CHANGING TECHNOLOGIES, INC. - FORM 10-K

Attached files

file	filename
EX-21 - SUBSIDIARIES OF THE REGISTRANT - CHANGING TECHNOLOGIES, INC.	ex_21.htm
EX-32.1 - SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER - CHANGING TECHNOLOGIES, INC.	ex_32-1.htm
EX-31 - RULE 13A-14(A) CERTIFICATION OF CHIEF EXECUTIVE OFFICER - CHANGING TECHNOLOGIES, INC.	ex_31-1.htm

UNITED STATES

SECURITY AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2015

o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 0-55495

CHANGING TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Nevada		46-3004792
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

777 South Post Oak Lane, Suite 1700 Houston, Texas		77056
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: 713-300-3806

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


Title of Each Class		Name of Each Exchange on which Registered
Common stock, $0.0010 par value		OTC Markets QB

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

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

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

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 þ No o

Indicate by check mark if disclosures of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes þ No o

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	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ
(Do not check is smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes o No þ

The Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter, December 31, 2014 was $12,300,000.

There were 60,000,000 shares of the Registrant’s common stock outstanding as of October 9, 2015.

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CHANGING TECHNOLOGIES, INC.

TABLE OF CONTENTS


Part I	5
Item 1. Business	5
Item 1A. Risk Factors	5
Item 1B. Unresolved Staff Comments	5
Item 2. Properties	5
Item 3. Legal Proceedings	5
Item 4. Mine Safety Disclosures	5

Part II	6
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6. Selected Financial Data	7
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of operations	7
Item 7a. Quantitative and Qualitative Disclosures About Market Risk	10
Item 8. Financial Statements and Supplementary Data	10
Reports of Independent Registered Public Accounting Firms	11
Consolidated Balance Sheets	13
Consolidated Statements of Operations	14
Consolidated Statement of Changes in Shareholders’ Deficit	15
Consolidated Statement of Cash Flows	16
Notes to the Consolidated Financial Statements	17
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	23
Item 9A. Controls and Procedures	23
Item 9B. Other Information	24

Part III	24
Item 10. Directors, Executive Officers and Corporate Governance	24
Item 11. Executive Compensation	26
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	27
Item 13. Certain Relationships and Related Transactions, and Director Independence	28
Item 14. Principal Accounting Fees and Services	28

Part IV	29
Item 15. Exhibits, Financial Statement Schedules	29

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

When used in this report, the terms, “we,” the “Company,” “CHGT,” “our,” and “us” refers to Changing Technologies, Inc., a Nevada corporation.

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PART I

ITEM 1. BUSINESS

Overview

Changing Technologies, Inc., a Nevada corporation (the “Company”), was originally formed to develop apps primarily focused on improving personal and business productivity and health and fitness monitoring. The Company was incorporated on June 18, 2013. Our year-end is June 30.

On June 25, 2014, we formed a new subsidiary, 6^th Dimension Technologies, Inc. (“6D3D”), a Texas corporation to pursue opportunities in the 3D printing market.

On July 25, 2014, 6D3D purchased SumLin Technologies, LLC (“SumLin”), a North Carolina corporation for $150,000 to be paid over a five-month period. SumLin specialized in personalizing 3D printing for consumer end use. As a result of the SumLin acquisition, the Company ceased being a shell company on July 25, 2014.

On July 27, 2014, the Board of Directors authorized ten millions shares of preferred stock.

On August 13, 2014, we issued a five-for-one stock dividend, where each shareholder at the close of business on July 21, 2014 received four additional shares of common stock for every share they held on the record date. The stock dividend was approved by our Board of Directors and stockholders holding a majority of our voting shares

On November 20, 2014, our board of directors designated 1,000,000 shares of Series E preferred stock, with a par value of $0.001 per share. On the same date, we issued 1,000,000 shares of preferred stock to Bordesley Group Corp. (“Bordesley”) for services provided. On the date of the transaction, Bordesley owned 45,000,000 shares of our common stock. They are a beneficial owner, as they own 75% of our outstanding common shares.

On June 24, 2015, we reincorporated from Florida to Nevada. Each shareholder in the Nevada company received one share of common stock for each share of common stock that they held in the Florida company.

Employees and Employment Agreements

The company has one employee. Our employees do not have written agreements. We have no collective bargaining agreements.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We maintain our corporate offices at 777 South Post Oak Lane, Suite 1700, Houston, Texas 77056. Our telephone number is 713-300-3806.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock began trading on the “Over the Counter” Bulletin Board (“OTC”) under the symbol “CHGT” in April 2014. The following table sets forth, for the period indicated, the prices of the common stock in the over-the-counter market, as reported and summarized by OTC Markets Group, Inc. These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown, or commission and may not represent actual transactions. There is an absence of an established trading market for the Company’s common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.


	High		Low
Fiscal Year Ended June 30, 2015
Quarter ended June 30, 2015	$	0.50	$	0.16
Quarter ended March 31, 2015	$	0.82	$	0.16
Quarter ended December 31, 2014	$	1.71	$	0.23
Quarter ended September 30, 2014	$	5.20	$	0.11

Fiscal Year Ended June 30, 2014
Quarter ended June 30, 2014	$	0.11	$	0.11
Quarter ended March 31, 2014	$	0.00	$	0.00
Quarter ended December 31, 2013	$	0.00	$	0.00
Quarter ended September 30, 2013	$	0.00	$	0.00

Holders

As of the date of this filing, there were three holders of record of our common stock.

Dividends

To date, we have not paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock in the foreseeable future. The payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by our Board of Directors.

Common Stock

We are authorized to issue 480,000,000 shares of common stock, with a par value of $0.001. The closing price of our common stock on October 9, 2015, as quoted by OTC Markets Group, Inc., was $0.089. There were 60,000,000 shares of common stock issued and outstanding as of October 9, 2015. All shares of common stock have one vote per share on all matters including election of directors, without provision for cumulative voting. The common stock is not redeemable and has no conversion or preemptive rights. The common stock currently outstanding is validly issued, fully paid and non-assessable. In the event of liquidation of the Company, the holders of common stock will share equally in any balance of the Company’s assets available for distribution to them after satisfaction of creditors and preferred shareholders, if any. The holders of the Company’s common are entitled to equal dividends and distributions per share with respect to the common stock when, as and if, declared by the Board of Directors from funds legally available.

Our Articles of Incorporation, our Bylaws, and the applicable statutes of the state of Nevada contain a more complete description of the rights and liabilities of holders of our securities.

During the year ended June 30, 2015, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

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Non-cumulative voting

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

Securities Authorized for Issuance under Equity Compensation Plans

The following table shows the number of shares of common stock that could be issued upon exercise of outstanding options and warrants, the weighted average exercise price of the outstanding options and warrants, and the remaining shares available for future issuance as of June 30, 2015.


Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance
Equity compensation plans approved by security holders.	—	—	—

Equity compensation plans not approved by security holders.	—	—	—

Total	—	—	—

Preferred Stock

Our authorized preferred stock consists of 20,000,000 shares of $0.001 par value preferred stock. The Company’s common stock ranks senior to all other equity securities, including preferred stock. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purposes.

On November 20, 2014, our board of directors designated 1,000,000 shares of Series E preferred stock, with a par value of $0.001 per share. On the same date, we issued 1,000,000 shares of preferred stock to Bordesley Group Corp. (“Bordesley”) for services provided. On the date of the transaction, Bordesley owned 45,000,000 shares of our common stock. They are considered a beneficial owner, as they own 75% of our outstanding common shares.

Recent Sales of Unregistered Securities

None.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

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The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives, and performance that involve risk, uncertainties, and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

Background of our Company

Changing Technologies, Inc., a Nevada corporation (the “Company”), was incorporated in Florida on June 18, 2013. We reincorporated from Florida to Nevada on June 24, 2015. Our year-end is June 30.

The Company was formed to develop apps primarily focused on improving personal and business productivity and health and fitness monitoring. On June 25, 2014, we formed a new subsidiary, 6^th Dimension Technologies, Inc. (“6D3D”), a Texas corporation to pursue opportunities in the 3D printing market.

Plan of Operations

We believe we do not have adequate funds to execute our business plan for the next twelve months unless we obtain additional funding. However, should we not raise this capital, we will allocate our funding to first assure that all State, Federal and SEC requirements are met.

As of June 30, 2015, we had cash on hand of $1,346.

We intend to pursue capital through public or private financing, as well as borrowing and other sources in order to finance our business activities. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.

Results of Operations

We incurred a net loss of $636,541 for the year ended June 30, 2015. We had a working capital deficit of $223,193 as of June 30, 2015. We do not anticipate having positive net income in the immediate future. Net cash used by operating activities for the year ended June 30, 2015 was $286,461.

We continue to rely on advances to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will continue to have such advances available. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.

Fiscal year ended June 30, 2015 compared to the fiscal year ended June 30, 2014.

General and Administrative Expenses

We recognized general and administrative of $483,812 and $65,087 for the years ended June 30, 2015 and 2014, respectively. We incurred greater professional fees as we began to develop our 3D business plan, accounting for approximately $386,500 of the increase. We also incurred approximately $34,000 of expense related to communication with our shareholders and the public during the year ended June 30, 2015, versus none in the prior year.

Impairment of Intangible Assets

We recognized a loss for impairment of intangible assets of $115, 000 for the year ended June 30, 2015 as a result of the write down of intangible assets acquired in the acquisition of SumLin. There was no impairment loss incurred during the year ended June 30, 2014.

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Interest Expense

Interest expense increased from $0 for the year ended June 30, 2014 to $37,729 for the year ended June 30, 2015. Interest expense for the year ended June 30, 2015 included $19,724 related to the amortization of the discount on convertible notes, compared to $0 for the comparable period of 2014. The remaining increase is the result of interest on convertible notes that we issued during the 2015 fiscal year.

Net Loss

We incurred a net loss of $636,541 for the year ended June 30, 2015 as compared to $65,087 for the comparable period of 2014. The increase in the net loss was primarily the result of increased general and administrative expense, impairment of intangible assets and interest expense on our convertible notes.

Liquidity and Capital Resources

As of the date of this filing, we had yet to generate any revenues from our business operations.

We anticipate needing approximately of $400,000 to fund our operations and to effectively execute our business plan over the next eighteen months. Currently available cash is not sufficient to allow us to commence full execution of our business plan. Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.

During the year ended June 30, 2015, we incurred a net loss of $636,541 and had negative cash flow from operations of $286,461. We raised the cash used in these activities from the sale of common stock and from advances. We currently have negative working capital of $223,193.

As of June 30, 2015, we had $1,346 of cash on hand. This amount of cash will be adequate to fund our operations for less than one month.

We have no known demands or commitments and are not aware of any events or uncertainties as of June 30, 2015 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

Capital Resources

We had no material commitments for capital expenditures as of June 30, 2015 and 2014. However, should we execute our business plan as anticipated, we would incur substantial capital expenditures and require financing in addition to what is required to fund our present operation.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off-Balance Sheet Arrangements

We do not have any 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 is material to investors.

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Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the financial statements are prepared; actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies, which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.

USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

GOING CONERN - The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended June 30, 2015, the Company had a net loss of $636,541 and generated negative cash flow from operating activities of $286,461. In view of these matters, the Company’s ability to continue as a going concern is dependent upon its ability to achieve a level of profitability or to obtain additional capital to finance its operations. The Company intends on financing its future activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

New Accounting Pronouncements

For a description of recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our financial statements, see “Note 3: Significant Accounting Polices: Recently Issued Accounting Pronouncements” in Part II, Item 8 of this Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Changing Technologies, Inc.

Consolidated Financial Statements

June 30, 2015 and 2014

Contents


Report of Independent Registered Public Accounting Firms	11
Consolidated Balance Sheets	13
Consolidated Statements of Operations	14
Consolidated Statement of Changes in Shareholders’ (Deficit)	15
Consolidated Statement of Cash Flows	16
Notes to the Consolidated Financial Statements	17

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REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Changing Technologies, Inc.

We have audited the accompanying consolidated balance sheet of Changing Technologies, Inc. (“the Company”) as of June 30, 2015, and the related statement of operations, stockholders’ deficit, and cash flows for the year then ended. Changing Technologies, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these financial statements based on our audit. The consolidated financial statements of the Company as of June 30, 2014 and for the year then ended, were audited by other auditors, whose report, dated October 13, 2014, expressed an unqualified opinion on those consolidated financial statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Changing Technologies, Inc. as of June 30, 2015, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has had no revenues and income since inception. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2, which includes the raising of additional funds through equity or debt financing, collaborative or other arrangements with corporate partners, licenses or others. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Anton & Chia, LLP

Newport Beach

October 13, 2015

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Messineo & Co, CPAs LLC

2471 N McMullen Booth Rd Ste. 302

Clearwater, FL 33759-1362

T: (518) 530-1122

F: (727) 674-0511

Board of Directors and Stockholders

Changing Technologies, Inc.

We have audited the accompanying consolidated balance sheet of Changing Technologies, Inc., a development stage entity, as of June 30, 2014 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as, evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Changing Technologies, Inc., a development stage entity, as of June 30, 2014 and the results of its consolidated operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred a loss, has not emerged from the development stage, and may be unable to raise necessary equity to implement its’ business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Messineo & Co. CPAs, LLC

Clearwater, Florida

October 13, 2014

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS


	June 30, 2015			June 30, 2014
ASSETS

CURRENT ASSETS
Cash	$	1,346		$	26,000
Total current assets		1,346			26,000

TOTAL ASSETS	$	1,346		$	26,000

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	224,539		$	28,187
Total current liabilities		224,539			28,187

Convertible notes payable, net of discount of $383,083 and $0, respectively		19,724			26,000
Accrued interest payable		18,004			—
TOTAL LIABILITIES		262,267			54,187

STOCKHOLDERS’ DEFICIT
Common Stock, $0.001 par value; 480,000,000 shares authorized; 60,000,000 shares issued and outstanding at June 30, 2015 and June 30, 2014		60,000			60,000
Preferred Stock, $0.001 par value; 20,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding at June 30, 2015 and June 30, 2014, respectively		1,000			—
Additional paid-in capital		381,807			(21,000	)
Accumulated deficit		(703,728	)		(67,187	)
Total stockholders’ deficit		(260,921	)		(28,187	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,346		$	26,000

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

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year ended June 30,
	2015			2014

REVENUE	$	—		$	—

OPERATING EXPENSES
General and administrative expenses		483,812			65,087
Impairment of intangible assets		115,000			—
LOSS FROM OPERATIONS		(598,812	)		(65,087	)

OTHER INCOME (EXPENSE)
Interest expense		(37,729	)		—
Total other income (expense)		(37,729	)		—


NET LOSS	$	(636,541	)	$	(65,087	)

NET LOSS PER COMMON SHARE – Basic and fully diluted	$	(0.01	)	$	(0.00	)

COMMON SHARES OUTSTANDING – Basic and fully diluted		60,000,000			60,000,000

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

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT


	Common Stock			Series E Preferred Stock			Additional Paid In			Accumulated
	Shares	Amount		Shares	Amount		Capital			Deficit			Total

BALANCE, June 18, 2013	45,000,000	$	45,000	—	$	—	$	(36,000	)	$	(2,100	)	$	6,900

Common stock issued for cash	15,000,000		15,000	—		—		15,000			—			30,000
Net loss	—		—	—		—		—			(65,087	)		(65,087	)

BALANCE, June 30, 2014	60,000,000	$	60,000	—	$	—	$	(21,000	)	$	(67,187	)	$	(28,187	)

Preferred stock issued for services	—		—	1,000,000		1,000		—			—			1,000
Discount on issuance of convertible note payable	—		—	—		—		402,807			—			402,807
Net loss	—		—	—		—		—			(636,541	)		(636,541	)

BALANCE, June 30, 2015	60,000,000	$	60,000	1,000,000	$	1,000	$	381,807		$	(703,728	)	$	(260,921	)

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

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS


	Year ended June 30,
	2015			2014

OPERATING ACTIVITIES:
Net loss	$	(636,541	)	$	(65,087	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on convertible note payable		19,724			—
Impairment of intangible assets		115,000			—
Preferred stock issued for services		1,000			—
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		196,352			26,187
Accrued interest payable		18,004			—
NET CASH USED IN OPERATING ACTIVITIES		(286,461	)		(38,900	)

INVESTING ACTIVITIES:
Acquisition of subsidiary		(115,000	)		—
NET CASH USED IN INVESTING ACTIVITIES		(115,000	)		—

FINANCING ACTIVITIES:
Proceeds from issuance of common stock		—			30,000
Proceeds from convertible notes		376,807			26,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		376,807			56,000

NET INCREASE (DECREASE) IN CASH		(24,654	)		17,100

CASH, at the beginning of the year		26,000			8,900

CASH, at the end of the year	$	1,346		$	26,000

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	—		$	—
Taxes	$	—		$	—

Noncash investing and financing transaction:
Refinancing of advances into convertible notes payable	$	402,807		$	—
Beneficial conversion discount on convertible note payable	$	402,807		$	—

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

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CHANGING TECHNOLOGIES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

Note 1. Background Information

Changing Technologies, Inc., a Nevada corporation (the “Company”), was formed to develop apps primarily focused on improving personal and business productivity and health and fitness monitoring. The Company was incorporated in Florida on June 18, 2013. Our year-end is June 30.

On June 25, 2014, we formed a new subsidiary, 6^th Dimension Technologies, Inc. (“6D3D”), a Texas corporation to pursue opportunities in the 3D printing market.

On July 25, 2015, 6D3D purchases SumLin Technologies, LLC (“SumLin”), a North Carolina corporation for $150,000 to be paid over a five-month period. SumLin specialized in personalizing 3D printing for consumer end use. As a result of the SumLin acquisition, the Company ceased being a shell company on July 25, 2014.

Note 2. Going Concern

For the fiscal year ended June 30, 2015, we had a net loss of $636,541 and negative cash flow from operations of $286,461. As of June 30, 2015, we have negative working capital of $223,193.

These factors raise a substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

We do not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, we will be unable to remain in business.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on raising the funds necessary to implement our business plan. Management will continue to seek out debt financing to obtain the capital required to meet our financial obligations. There is no assurance, however, that lenders will continue to advance capital to us or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raises doubts about our ability to continue as a going concern.

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to us that will be used to finance our future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that we will ultimately attain profitability. Ours long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and our ability to achieve adequate profitability and cash flows from operations to sustain its operations.

Note 3. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC and using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

The consolidated financial statements include the accounts and operations of Changing Technologies, Inc., and its wholly owned subsidiaries, 6^th Dimension Technologies, Inc. and SumLin Technologies, LLC (collectively referred to as the “Company”). All material intercompany accounts and transactions are eliminated in consolidation.

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Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. As of June 30, 2015, the Company concluded that it was appropriate to classify advances payable outstanding at June 30, 2014 as a convertible note payable based on the fact that the advances were refinanced into convertible notes payable subsequent to the year ended June 30, 2014. Accordingly, the Company had revised the classification to report these notes under noncurrent liabilities.

Cash

For the purpose of the financial statements, cash equivalents include all highly liquid investments with maturity of three months or less. Cash was $1,346 and $26,000 at June 30, 2015 and June 30, 2014, respectively. The Company did not have any cash equivalents as of June 30, 2015 and 2014.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. During the years ended June 30, 2015 and 2014, the Company recognized an impairment of long-lived assets of $115,000 and $0, respectively. See Note 4.

Beneficial Conversion Discount

The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion.

Deferred Income Taxes and Valuation Allowance

We account for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of June 30, 2015 and June 30, 2014.

Earnings (Loss) per Common Share

We compute basic and diluted earnings per common share amounts in accordance with ASC Topic 260, Earnings per Share. The basic earnings (loss) per common share are calculated by dividing our net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated by dividing our net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no dilutive shares outstanding for any periods reported.

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Financial Instruments

Our balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.

FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


	Level 1 -	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	Level 2 -	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	Level 3 -	Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.

Commitments and Contingencies

We follow subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. As of June 30, 2015 and June 30, 2014, the company has no commitments and contingencies.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Recently Issued Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. We have carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term except as discussed below. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

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In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this guidance remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The June 2014 amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). The Company adopted these amendments effective July 1, 2014 and eliminated the relevant disclosures beginning with the issuance of their financial statements as of and for the period ended September 30, 2014. The adoption of these amendments only changed the disclosures in the financial statements. It had no effect on the Company’s financial position, results of operations or cash flow.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance as to management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company plans to adopt this guidance effective July 1, 2017. The Company is currently evaluating the impact that the adoption of the above guidance could have on the Company’s financial position, results of operations or cash flow.

In November 2014, FASB issued ASU No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination. This ASU is effective for the first transaction within the scope of the accounting alternative that occurs in fiscal years beginning after December 15, 2015 and for interim and annual periods thereafter. If the first transaction occurs in a fiscal year beginning after December 15, 2016, then this is effective for the interim period that includes the date of the transaction and for interim and annual periods thereafter. This ASU will be effective for the Company for the first transaction within the scope of the ASU, which occurs after July 1, 2016. The Company cannot evaluate the impact of the adoption of this ASU unless or until such a transaction occurs.

Note 4. Acquisition of SumLin

On July 25, 2014, 6th Dimension purchased SumLin Technologies, LLC (“SumLin”), a North Carolina limited liability corporation, for $150,000, to be paid over a five-month period. SumLin specializes in personalizing 3D printing for consumer end use. As of June 30, 2015, we have paid $115,000 of the purchase price. As of June 30, 2015, the $115,000 paid for the acquisition has been allocated to intangible assets.

As of June 30, 2015, the Company determined that the intangible assets associated with the acquisition of SumLin were impaired for accounting purposes. As a result, the Company recognized a loss on impairment of intangible assets of $115,000 for the year ended June 30, 2015.

Note 5. Advances from Third Parties

During the year ended June 30, 2015, a third party advanced $376,807 to the Company for working capital. These advances are non-interest bearing and payable on demand. During the same period, the Company refinanced $402,807 of the advances into convertible notes with the same third party (See Note 8.). As of June 30, 2015 and June 30, 2014, there were no advances outstanding.

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Note 6. Income Taxes

There is no current or deferred income tax expense or benefit for the period ended June 30, 2015.

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference for the periods ended June 30, 2015 and 2014 are as follows.


	June 30, 2015			June 30, 2014
Tax benefit at U.S. statutory rate	$	182,539		$	64,987
Less: amortization of beneficial conversion feature		(6,903	)		—
Less: stock based compensation		(350	)		—
Less: valuation allowance		(175,286	)		(64,987	)
Net tax benefit	$	—		$	—

As of June 30, 2015, we had tax net operating loss carryforwards of approximately $609,000.

Note 7. Convertible Notes Payable

Convertible notes payable consist of the following at June 30, 2015 and June 30, 2014:


	June 30, 2015			June 30, 2014
Convertible note, dated September 30, 2014, bearing interest at 10% per annum, maturing September 30, 2016 and convertible into shares of common stock at $0.50 per share	$	152,390		$	—
Convertible note, dated December 31, 2014, bearing interest at 10% per annum, maturing December 31, 2016 and convertible into shares of common stock at $0.41 per share		108,259			—
Convertible note, dated March 31, 2015, bearing interest at 10% per annum, maturing March 31, 2017 and convertible into shares of common stock at $0.09 per share		49,659			—
Convertible note, dated June 30, 2015, bearing interest at 10% per annum, maturing on June 30, 2017 and convertible into share of common stock at a rate of $0.09 per share		92,499			—
Total convertible notes payable	$	402,807		$	—

Less: discount on convertible notes payable		(383,083	)		—
Convertible notes payable, net of discount	$	19,724		$	—

Advances Refinanced into Convertible Promissory Notes

During the year ended June 30, 2015, we signed convertible promissory notes to refinance non-interest bearing advances into convertible notes payable. The convertible promissory notes bear interest at 10% per annum and are payable along with accrued interest. The convertible promissory note and unpaid accrued interest are convertible into common stock at the option of the holder.


Date Issued	Maturity Date	Interest Rate	Conversion Rate		Amount of Note
September 30, 2014	September 30, 2016	10%	$	0.50	$	152,390
December 31, 2014	December 31, 2016	10%		0.41		108,259
March 31, 2015	March 31, 2017	10%		0.09		49,659
June 30, 2015	June 30, 2017	10%		0.09		92,499
Total					$	402,807

The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the note listed above and concluded that the revised terms constituted a debt extinguishment due to the addition of the conversion feature. No gain or loss on the extinguishment was required to be recognized since the carrying amount of the existing debt approximated its fair value.

- 21 -

The Company evaluated the terms of the new note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized beneficial conversion discounts of $152,390 on September 30, 2014, $108,259 on December 31, 2014, $49,659 on March 31, 2015 and $92,499 on June 30, 2015. We recorded the beneficial conversion discount as an increase in additional paid-in capital and a discount to the convertible notes payable. Discounts to the convertible notes payable are being amortized to interest expense over the life of the respective notes. During the years ended June 30, 2015 and 2014, we recorded amortization of discounts on convertible notes payable of $19,724 and $0, respectively.

Note 8. Shareholders’ Equity

Stock Dividend

On August 11, 2014, we issued a five-for-one stock dividend, where each shareholder at the close of business on July 21, 2014 received four additional shares of common stock for every share held on the record date. The stock dividend was approved by our Board of Directors and stockholders holding a majority of our voting shares. Ten millions shares of preferred stock were also authorized.

Preferred Stock

On November 20, 2014, our board of directors designated 1,000,000 shares of Series E preferred stock, with a stated value of $0.001 per share. The Series E preferred stock ranks subordinate to the Company’s common stock as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. The outstanding shares of Series E preferred stock have the right to take action by written consent or vote based on the number of votes equal to twice the number of votes of all outstanding shares of capital stock. As a result, the Series E preferred stock carries 66.67% voting control. On the same date, we issued 1,000,000 shares of preferred stock to Bordesley Group Corp. (“Bordesley”) for services provided. On the date of the transaction, Bordesley owned 45,000,000 shares of our common stock. They are considered a beneficial owner, as they own 75% of our outstanding common shares.

Note 9. Debt Commitments

During the next five years, we will need to repay $402,807 of principal due on our convertible notes. The repayment schedule is as follows:


	Year ending June 30,
	2016		2017		2018		2019		2020		Total
Acquisition of SumLin	$	35,000	$	—	$	—	$	—	$	—	$	35,000
Convertible notes		—		402,807		—		—		—		402,807
Total	$	35,000	$	402,807	$	—	$	—	$	—	$	437,807

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Changes in Accountants

On July 6, 2015, Messineo & Co, CPAs, LLC (“Messineo”) informed us that they had decided not to stand for reappointment as our independent registered accounting firm. Messineo’s report on the financial statements for the year ended June 20, 2014 contained no adverse opinion or disclaimer of opinion, and was not qualified or modified as to audit score or accounting, except that the report contained an explanatory paragraph that stated that there was substantial doubt about our ability to continue as a going concern.

On July 8, 2015, we engaged Anton & Chia, LLP (“Anton & Chia”) of Newport Beach, California as our new independent registered public accounting firm. Prior to the engagement, we did not consult with Anton & Chia regarding (i) the application of accounting principles to a specified transaction, (ii) the type of audit opinion that might be rendered on the Company’s financial statements by Anton & Chia, in either case where written or oral advice provided by Anton & Chia would be an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issues or (iii) any other matter that was the subject of a disagreement between us and our former auditor or was a reportable event (as described in Items 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K, respectively).

Disagreements with Accountants

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Limitations on Systems of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

- 23 -


·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of June 30, 2015, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: lack of a functioning audit committee; lack of a majority of independent members and a lack of a majority of outside directors on our board of directors; inadequate segregation of duties consistent with control objectives; and, management is dominated by a single individual.. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of June 30, 2015

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

ITEM 9B. OTHER INFORMATION

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our sole officer and director will serve until a successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serve until their successor is duly elected and qualified, or until they are removed from office. The board of directors has no nominating, auditing or compensation committees.

The name, address, age and position of our president, secretary/treasurer, and director and vice president is set forth below:


Name	Age	Position
Marco Valenzuela 777 South Post Oak Lane, Suite 1700 Houston, Texas 77056	34	CEO, President and Chairman

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On June 8, 2015, Mr. Omar Durham resigned as our Chief Executive Officer, President, and Director to pursue other interests.

On the same date, Marco Valenzuela was appointed as CEO and a member of the board of directors. Mr. Valenzuela receives a salary of $42,000 per year and does not own any common stock. He does not have an employment contract with the Company.

Biographies

From 2010 to 2011, Mr. Valenzuela worked for several software companies as an environmental modeler and a 3D modeler. The companies that he worked for during that time were Gravity Jack Software, Critical Mass Interactive, Pint Bit Software, Meta 3D and Ronin Films. From 2011 until 2014, Mr. Valenzuela worked as a freelance artist and designer conceptualizing and producing 3D printable product designs for clients in various industries, including entertainment, oil and gas, advertising, education, medicine and jewelry. Since February 2015, Mr. Valenzuela has served as a consultant to the Company guiding its 3D printing subsidiary, 6th Dimension Technologies. Mr. Valenzuela has an associate’s degree in visual communication design from Austin Community College.

Family Relationships

There are no family relationships among our directors, executive officers, or persons nominated to become executive officers or directors.

Involvement in Certain Legal Proceedings

During the past ten (10) years, none of our directors, persons nominated to become directors, executive officers, promoters or control persons was involved in any of the legal proceedings listen in Item 401 (f) of Regulation S-K.

Arrangements

There are no arrangements or understandings between an executive officer, director or nominee and any other person pursuant to which he was or is to be selected as an executive officer or director.

Committees of the Board of Directors

Our sole director has not established any committees, including an Audit Committee, a Compensation Committee, or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by our sole director. Because we do not have any independent directors, our sole director believes that the establishment of committees of the Board would not provide any benefits to our company and could be considered more form than substance.

We do not have a policy regarding the consideration of any director candidates that may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our sole director established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our sole director has not considered or adopted any of these policies, as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future.

While there have been no nominations of additional directors proposed, in the event such a proposal is made, all current members of our Board will participate in the consideration of director nominees.

Our sole director is not an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:


·	understands generally accepted accounting principles and financial statements,

·	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,

·	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,

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·	understands internal controls over financial reporting, and

·	understands audit committee functions

Our Board of Directors is comprised of solely of Mr. Valenzuela who is involved in our day-to-day operations. We would prefer to have an audit committee financial expert on our board of directors. As with most small, early stage companies until such time our company further develops its business, achieves a stronger revenue base and has sufficient working capital to purchase directors and officers insurance, the Company does not have any immediate prospects to attract independent directors. When the Company is able to expand our Board of Directors to include one or more independent directors, the Company intends to establish an Audit Committee of our Board of Directors. It is our intention that one or more of these independent directors will also qualify as an audit committee financial expert. Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and the Company is not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.

WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND THE COMPANY HAS NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST, AND SIMILAR MATTERS.

Code of Business Conduct and Ethics

We have adopted a code of ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely, and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence to the provisions of the code of ethic.

ITEM 11. EXECUTIVE COMPENSATION

Mr. Valenzuela is paid $42,000 per year for his services to the company. He does not have a written employment agreement with the company.

The table below summarizes all compensation awards to, earned by, or paid to our named executive officer for all service rendered in all capacities to us for the fiscal years ended June 30, 2015 and 2014.

SUMMARY COMPENSATION TABLE


Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation ($)	All Other Compensation ($)	Total ($)

Marco Valenzuela	2015	$ 13,080	—	—	—	—	—	—	$ 13,080
CEO	2014	—	—	—	—	—	—	—	—
	2013	—	—	—	—	—	—	—	—

Omar Durham	2015	$ 120,000	$ 2,000	—	—	—	—	—	$ 122,000
Former CEO	2014	—	—	—	—	—	—	—	—
	2013	—	—	—	—	—	—	—	—

Matt Egna	2015	—	—	—	—	—	—	—	—
Former CEO	2014	—	—	—	—	—	—	—	—
	2013	—	—	—	—	—	—	—	—

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OUTSTANDING EQUITY AWARDS AT JUNE 30, 2015

Option Awards

Stock Awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

Number of Shares of Stock That Have Not Vested (#)

Market Value of Shares of Stock That Have Not Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: market or Payout Value of Unearned Shares or Other Rights That Have Not Vested ($)

Marco Valenzuela

—

Omar Durham

—

Matt Egna

—

Employment Agreements & Retirement Benefits

None of our executive officers is subject to employment agreements, but we may enter into such agreements with them in the future. We have no plans providing for the payment of any retirement benefits.

Director Compensation

Directors receive no compensation for serving on the Board. We have no non-employee directors.

Our Board of Directors is comprised of Marco Valenzuela. Mr. Valenzuela also serves as the CEO of the Company. None of our directors has or had a compensation arrangement with the Company for director services, nor have any of them been compensated for director services since the Company’s inception.

We reimburse our directors for all reasonable ordinary and necessary business related expenses, but we did not pay director’s fees or other cash compensation for services rendered as a director in the year ended June 30, 2015 to any of the individuals serving on our Board during that period. We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. We may pay fees for services rendered as a director when and if additional directors are appointed to the Board of Directors.

Director Independence

We do not currently have any independent directors and we do not anticipate appointing additional directors in the foreseeable future. If we engage further directors and officers, however, we plan to develop a definition of independence.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

We do not currently have a stock option plan in favor of any director, officer, consultant, or employee of our company. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to our sole director and officer since our inception; accordingly, no stock options have been granted or exercised by our sole director and officer since we were founded.

The following table sets forth certain information as of October 9, 2015, with respect to the beneficial ownership of our common stock by each beneficial owner of more than 5% of the outstanding shares of common stock of the Company, each director, each executive officer named in the “Summary Compensation Table” and all executive officers and directors of the Company as a group, and sets forth the number of shares of common stock owned by each such person and group. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares.

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Name of Beneficial Owner	Number of Shares Beneficially Owned	Percentage of Outstanding Common Stock Owned

Bordesley Group Corp	45,000,000	75	%
Calle 65 Este
San Francisco Local 35
Panama City, Republic of Panama

Marco Valenzuela	—	0	%

All directors and executive officers as a group (1) person.	—	0	%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

None.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table summarize the fees billed to the Company by its independent accountants for the years ended June 30, 2015 and 2014:


	2015		2014

Audit Fees	$	9,500	$	6,800

Audit Related Fees (1)	$	—	$	—

Tax Fees (2)	$	—	$	—

All Other Fees (3)	$	—	$	—

Total Fees	$	9,500	$	6,800

Notes to the Accountants Fees Table:


(1)	Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees.”

(2)	Consists of fees for professional services rendered by our principal accountants for tax related services.

(3)	Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees” above.

As part of its responsibility for oversight of the independent registered public accountants, the Board has established a pre-approval policy for engaging audit and permitted non-audit services provided by our independent registered public accountants. In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Board. All of the services provided by Messineo & Co, CPAs, LLC described above were approved by our Board.

The Company’s principal accountant did not engage any other persons or firms other than the principal accountant’s full-time, permanent employees.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES


3.1	Articles of Incorporation (1)

3.2	Bylaws (1)

14.1	Code of ethics (1)

21	Subsidiaries of the Registrant (2)

31.1	Rule 13a-14(a) Certification of Chief Executive Officer (2)

32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer and Chief Financial Officer (2)

101	XBRL Interactive Data (2), (3)

______________


(1)	Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on July 29, 2013.

(2)	Filed or furnished herewith.

(3)	In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Annual Report on Form 10-K shall be deemed “furnished” and not “filed.”

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Changing Technologies, Inc.


Date: October 13, 2015	BY: /s/ Marco Valenzuela
	Marco Valenzuela
	CEO, President and Chairman

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CHANGING TECHNOLOGIES, INC. - FORM 10-K - October 13, 2015

Attached files

CHANGING TECHNOLOGIES, INC. Reports