accrued liabilities

$

139,122 

$

242,604 



 Related party loans

73,916 

73,916 



 Former related party loan

190,084 

190,084 



 Stockholders' loans

4,400 

4,540 



 Notes payable

99,715 

53,396 


 Total Current Liabilities

507,237 

564,540 

 Stockholders' Deficit




 Preferred stock






 Authorized: 200,000,000 shares, 0.00001 par value;





  issued and outstanding: 110,000 shares as at





  March 31, 2013 and June 30, 2012

 Common Stock:  






 Authorized: 200,000,000 shares, $0.00001 par value;





   issued and outstanding: 136,379,742 shares as at





  March 31, 2013 (124,133,345 shares as at June 30, 2012)

1,363 

1,241 

 Additional paid-in capital


291,296 

 Stock subscriptions receivable

(38,400.00)

(38,400.00)

 Deficit accumulated in the development stage

(604,738.00)

(244,289.00)


 Total stockholders Deficit

(350,478.00)

(281,447.00)


 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$

156,759 

$

283,093 

The accompanying footnotes are an integral part of these financial statements





 

 



5



 

 

MicroElectronics Technology Company

 (A Development Stage Company)

 

 Consolidated Statement of Operations and Comprehensive Loss

 

 (Expressed in U.S. Dollars)

 

 (Unaudited)

 






 Cumulative






 during the  






 Development






 Stage






 from Inception


 For the Three months ended

 For the Nine months ended

 (April 11, 2011)


 March 31,

 March 31,

 to March 31,


2013

2012

2013

2012

2013







 Revenue

$

9,881 

$

$

12,230 

$

$

12,230 







 Expenses






 Advertising

18,199 

18,000 

54,732 

55,724 

145,930 

 Asset impairment charge

124,911 

124,911 

124,911 

 Consulting fees

15,219 

2,566 

42,958 

2,566 

66,038 

 Management fees

15,000 

15,000 

45,000 

45,000 

115,000 

 Professional fees

10,085 

1,430 

16,350 

22,936 

43,006 

 Other General & Administrative

13,234 

3,874 

29,927 

21,464 

63,282 

 Total Expenses

196,649 

40,870 

313,879 

147,690 

558,168 







 Net Loss from Operations

$

(186,768)

$

(40,870)

$

(301,649)

$

(147,690)

$

(545,938)







 Other Income and Expenses






 Interest expense

(56,162)

(58,800)

(58,800)







 Net Loss

(242,930)

(40,870)

(360,449)

(147,690)

(604,737)







 Net Loss per share,







$

(0)

$

(0)

$

(0)

$

(0)














 Weighted average number of shares






 outstanding; basic and diluted

129,283,329

124,133,345

129,283,329

124,133,345







 

 



6



  

 

MicroElectronics Technology Company

(A Development Stage Enterprise)

 

 Consolidated Statement of Cash Flow

 

 For the Nine Months Ended March 31, 2013

 

 (Expressed in U.S. Dollars)

 

 (Unaudited)

 








 Cumulative




 during the  




 Development




 Stage



   

 from Inception


 For the Nine Months

 For the Nine Months

 (April 11, 2011)


 Ended

 Ended

 to


March 31, 2013

March 31, 2012

 March 31, 2013)

 Operating Activities




 Net Loss

$

(360,449)

$

(147,690)

$

(604,738)

 Adjustments to reconcile Net loss




 to net cash provided by (used in) operations:




 Interest expense

58,800 

55,042 

 Depreciation

2,764 

3,273 

 Change in operating assets and liabilities:




 Accounts receivable

(1,068)

(1,886)

(1,068)

 Prepaid expenses

(669)

 Accounts payable

(71,167)

170,153 

175,195 

 Due to related parties

71,416 

 Due to former related parties

190,084 

 Due to direct capital

20,371 

 Due to Shareholders

4,540 

 Net cash provided by (used in) Operating Activities

(371,120)

306,319 

(372,296)

 Investing Activities




 Acquision of equipment

(5,162)

(4,363)

(16,112)

 Impairment of mineral claims

124,911 

(124,911)

 Acquision of intangible assets

(140,000)

 Net cash provided by (used in) Investing Activities

119,749 

(129,274)

(156,111)

 Financing Activities




 Proceeds of notes payable

102,500 

102,500 

 Proceeds of loan from Direct Capital

144,121 

192,542 

 

 

 

 

 



7



 Payments to Shareholders' loans

(140)

4,400 

 Proceeds of loan from Drake Group

4,975 

 Proceeds of loan from related parties

73,916 

 Recapitalization adjustment

(177,858)

 Loan from former related party

190,084 

 Common stock issued in reorganization

700 

1,242 

 Stock subscriptions receivable

(38,400)

 Net cash provided by (used in) Financing Activities

246,481 

(177,158)

531,259 





 Bank Overdraft

13 





 Net increase in cash

(4,890)

(100)

2,852 





 Cash at beginning of period

7,742 

100 





 Cash at end of period

$

2,852 

$

$

2,852 









 Supplemental cash flow information




 Interest paid

$

$

$

 Income taxes paid

$

$

$





 Non-cash Investing and Financing Activities




 Acquisition of Intangible Asset

$

$

$

140,000 

 Preferred Stocks Issued for Debt Settlement

$

165,000 

$

$

 Net Asset Adjustment in Reorganization

$

$

184,750 

$

1,242 

























8


Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2013

(Expressed in US Dollars)


Note 1 Basis of Presentation

These unaudited interim financial statements as of and for the nine months ended March 31, 2013 reflect all adjustments which, in the opinion of management, are necessary to fairly state the Companys financial position and the results of its operations for the periods presented, in accordance with the accounting principles generally accepted in the United States of America and are expressed in US dollars. All adjustments are of a normal recurring nature. 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 Companys fiscal year end is June 30.

These unaudited interim financial statements should be read in conjunction with the Companys audited financial statements and notes thereto included in the Companys fiscal year end June 30, 2012 Form 10-K report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine-month period ended March 31, 2013 are not necessarily indicative of results for the entire year ending June 30, 2013.

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 Companys 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



9


(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 Companys business operations have consisted of online marketing and advertising services since August 26, 2011, to the present.

On November 2, 2011 the President, Edward Manetta, resigned. He was replaced by Brett Everett as President, Secretary, Treasurer and a director.

Note 3 - Summary of Significant Accounting Policies

a)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 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 Companys 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 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 maturity of nine months or less at the time of issuance to be cash equivalents. The Company has no cash equivalents as of March 31, 2013 and June 30, 2012.

d)Financial Instruments

The Companys financial instruments consist principally of cash, amounts receivable, and 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 Companys 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 Companys other financial instruments approximate their current fair values because of their nature or respective relatively short maturity dates.



10


The Companys 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 Companys 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.

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 financials 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



11


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 Companys stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Companys 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 FASBs 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 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 is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15,



12


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): Parents 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, ConsolidationOverall, or Subtopic 830-30, Foreign Currency MattersTranslation 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 is 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 managements intended operations, among other things. Management has defined inception as April 11, 2011. Since inception, the Company has incurred an operating loss of $604,737. The Companys working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has provided financial data since April 11, 2011 in the financial statements, as a means to provide readers of the Companys 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 $604,738 since inception April 11, 2011. At March 31, 2013, the Company had $2,852 cash and $507,237 in current liabilities. Further, the Company incurred a loss of $360,449 for the nine months ended March 31, 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 financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern.



13


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 Companys 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 Companys 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

)

 





 




14


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 life of this software is indefinite.

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 Companys 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 Lights 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.

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). The acquisition was considered a related party transaction as the Companys President and Director was also the President and Director of Cloud Data.

Included in amounts due to related parties as at 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 Company is indebted to shareholders for $4,400 as at March 31, 2013, which is unsecured, non-interest bearing and is due on demand.

Note 8 Due to Former Related Party

As at March 31, 2013, $190,084 (2010 - $190,084) was due to former related party who is a Companys 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.





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Note 9 Convertible Notes Payable




March 31,


June 30,




2013


2012

Asher Note #1


 $                      -


 $                    -

Asher Note #2


               32,500


                       -

Asher Note #3


               32,500


                       -

Asher Note #4


               37,500


                       -


Total Convertible Notes Payable


 $          102,500


 $                    -







Interest Expense


                    927


                       -




 $          103,427


 $                    -


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 $37,500.00 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of July 17, 2012.  The Asher Note also contains customary events of default.

On January 13,2013, the Company recorded debt discount of $37,500, interest expense of $17,542 and a derivative liability of $55,042 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model.


Between January 1 and February 15, 2013, $37,500 in principal and $1,500 in interest of the loan was converted to 6,246,397 shares of common stock, reducing the loan to $0 as of March 31, 2013.  The derivative liability amount of $55,042 was re-classified to additional paid-in capital.  The par value of the common stock is $0.00001.


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, 2012.  The Asher Note also contains customary events of default.  

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.  

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.

Note 10 Common Stock



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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 asset of $140,000 was recorded.

As at March 31, 2013 the Company has authorized 200,000,000 shares of common stock, of which 136,379,742 shares are issued and outstanding.

Note 11 Preferred Stock

As at March 31, 2013, the Company has authorized 200,000,000 shares of preferred stock, of which 110,000 shares are issued and outstanding.

On March 31, 2013, the Company issued one share of preferred stock to settle debt of $165,000.

Note 12 Income Taxes

The Company had no income tax expense during the reported period due to net operating losses.

A reconciliation of income tax expense to the amount computed at the statutory rates is as follows:





March 31,

 



2013


2012

Operating loss for the 9 months ended March 31


$

(360,449) 


$

(147,690) 

Average statutory tax rate


35%


35%

Expected income tax provision


$

(126,157) 


$

(51,692) 

Unrecognized tax loses


(126,157) 


(51,692) 

Income tax expense


$

-  


$

-  



The Company has net operating losses carried forward of approximately $604,738 for tax purposes which will expire in 2025 if not utilized beforehand.















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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.



RESULTS OF OPERATIONS


Working Capital






March 31, 2013

$

June 30, 2012

$

Current Assets

3,920

7,742

Current Liabilities

507,237

564,540

Working Capital (Deficit)

(503,317)

(556,798)


Cash Flows






March 31, 2013

$

March 31, 2012

$

Cash Flows from (used in) Operating Activities

(371,120)

306,319

Cash Flows from (used in) Financing Activities

246,481

(177,158)

Cash Flows from (used in) Investing Activities

119,749

(129,274)

Net Increase (decrease) in Cash During Period

(4,890)

(100)







Results for the Nine Months Ended March 31, 2013 Compared to the Nine Months Ended March 31, 2012


Operating Revenues


The Companys revenues for the nine months ended March 31, 2013, and March 31, 2012, were $12,230and $Nil, respectively.


Expenses


The Companys cost of revenues for the nine months ended March 31, 2013, and March 31, 2012, were $313,879and $147,690 respectively.


Net Loss from Operations




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The Companys net loss from operations for the nine months ended March 31, 2013, and March 31, 2012, was $301,649and $147,690, respectively.


General and Administrative Expenses


General and administrative expenses for the nine months ended March 31, 2013, and March 31, 2012, were $29,927and $21,464, respectively.  General and administrative expenses consisted primarily of consulting fees, officer compensation, interest expense and professional fees.  The increase was primarily attributable to an increase in consulting fees appropriate for normal operations.


Net Loss


Net loss for the nine months ended March 31, 2013, was $360,449 compared with a net loss of $147,690 for the nine months ended March 31, 2012.  The increased loss is due to normal operating expenses but with minimal sales.


Results for the Period from April 11, 2011(inception of development stage) Through March 31, 2013.


Operating Revenues


The Companys revenues for the period from April 11, 2011(inception of development stage) throughMarch 31, 2013 were $12,230.


Expenses


The Companys cost of revenues for the period from April 11, 2011, (inception of development stage) through March 31, 2013, were $558,168.


Net Loss from Operations


The Companys net loss from operationsfor the period from April 11, 2011, (inception of development stage) through March 31, 2013, was $545,938.


General and Administrative Expenses


General and administrative expenses for the period from April 11, 2011, (inception of development stage) through March 31, 2013, were $63,282.  General and administrative expenses consist primarily of consulting fees, officer compensation, management fees, and professional fees appropriate for being a public company.


Net Loss


Net loss for the period from April 11, 2011, (inception of development stage) through March 31, 2013, was $(604,737).


Liquidity and Capital Resources


As at March 31, 2013, the Company had a cash balance and asset total of $2,852 and $156,759 respectively, compared with $7,742 and $283,093 of cash and total assets, respectively, as at June 30, 2012. The decrease in cash was due to normal operating activities whereas the increase in total assets was due to the purchase of inventory for operations.


As at March 31, 2013, the Company had total liabilities of $507,237 compared with $564,540 as at June 30, 2012. The decreasein total liabilities was attributed to the decrease in accounts payable and accrued liabilities.


The overall working capital decreasedfrom $556,798deficit at June 30, 2012, to $503,317 deficit at March 31, 2013.




19


Cashflow from Operating Activities


During the nine monthsended March 31, 2013, cash used in operating activities was $(371,120) compared to $306,319 for the nine months ended March 31, 2012. The increase in the amounts of cash used for operating activities was primarily due to interest expense, an increase in accounts payable and the net loss.


Cashflow from Investing Activities


During the nine monthsended March 31, 2013, cash used in investing activities was $119,749 compared to $(129,274) for the nine months ended March 31, 2012. This change is due to the Company deciding to no longer support mineral claims and therefore took an asset impairment charge equal to the amount of the mineral claims of $124,911.


Cashflow from Financing Activities


During the nine months ended March 31, 2013, cash provided by financing activity was $246,481 compared to $(177,158) for the nine months ended March 31, 2012.The increase in cash provided by financing activities is due to the Companys receiving $246,621 inloans frominvestorsduring the quarter.


Subsequent Events


On April 12, 2013, the Company amended its Articles of Incorporation by filing Amended and Restated Articles of Incorporation to increase the total number of authorized shares from 200,000,000 shares to 950,000,000 shares including 900,000,000 shares of $0.00001 par value common stock.


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.


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.


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.



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.




20


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


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


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


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 upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2013, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on October 2, 2012, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.


Changes in Internal Control over Financial Reporting


Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


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,



21


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


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


1. Quarterly Issuances:


From January 1, 2013 to February 15, 2013, the holder of a convertible note converted a total of $39,000 of principal and interest into 6,246,397 shares of our common stock.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.


2. Subsequent Issuances:


Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4. MINE SAFETY DISCLOSURES


Not applicable.


ITEM 5. OTHER INFORMATION


On January 30, 2013, the Company executed an Unsecured Promissory Note (the Note).  Under the terms of the Asher Note, the Company has borrowed a total of $32,500.00, which accrues interest at an annual rate of 8% and has a maturity date of November 1, 2013.  The Note also contains customary events of default.  


On April 12, 2013, the Company executed an Unsecured Promissory Note (the Note).  Under the terms of the Note, the Company has borrowed a total of $37,500.00, which accrues interest at an annual rate of 8% and has a maturity date of January 16, 2014.  The Note also contains customary events of default.  





22


ITEM 6. EXHIBITS




Exhibit Number

Description of Exhibit

Filing

3.1

Articles of Incorporation

Filed with the SEC on December 12, 2005 as part of our Registration of Securities on Form SB-2.

3.2

Bylaws

Filed with the SEC on December 12, 2005 as part of our Registration of Securities on Form SB-2.

10.1

Joint Venture Agreement by and between the Company and Beijing HuaJu Net Media Technology Co., Ltd., dated March 16, 2007

Filed with the SEC on March 19, 2007 as part of our Current Report on Form 8-K.

10.2

Share Purchase Agreement, by and between the Company and 722868 Ontario Ltd., dated October 5, 2009.

Filed with the SEC on October 9, 2009 as part of our Current Report on Form 8-K.

10.3

Share Exchange Agreement, by and among the Company and Cloud Data Corporation and its shareholders,, dated August 25, 2011

Filed with the SEC on August 30, 2011 as part of our Current Report on Form 8-K.

10.4

Debt Settlement Agreement, by and between the Company and Direct Capital Group, Inc., dated March 31, 2013

Filed with the SEC on February 14, 2013 as part of our Quarterly Report on Form 10-Q.

10.5

Unsecured Promissory note entered into between the Company and Asher Enterprises, dated July 17, 2012

Filed herewith.

10.6

Unsecured Promissory note entered into between the Company and Asher Enterprises, dated Dec 12, 2012

Filed herewith.

10.7

Unsecured Promissory note entered into between the Company and Asher Enterprises, dated Jan 30, 2013

Filed herewith.

10.8

Unsecured Promissory note entered into between the Company and Asher Enterprises, dated April 12, 2013

Filed herewith.

14.1

Code of Ethics

Filed with the SEC on August 11, 2006 as part of our Annual Report on Form 10-KSB.

16.1

Representative Letter from Moen & Company, LLP

Filed with the SEC on September 15, 2006 as part of our Current Report on Form 8-K/A

16.2

Representative Letter from Michael T. Studer, C.P.A., P.C.

Filed with the SEC on May 14, 2009 as part of our Current Report on Form 8-K/A.

16.3

Representative Letter from Moore and Associates

Filed with the SEC on August 11, 2009 as part of our Current Report on Form 8-K.

16.4

Representative Letter from Michael T. Studer, C.P.A., P.C.

Filed with the SEC on December 7, 2009 as part of our Current Report on Form 8-K.

16.5

Representative Letter from Manning Elliott LLP

Filed with the SEC on February 7, 2012 as part of Current Report on Form 8-K.

16.6

Representative Letter from John Kinross-Kennedy

Filed with the SEC on February 14, 2013 as part of our Quarterly Report on Form 10-Q.

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act

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.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

 

 

 



23



101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

101.DEF*

XBRL Taxonomy Extension Definition 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


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


MICROELECTRONICS TECHNOLOGY COMPANY


Dated: May 15, 2013

/s/ Brett Everett

BRETT EVERETT

Its: President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer


In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Dated: May 15, 2013

/s/ Brett Everett

By: BRETT EVERETT

Its: Director



24