Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Feb. 11, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Nano Labs Corp. | |
Entity Central Index Key | 1497572 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -24 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 241,192,385 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2015 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
CURRENT ASSETS | ||
Cash | ||
Loan Receivable | 104,000 | 101,480 |
Total current assets | 104,000 | 101,480 |
Total Assets | 104,000 | 101,480 |
CURRENT LIABILITIES: | ||
Accounts payable | 186,170 | 160,204 |
Cash overdraft | 133 | 1 |
Notes payable | 3,000 | |
Convertible notes payable | 950,294 | 1,230,950 |
Derivative Liabilities | 38,619,785 | 56,674,290 |
Accrued interest payable | ||
Total current liabilities | 39,759,382 | 58,065,445 |
Total liabilities | 39,759,382 | 58,065,445 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock: $0.001 par value; 10,000,000 shares authorized none issued or outstanding at December 31, 2014 and June 30, 2014, respectively. | ||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,385 and 103,125,000 shares issued and outstanding at December 31, 2014 and June 30, 2014, respectively. | 241,192 | 103,125 |
Common stock issuable | ||
Additional paid in capital | 18,409,312 | 482,356 |
Accumulated deficit | -58,305,886 | -58,549,446 |
Total stockholders' deficit | -39,655,382 | -57,963,965 |
Total liabilities and stockholders' deficit | $104,000 | $101,480 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
STOCKHOLDERS' DEFICIT | ||
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 241,192,385 | 103,125,000 |
Common Stock, Shares Outstanding | 241,192,385 | 103,125,000 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statements Of Operations | ||||
Sales | ||||
Cost of goods sold | ||||
Gross Margin | ||||
Operating Expenses | ||||
Consulting | 33,494 | 136,965 | ||
General and administrative | 25,978 | 51,910 | 46,900 | 90,730 |
Professional Fees | 3,590 | 34,407 | 8,950 | 45,367 |
Travel | 439 | 14,007 | 1,022 | 21,957 |
Wages | 17,732 | 22,732 | ||
Total operating expenses | 30,007 | 151,550 | 56,872 | 317,751 |
Loss from Operations | -30,007 | -151,550 | -56,872 | -317,751 |
Other income (Expense) | ||||
Interest expense- derivative | -4,575,263 | -5,745,424 | 297,912 | -17,368,457 |
Loss on sale to subsidiary | ||||
Other (income) expenses | -4,575,263 | -5,745,424 | 297,912 | -17,368,457 |
Profit (Loss) | -4,605,270 | -5,896,974 | 241,040 | -17,686,208 |
Interest Income | 1,260 | 2,520 | ||
Net Profit (Loss) | ($4,604,010) | ($5,896,974) | $243,560 | ($17,686,208) |
Net income (loss) per common share-basic | ($0.02) | ($0.03) | ($0.09) | |
Weighted average common shares outstanding- basic | 241,192,385 | 204,125,000 | 204,704,589 | 187,476,648 |
STATEMENTS_OF_STOCKHOLDERS_DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT (USD $) | Common Stock | Common Stock Issuable | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Jun. 30, 2013 | $103,125 | $101,000 | $381,356 | ($10,779,491) | ($10,194,010) |
Beginning Balance, Shares at Jun. 30, 2013 | 103,125,000 | ||||
Shares issed for purchase agreement, Amount | 101,000 | -101,000 | |||
Shares issed for purchase agreement, Shares | 101,000,000 | ||||
Shares cancelled, Amount | -101,000 | 101,000 | |||
Shares cancelled, Shares | -101,000,000 | ||||
Net loss | -47,769,955 | -47,769,955 | |||
Ending Balance, Amount at Jun. 30, 2014 | 103,125 | 482,356 | -58,549,446 | -57,963,965 | |
Ending Balance, Shares at Jun. 30, 2014 | 103,125,000 | ||||
Shares issued for JV, Amount | 100,000 | -100,000 | |||
Shares issued for JV, Shares | 100,000,000 | ||||
Shares issued for debt conversion, Amount | 38,067 | 270,363 | 308,430 | ||
Shares issued for debt conversion, Shares | 38,067,385 | ||||
Derivative liability reclassified | 17,756,593 | 17,756,593 | |||
Net loss | 243,560 | 243,560 | |||
Ending Balance, Amount at Dec. 31, 2014 | $241,192 | $18,409,312 | ($58,305,886) | ($39,655,382) | |
Ending Balance, Shares at Dec. 31, 2014 | 241,192,385 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $243,560 | ($17,686,208) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Derivative interest | -297,912 | 17,368,457 |
Debt forgiveness | ||
Changes in operating assets and liabilities: | ||
(Increase) in Notes Receivable | -2,520 | |
Related party payables | ||
Accounts payable and accrued expenses | 25,966 | 16,328 |
NET CASH USED IN OPERATING ACTIVITIES | -30,906 | -301,423 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loan Received and Cash overdraft | 3,132 | |
Proceeds from convertible notes payable | 27,774 | 280,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 30,906 | 280,000 |
NET CHANGE IN CASH | -21,423 | |
Cash at beginning of the period | 101,480 | |
Cash at end of the period | 80,057 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Interest paid | ||
Income tax paid |
Organization_and_Description_o
Organization and Description of Business | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations. |
It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year. | |
Nano Labs Corp. (the “Company”), formerly Colorado Ceramic Tile, Inc., was incorporated in the State of Colorado on March 27, 1995. | |
The Company currently intends to acquire for its own use or licensing to others coatings and laminates made from microscopic particles known as “nanotechnology.” |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | |
Dec. 31, 2014 | ||
Notes to Financial Statements | ||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (a) Use of Estimates | |
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. | ||
(b) Cash and Cash Equivalents | ||
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2014 and June 30, 2014, the Company had no cash equivalents. | ||
(c) Loss Per Share | ||
In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | ||
(d) Operating Leases | ||
The Company leases approximately 300 square feet of space under a annual lease signed in November 2014 The rent expense under this lease for the six months ended December 31, 2014 was $2,400. | ||
(e) Business Segments | ||
The Company operates in one segment and therefore segment information is not presented. | ||
(f) Revenue Recognition | ||
The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. | ||
(g) Fair Value of Financial Instruments | ||
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. | ||
The guidance also establishes a fair value hierarchy for measurements of fair value as follows: | ||
· | Level 1 - quoted market prices in active markets for identical assets or liabilities. | |
· | Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
· | Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |
The Company's financial instruments consist of accounts payable, accrued expenses, and convertible notes payable - The carrying amount of the Company's financial instruments approximates their fair value as of December 31, 2014 and June 30, 2014, due to the short-term nature of these instruments. | ||
The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. | ||
(h) Derivative Financial Instruments | ||
Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | ||
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. | ||
(i) Stock-Based Compensation - Non Employees | ||
Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | ||
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). | ||
Pursuant to ASC Section 505-50-30, 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. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | ||
· | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.The Company uses historical data to estimate holder’s expected exercise behavior.If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | |
· | Expected volatility of the entity’s shares and the method used to estimate it.Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |
· | Expected annual rate of quarterly dividends.An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | |
· | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | |
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. | ||
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised. | ||
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. | ||
(j) Recent Accounting Pronouncements | ||
In June 2014, FASB issued Accounting Standards Update (“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 update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first 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). | ||
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. | ||
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. | ||
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Convertible_Notes_Payable
Convertible Notes Payable | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 3 - CONVERTIBLE NOTES PAYABLE | The Company has 15 convertible notes equaling $950,294. The notes are convertible at 50% of the market price of the stock. The Company has calculated a derivative liability which at December 31, 2014 was $38,619,785 under the Black Sholes module. The assumptions used were a volatility rate of 654.31%, a risk free interest factor of .20% and an expected return of 0 to 1 year. |
Convertible notes that ceased in becoming derivative liabilities are charged to additional paid in capital. |
Notes_Payable
Notes Payable | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 3A - NOTES PAYABLE | In the second quarter of the year the Company received $3,000 in loans due upon demand without interest for working capital purposes. |
Going_Concern
Going Concern | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 4 - GOING CONCERN | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. |
As of December 31, 2014, the Company had an accumulated deficit of $58,305,886, and negative equity of $39,655,382. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern. | |
While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. | |
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note_Receivable
Note Receivable | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 5 - NOTE RECEIVABLE | The Company has loaned an entity $100,000 with interest at 5% in March 2014. Repayment is due within one year. |
Commitments_and_Contigencies
Commitments and Contigencies | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 6 - COMMITMENTS & CONTIGENCIES | Office Lease |
On November 1, 2014, the Company signed a one year lease to occupy office space in suite 916 of the Ford Building at 615 Griswold, Detroit, Michigan. The lease requires a $400 deposit and monthly payments of $400. | |
Minimum future rental payments under the agreement are as follows: | |
2014- $800 | |
2015- $4,000 | |
Consulting Agreement | |
There are no consulting or employment agreements in force. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 7 - STOCKHOLDERS' EQUITY | Common and preferred shares authorized |
The Company is authorized 500,000,000 shares of common stock with $0.001 par value and 10,000,000 shares of preferred stock with $0.001 par value. | |
Common shares issued | |
In August of 2014 the Company issued 100,000,000 shares of common stock for a joint venture owned in part by a related party. The Company placed no value on this agreement which was charged to additional paid in capital. The Company also issued 38,067,385 shares for reduction of convertible debt of $308,430. |
Stock_Options
Stock Options | 6 Months Ended | ||
Dec. 31, 2014 | |||
Notes to Financial Statements | |||
NOTE 8 - STOCK OPTIONS | 1 | On October 1, 2013 the Company board of directors approved a board resolution authorizing the Company to issue a total of 15,000,000 stock options; 2,000,000 of these options were issued to four consultants for services to the Company. The options begin vesting on October 1, 2013 and terminate October 1, 2015. The stock options have an option price of .40. |
Income_Tax
Income Tax | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
NOTE 9 - INCOME TAX | Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | ||||||||
Net deferred tax assets consist of the following components as of June 30, 2014 and 2013: | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
Deferred tax asset - non-current | |||||||||
NOL carryover | $ | 399,748 | $ | 231,126 | |||||
Less valuation allowance | (399,748 | ) | (231,126 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | - | $ | - | |||||
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended June 30, 2014 and 2013 due to the following: | |||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
Book income | $ | (47,769,955 | ) | $ | (10,194,010 | ) | |||
Other nondeductible expenses | 47,226,014 | 9,448,441 | |||||||
Valuation allowance | 543,941 | 745,569 | |||||||
At June 30, 2014, the Company had net operating loss carry forwards of approximately $1,289,500 that may be offset against future taxable income from the year 2014 to 2034. No tax benefit has been reported in the June 30, 2014 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. | |||||||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years. |
Restatement_of_Financial_State
Restatement of Financial Statements | 6 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Notes to Financial Statements | |||||||||||||
NOTE 10 - RESTATEMENT OF FINANCIAL STATEMENTS | The Company has restated its Balance Sheet as of September 30, 2014, its Statement of Operations for the three months ended September 30, 2014, its Statement of Cash Flows for the period ended September 30, 2014, and it’s Statements of Stockholders’ Equity to account properly for an investment in a JV. The Company also recalculated the derivative liability related to convertible debt outstanding. | ||||||||||||
The following are previously recorded and restated balances as of September 30, 2014 and for the period ended September 30, 2014. | |||||||||||||
NANO LABS CORP. | |||||||||||||
BALANCE SHEETS | |||||||||||||
30-Sep-14 | |||||||||||||
Originally | |||||||||||||
ASSETS | Reported | Restated | Difference | ||||||||||
Current Assets: | |||||||||||||
Cash | 1,981 | 1,981 | |||||||||||
Loan Receivable | $ | 101,480 | $ | 102,740 | $ | 1,260 | |||||||
Total current assets | 103,461 | 104,721 | 1,260 | ||||||||||
Investment in JV | 155,000 | - | (155,000 | ) | |||||||||
Total Assets | $ | 258,461 | $ | 104,721 | (153,740 | ) | |||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||||
CURRENT LIABILITIES: | |||||||||||||
Accounts payable | $ | 161,276 | $ | 161,276 | - | ||||||||
Convertible notes payable | 950,294 | 950,294 | - | ||||||||||
Derivative Liability | 46,785,958 | 34,044,522 | (12,741,436 | ) | |||||||||
Accrued interest payable | - | - | - | ||||||||||
47,897,528 | 35,156,092 | (12,741,436 | ) | ||||||||||
Total current liabilities | 47,897,528 | 35,156,092 | (12,741,436 | ) | |||||||||
STOCKHOLDERS' DEFICIT | |||||||||||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 | - | - | - | ||||||||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,38 shares issued and outstanding | 241,192 | 241,192 | - | ||||||||||
Common stock issuable | - | - | - | ||||||||||
Additional paid-in capital | 807,719 | 18,409,312 | 17,601,593 | ||||||||||
Accumulated deficit | (48,687,978 | ) | (53,701,875 | ) | (5,013,897 | ) | |||||||
Total stockholders' deficit | (47,639,067 | ) | (35,051,371 | ) | 12,587,696 | ||||||||
Total liabilities and stockholders' deficit | $ | 258,461 | $ | 104,721 | (153,740 | ) | |||||||
The accompanying notes are an integral part of these financial statements. | |||||||||||||
NANO LABS CORP. | |||||||||||||
STATEMENTS OF OPERATIONS | |||||||||||||
For the period ended September 30, 2014 | |||||||||||||
Originally | |||||||||||||
Reported | Restated | Difference | |||||||||||
Sales | $ | - | $ | - | - | ||||||||
Cost of goods sold | - | - | - | ||||||||||
Gross Margin | - | - | - | ||||||||||
Operating Expenses | |||||||||||||
General and administrative | 20,922 | 20,922 | - | ||||||||||
Professional Fees | 5,360 | 5,360 | - | ||||||||||
Travel | 582 | 582 | - | ||||||||||
Total operating expenses | 26,864 | 26,864 | - | ||||||||||
Loss from Operations | (26,864 | ) | (26,864 | ) | - | ||||||||
Other Income (Expenses) | |||||||||||||
Derivative | 9,888,332 | 4,873,175 | (5,015,157 | ) | |||||||||
Interest | - | 1,260 | 1,260 | ||||||||||
Other income (expenses) | 9,888,332 | 4,874,435 | (5,013,897 | ) | |||||||||
Income before Income Taxes | 9,861,468 | 4,847,571 | (5,013,897 | ) | |||||||||
Provision for income tax | - | - | - | ||||||||||
Net Income | $ | 9,861,468 | $ | 4,847,571 | (5,013,897 | ) | |||||||
- | - | - | |||||||||||
The accompanying notes are an integral part of these financial statements. | |||||||||||||
NANO LABS CORP. | |||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||
For the Three Months September 30, 2014 | |||||||||||||
Originally | |||||||||||||
Reported | Restated | Difference | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net income | $ | 9,861,468 | $ | 4,847,571 | (5,013,897 | ) | |||||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||||||||
Derivative interest | (9,888,332 | ) | (4,873,175 | ) | 5,015,157 | ||||||||
Debt forgiveness | - | - | - | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Discontinued operations | - | - | - | ||||||||||
(Increase) in Notes Receivable | - | (1,260 | ) | (1,260 | ) | ||||||||
Accounts payable and accrued expenses | 1,072 | 1,072 | - | ||||||||||
NET CASH USED IN OPERATING ACTIVITIES | (25,792 | ) | (25,792 | ) | - | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Cash overdraft | (1 | ) | (1 | ) | |||||||||
Proceed from convertible notes payable | 27,774 | 27,774 | - | ||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 27,774 | 27,773 | (1 | ) | |||||||||
NET CHANGE IN CASH | 1,982 | 1,981 | (1 | ) | |||||||||
Cash at beginning of the period | - | - | - | ||||||||||
Cash at end of the period | $ | 1,982 | $ | 1,981 | (1 | ) | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||||||||||
Interest paid | $ | - | $ | - | $ | - | |||||||
Income tax paid | $ | - | $ | - | $ | - | |||||||
The accompanying notes are an integral part of these financial statements. | |||||||||||||
Subsequent_Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
NOTE 11 - SUBSEQUENT EVENTS | Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | |
Dec. 31, 2014 | ||
Summary Of Significant Accounting Policies Policies | ||
Use of estimates | In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest. | |
Cash and Cash Equivalents | The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At December 31, 2014 and June 30, 2014, the Company had no cash equivalents. | |
Loss Per Share | In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share” basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. | |
Operating Leases | The Company leases approximately 300 square feet of space under a annual lease signed in November 2014 The rent expense under this lease for the six months ended December 31, 2014 was $2,400. | |
Business Segments | The Company operates in one segment and therefore segment information is not presented. | |
Revenue recognition | The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured. | |
Fair value of financial instruments | The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. | |
The guidance also establishes a fair value hierarchy for measurements of fair value as follows: | ||
· | Level 1 - quoted market prices in active markets for identical assets or liabilities. | |
· | Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
· | Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |
The Company's financial instruments consist of accounts payable, accrued expenses, and convertible notes payable - The carrying amount of the Company's financial instruments approximates their fair value as of December 31, 2014 and June 30, 2014, due to the short-term nature of these instruments. | ||
The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. | ||
Derivative Financial Instruments | Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. | |
Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivative instruments such as warrants, are also valued using the Black-Scholes option-pricing model. | ||
Stock-Based Compensation - Non Employees | Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services | |
The Company accounts for equity instruments issued to parties other than employees for acquiring goods or services under guidance of Sub-topic 505-50 of the FASB Accounting Standards Codification (“Sub-topic 505-50”). | ||
Pursuant to ASC Section 505-50-30, 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. The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur. If the Company is a newly formed corporation or shares of the Company are thinly traded the use of share prices established in the Company’s most recent private placement memorandum (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | ||
The fair value of share options and similar instruments is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows: | ||
· | Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.The Company uses historical data to estimate holder’s expected exercise behavior.If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. | |
· | Expected volatility of the entity’s shares and the method used to estimate it.Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market. | |
· | Expected annual rate of quarterly dividends.An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments. | |
· | Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments. | |
Pursuant to ASC paragraph 505-50-25-7, if fully vested, non-forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services (no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation on the part of the counterparty to earn the equity instruments, a measurement date has been reached. A grantor shall recognize the equity instruments when they are issued (in most cases, when the agreement is entered into). Whether the corresponding cost is an immediate expense or a prepaid asset (or whether the debit should be characterized as contra-equity under the requirements of paragraph 505-50-45-1) depends on the specific facts and circumstances. Pursuant to ASC paragraph 505-50-45-1, a grantor may conclude that an asset (other than a note or a receivable) has been received in return for fully vested, non-forfeitable equity instruments that are issued at the date the grantor and grantee enter into an agreement for goods or services (and no specific performance is required by the grantee in order to retain those equity instruments). Such an asset shall not be displayed as contra-equity by the grantor of the equity instruments. The transferability (or lack thereof) of the equity instruments shall not affect the balance sheet display of the asset. This guidance is limited to transactions in which equity instruments are transferred to other than employees in exchange for goods or services. Section 505-50-30 provides guidance on the determination of the measurement date for transactions that are within the scope of this Subtopic. | ||
Pursuant to Paragraphs 505-50-25-8 and 505-50-25-9, an entity may grant fully vested, non-forfeitable equity instruments that are exercisable by the grantee only after a specified period of time if the terms of the agreement provide for earlier exercisability if the grantee achieves specified performance conditions. Any measured cost of the transaction shall be recognized in the same period(s) and in the same manner as if the entity had paid cash for the goods or services or used cash rebates as a sales discount instead of paying with, or using, the equity instruments. A recognized asset, expense, or sales discount shall not be reversed if a share option and similar instrument that the counterparty has the right to exercise expires unexercised. | ||
Pursuant to ASC paragraph 505-50-30-S99-1, if the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued until they vest). Consequently, there would be no recognition at the measurement date and no entry should be recorded. | ||
Recent Accounting Pronouncements | In June 2014, FASB issued Accounting Standards Update (“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 update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first 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). | |
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. | ||
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. | ||
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable. |
Income_Tax_Tables
Income Tax (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Tables | |||||||||
Deferred tax assets | Net deferred tax assets consist of the following components as of June 30, 2014 and 2013: | ||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
Deferred tax asset - non-current | |||||||||
NOL carryover | $ | 399,748 | $ | 231,126 | |||||
Less valuation allowance | (399,748 | ) | (231,126 | ) | |||||
Deferred tax assets, net of valuation allowance | $ | - | $ | - | |||||
U.S. federal income tax rate to pretax income from continuing operations | The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended June 30, 2014 and 2013 due to the following: | ||||||||
June 30, | |||||||||
2014 | 2013 | ||||||||
Book income | $ | (47,769,955 | ) | $ | (10,194,010 | ) | |||
Other nondeductible expenses | 47,226,014 | 9,448,441 | |||||||
Valuation allowance | 543,941 | 745,569 |
Restatement_of_Financial_State1
Restatement of Financial Statements (Tables) | 6 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Restatement Of Financial Statements Tables | |||||||||||||
Restatement of Financial Statements | The following are previously recorded and restated balances as of September 30, 2014 and for the period ended September 30, 2014. | ||||||||||||
NANO LABS CORP. | |||||||||||||
BALANCE SHEETS | |||||||||||||
30-Sep-14 | |||||||||||||
Originally | |||||||||||||
ASSETS | Reported | Restated | Difference | ||||||||||
Current Assets: | |||||||||||||
Cash | 1,981 | 1,981 | |||||||||||
Loan Receivable | $ | 101,480 | $ | 102,740 | $ | 1,260 | |||||||
Total current assets | 103,461 | 104,721 | 1,260 | ||||||||||
Investment in JV | 155,000 | - | (155,000 | ) | |||||||||
Total Assets | $ | 258,461 | $ | 104,721 | (153,740 | ) | |||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||||
CURRENT LIABILITIES: | |||||||||||||
Accounts payable | $ | 161,276 | $ | 161,276 | - | ||||||||
Convertible notes payable | 950,294 | 950,294 | - | ||||||||||
Derivative Liability | 46,785,958 | 34,044,522 | (12,741,436 | ) | |||||||||
Accrued interest payable | - | - | - | ||||||||||
47,897,528 | 35,156,092 | (12,741,436 | ) | ||||||||||
Total current liabilities | 47,897,528 | 35,156,092 | (12,741,436 | ) | |||||||||
STOCKHOLDERS' DEFICIT | |||||||||||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 | - | - | - | ||||||||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,38 shares issued and outstanding | 241,192 | 241,192 | - | ||||||||||
Common stock issuable | - | - | - | ||||||||||
Additional paid-in capital | 807,719 | 18,409,312 | 17,601,593 | ||||||||||
Accumulated deficit | (48,687,978 | ) | (53,701,875 | ) | (5,013,897 | ) | |||||||
Total stockholders' deficit | (47,639,067 | ) | (35,051,371 | ) | 12,587,696 | ||||||||
Total liabilities and stockholders' deficit | $ | 258,461 | $ | 104,721 | (153,740 | ) | |||||||
The accompanying notes are an integral part of these financial statements. | |||||||||||||
NANO LABS CORP. | |||||||||||||
STATEMENTS OF OPERATIONS | |||||||||||||
For the period ended September 30, 2014 | |||||||||||||
Originally | |||||||||||||
Reported | Restated | Difference | |||||||||||
Sales | $ | - | $ | - | - | ||||||||
Cost of goods sold | - | - | - | ||||||||||
Gross Margin | - | - | - | ||||||||||
Operating Expenses | |||||||||||||
General and administrative | 20,922 | 20,922 | - | ||||||||||
Professional Fees | 5,360 | 5,360 | - | ||||||||||
Travel | 582 | 582 | - | ||||||||||
Total operating expenses | 26,864 | 26,864 | - | ||||||||||
Loss from Operations | (26,864 | ) | (26,864 | ) | - | ||||||||
Other Income (Expenses) | |||||||||||||
Derivative | 9,888,332 | 4,873,175 | (5,015,157 | ) | |||||||||
Interest | - | 1,260 | 1,260 | ||||||||||
Other income (expenses) | 9,888,332 | 4,874,435 | (5,013,897 | ) | |||||||||
Income before Income Taxes | 9,861,468 | 4,847,571 | (5,013,897 | ) | |||||||||
Provision for income tax | - | - | - | ||||||||||
Net Income | $ | 9,861,468 | $ | 4,847,571 | (5,013,897 | ) | |||||||
- | - | - | |||||||||||
The accompanying notes are an integral part of these financial statements. | |||||||||||||
NANO LABS CORP. | |||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||
For the Three Months September 30, 2014 | |||||||||||||
Originally | |||||||||||||
Reported | Restated | Difference | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||
Net income | $ | 9,861,468 | $ | 4,847,571 | (5,013,897 | ) | |||||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||||||||
Derivative interest | (9,888,332 | ) | (4,873,175 | ) | 5,015,157 | ||||||||
Debt forgiveness | - | - | - | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Discontinued operations | - | - | - | ||||||||||
(Increase) in Notes Receivable | - | (1,260 | ) | (1,260 | ) | ||||||||
Accounts payable and accrued expenses | 1,072 | 1,072 | - | ||||||||||
NET CASH USED IN OPERATING ACTIVITIES | (25,792 | ) | (25,792 | ) | - | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||
Cash overdraft | (1 | ) | (1 | ) | |||||||||
Proceed from convertible notes payable | 27,774 | 27,774 | - | ||||||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 27,774 | 27,773 | (1 | ) | |||||||||
NET CHANGE IN CASH | 1,982 | 1,981 | (1 | ) | |||||||||
Cash at beginning of the period | - | - | - | ||||||||||
Cash at end of the period | $ | 1,982 | $ | 1,981 | (1 | ) | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||||||||||
Interest paid | $ | - | $ | - | $ | - | |||||||
Income tax paid | $ | - | $ | - | $ | - |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 6 Months Ended | |||
Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | |
Summary Of Significant Accounting Policies Details Narrative | ||||
Rent expense | $2,400 | |||
Cash equivalents | $80,057 | $101,480 |
Convertible_Notes_Payable_Deta
Convertible Notes Payable (Details Narrative) (USD $) | 6 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2014 | |
Convertible Notes Payable Details Narrative | ||
Derivative Liabilities | $38,619,785 | |
Convertible notes payable | $950,294 | $1,230,950 |
Number of convertible notes | 15 | |
Convertible notes discount | 50.00% | |
Volatility rate | 654.31% | |
Risk free interest factor | 0.20% | |
Expected Term | 0 to 1 year |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
Notes Payable Details Narrative | ||
Notes payable | $3,000 |
Going_Concern_Details_Narrativ
Going Concern (Details Narrative) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 |
Going Concern Details Narrative | |||
Accumulated deficit | ($58,305,886) | ($58,549,446) | |
Stockholders' deficit | ($39,655,382) | ($57,963,965) | ($10,194,010) |
Commitments_and_Contigencies_D
Commitments and Contigencies (Details Narrative) (USD $) | Dec. 31, 2014 |
Minimum future rental payments | |
2014 | $800 |
2015 | $4,000 |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
Stockholders Equity Details Narrative | ||
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Income_Tax_Details
Income Tax (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Deferred tax asset - non-current | ||
NOL carryover | $399,748 | $231,126 |
Less valuation allowance | -399,748 | -231,126 |
Deferred tax assets, net of valuation allowance |
Income_Tax_Details_1
Income Tax (Details 1) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Details 1 | ||
Book income | ($47,769,955) | ($10,194,010) |
Other nondeductible expenses | 47,226,014 | 9,448,441 |
Valuation allowance | $543,941 | $745,569 |
Income_Tax_Details_Narrative
Income Tax (Details Narrative) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Income Tax Details Narrative | |
Net operating loss carryforwards | $1,289,500 |
Future taxable income expiry year | 2014 to 2034 |
Restatement_of_Financial_State2
Restatement of Financial Statements (Details) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Sep. 30, 2014 |
CURRENT ASSETS | ||||
Cash | ||||
Loan Receivable | 104,000 | 101,480 | ||
Total current assets | 104,000 | 101,480 | ||
Total Assets | 104,000 | 101,480 | ||
CURRENT LIABILITIES: | ||||
Accounts payable | 186,170 | 160,204 | ||
Convertible notes payable | 950,294 | 1,230,950 | ||
Derivative Liability | 38,619,785 | 56,674,290 | ||
Total current liabilities | 39,759,382 | 58,065,445 | ||
Total Liabilities | 39,759,382 | 58,065,445 | ||
STOCKHOLDERS' DEFICIT | ||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 and June 30, 2014, respectively | ||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,385 and 103,125,000 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively | 241,192 | 103,125 | ||
Common stock issuable | ||||
Additional paid in capital | 18,409,312 | 482,356 | ||
Accumulated deficit | -58,305,886 | -58,549,446 | ||
Total stockholders' deficit | -39,655,382 | -57,963,965 | -10,194,010 | |
Total liabilities and stockholders' deficit | 104,000 | 101,480 | ||
Originally Reported [Member] | ||||
CURRENT ASSETS | ||||
Cash | 1,981 | |||
Loan Receivable | 101,480 | |||
Total current assets | 103,461 | |||
Investment in joint venture | 155,000 | |||
Total Assets | 258,461 | |||
CURRENT LIABILITIES: | ||||
Accounts payable | 161,276 | |||
Convertible notes payable | 950,294 | |||
Derivative Liability | 46,785,958 | |||
Accrued interest payable | ||||
Total current liabilities | 47,897,528 | |||
Total Liabilities | 47,897,528 | |||
STOCKHOLDERS' DEFICIT | ||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 and June 30, 2014, respectively | ||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,385 and 103,125,000 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively | 241,192 | |||
Common stock issuable | ||||
Additional paid in capital | 807,719 | |||
Accumulated deficit | -48,687,978 | |||
Total stockholders' deficit | -47,639,067 | |||
Total liabilities and stockholders' deficit | 258,461 | |||
Restated [Member] | ||||
CURRENT ASSETS | ||||
Cash | 1,981 | |||
Loan Receivable | 102,740 | |||
Total current assets | 104,721 | |||
Investment in joint venture | ||||
Total Assets | 104,721 | |||
CURRENT LIABILITIES: | ||||
Accounts payable | 161,276 | |||
Convertible notes payable | 950,294 | |||
Derivative Liability | 34,044,522 | |||
Accrued interest payable | ||||
Total current liabilities | 35,156,092 | |||
Total Liabilities | 35,156,092 | |||
STOCKHOLDERS' DEFICIT | ||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 and June 30, 2014, respectively | ||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,385 and 103,125,000 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively | 241,192 | |||
Common stock issuable | ||||
Additional paid in capital | 18,409,312 | |||
Accumulated deficit | -53,701,875 | |||
Total stockholders' deficit | -35,051,371 | |||
Total liabilities and stockholders' deficit | 104,721 | |||
Difference [Member] | ||||
CURRENT ASSETS | ||||
Cash | ||||
Loan Receivable | 1,260 | |||
Total current assets | 1,260 | |||
Investment in joint venture | -155,000 | |||
Total Assets | -153,740 | |||
CURRENT LIABILITIES: | ||||
Accounts payable | ||||
Convertible notes payable | ||||
Derivative Liability | -12,741,436 | |||
Accrued interest payable | ||||
Total current liabilities | -12,741,436 | |||
Total Liabilities | -12,741,436 | |||
STOCKHOLDERS' DEFICIT | ||||
Preferred stock: $0.001 par value; 10,000,000 shares authorized; none issued or outstanding at September 30, 2014 and June 30, 2014, respectively | ||||
Common stock: $0.001 par value; 500,000,000 shares authorized; 241,192,385 and 103,125,000 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively | ||||
Common stock issuable | ||||
Additional paid in capital | 17,601,593 | |||
Accumulated deficit | -5,013,897 | |||
Total stockholders' deficit | 12,587,696 | |||
Total liabilities and stockholders' deficit | ($153,740) |
Restatement_of_Financial_State3
Restatement of Financial Statements (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Sales | |||||
Cost of goods sold | |||||
Gross Margin | |||||
Operating Expenses | |||||
General and administrative | 25,978 | 51,910 | 46,900 | 90,730 | |
Professional Fees | 3,590 | 34,407 | 8,950 | 45,367 | |
Travel | 439 | 14,007 | 1,022 | 21,957 | |
Total operating expenses | 30,007 | 151,550 | 56,872 | 317,751 | |
Loss from Operations | -30,007 | -151,550 | -56,872 | -317,751 | |
Other income (Expense) | |||||
Derivative | -4,575,263 | -5,745,424 | 297,912 | -17,368,457 | |
Other income (expenses) | -4,575,263 | -5,745,424 | 297,912 | -17,368,457 | |
Income before Income Taxes | -4,605,270 | -5,896,974 | 241,040 | -17,686,208 | |
Net Loss | -4,604,010 | -5,896,974 | 243,560 | -17,686,208 | |
Originally Reported [Member] | |||||
Sales | |||||
Cost of goods sold | |||||
Gross Margin | |||||
Operating Expenses | |||||
General and administrative | 20,922 | ||||
Professional Fees | 5,360 | ||||
Travel | 582 | ||||
Total operating expenses | 26,864 | ||||
Loss from Operations | -26,864 | ||||
Other income (Expense) | |||||
Derivative | 9,888,332 | ||||
Interest Income | |||||
Other income (expenses) | 9,888,332 | ||||
Income before Income Taxes | 9,861,468 | ||||
Provision for income tax | |||||
Net Loss | 9,861,468 | ||||
Restated [Member] | |||||
Sales | |||||
Cost of goods sold | |||||
Gross Margin | |||||
Operating Expenses | |||||
General and administrative | 20,922 | ||||
Professional Fees | 5,360 | ||||
Travel | 582 | ||||
Total operating expenses | 26,864 | ||||
Loss from Operations | -26,864 | ||||
Other income (Expense) | |||||
Derivative | 4,873,175 | ||||
Interest Income | 1,260 | ||||
Other income (expenses) | 4,873,175 | ||||
Income before Income Taxes | 4,847,571 | ||||
Provision for income tax | |||||
Net Loss | 4,847,571 | ||||
Difference [Member] | |||||
Sales | |||||
Cost of goods sold | |||||
Gross Margin | |||||
Operating Expenses | |||||
General and administrative | |||||
Professional Fees | |||||
Travel | |||||
Total operating expenses | |||||
Loss from Operations | |||||
Other income (Expense) | |||||
Derivative | -5,015,157 | ||||
Interest Income | 1,260 | ||||
Other income (expenses) | -5,013,897 | ||||
Income before Income Taxes | -5,013,897 | ||||
Provision for income tax | |||||
Net Loss | ($5,013,897) |
Restatement_of_Financial_State4
Restatement of Financial Statements (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | ($4,604,010) | ($5,896,974) | $243,560 | ($17,686,208) | |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Derivative interest | -297,912 | 17,368,457 | |||
Changes in operating assets and liabilities: | |||||
(Increase) in Notes Receivable | -2,520 | ||||
Accounts payable and accrued expenses | 25,966 | 16,328 | |||
NET CASH USED IN OPERATING ACTIVITIES | -30,906 | -301,423 | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Proceeds from convertible notes payable | 27,774 | 280,000 | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 30,906 | 280,000 | |||
NET CHANGE IN CASH | -21,423 | ||||
Cash at beginning of the period | 101,480 | ||||
Cash at end of the period | 80,057 | 80,057 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||
Interest paid | |||||
Income tax paid | |||||
Originally Reported [Member] | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | 9,861,468 | ||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Derivative interest | -9,888,332 | ||||
Debt forgiveness | |||||
Changes in operating assets and liabilities: | |||||
Discontinued operations | |||||
(Increase) in Notes Receivable | |||||
Accounts payable and accrued expenses | 1,072 | ||||
NET CASH USED IN OPERATING ACTIVITIES | -25,792 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Proceeds from convertible notes payable | 27,774 | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 27,774 | ||||
NET CHANGE IN CASH | 1,982 | ||||
Cash at beginning of the period | |||||
Cash at end of the period | 1,982 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||
Interest paid | |||||
Income tax paid | |||||
Restated [Member] | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | 4,847,571 | ||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Derivative interest | -4,873,175 | ||||
Debt forgiveness | |||||
Changes in operating assets and liabilities: | |||||
Discontinued operations | |||||
(Increase) in Notes Receivable | -1,260 | ||||
Accounts payable and accrued expenses | 1,072 | ||||
NET CASH USED IN OPERATING ACTIVITIES | -25,792 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Cash overdraft | -1 | ||||
Proceeds from convertible notes payable | 27,774 | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 27,773 | ||||
NET CHANGE IN CASH | 1,981 | ||||
Cash at beginning of the period | |||||
Cash at end of the period | 1,981 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||
Interest paid | |||||
Income tax paid | |||||
Difference [Member] | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | -5,013,897 | ||||
Adjustments to reconcile net loss to net cash used by operating activities: | |||||
Derivative interest | 5,015,157 | ||||
Debt forgiveness | |||||
Changes in operating assets and liabilities: | |||||
Discontinued operations | |||||
(Increase) in Notes Receivable | -1,260 | ||||
Accounts payable and accrued expenses | |||||
NET CASH USED IN OPERATING ACTIVITIES | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Cash overdraft | -1 | ||||
Proceeds from convertible notes payable | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | -1 | ||||
NET CHANGE IN CASH | -1 | ||||
Cash at beginning of the period | |||||
Cash at end of the period | -1 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||
Interest paid | |||||
Income tax paid |