Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2015 | Nov. 19, 2015 | |
Document and Entity Information: | ||
Entity Registrant Name | MEGANET CORP | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 1,527,795 | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 100,000,000 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Date of Incorporation | Mar. 26, 2009 | |
Trading Symbol | mgne |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash | $ 1,186 | $ 94 |
Total current assets | 1,186 | 94 |
Property and equipment, net | 38,515 | 56,510 |
Total assets | 39,701 | 56,604 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 983,255 | 929,077 |
Deferred revenue | 40,000 | |
Officer loan | 754,780 | 666,045 |
Total current liabilities | 1,738,035 | 1,635,122 |
Total liabilities | 1,738,035 | 1,635,122 |
Stockholders' equity (deficit): | ||
Common stock; $0.001 par value, 100,000,000 shares authorized and 100,000,000 and 100,000,000 shares issued and outstanding, respectively | 100,000 | 100,000 |
Additional paid-in capital | 2,885,532 | 2,853,131 |
Accumulated deficit | (4,683,866) | (4,531,649) |
Total stockholders' equity (deficit) | (1,698,334) | (1,578,518) |
Total liabilities and stockholders' equity (deficit) | $ 39,701 | $ 56,604 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Mar. 31, 2015 |
Statement of Financial Position | ||
Common Stock Par Value | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock Shares Issued | 100,000,000 | 100,000,000 |
Common Stock Shares Outstanding | 100,000,000 | 100,000,000 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement | ||||
Revenues | $ 1,051 | $ 11,113 | $ 82,134 | $ 11,307 |
Cost of revenues | 5,500 | 5,500 | ||
Gross profit | 1,051 | 5,613 | 82,134 | 5,807 |
Operating expenses: | ||||
General and administrative | 39,887 | 11,558 | 58,895 | 14,802 |
Depreciation | 11,072 | 11,159 | 21,970 | 24,619 |
Compensation and related payroll taxes | 30,105 | 30,000 | 68,213 | 60,000 |
Rent | 30,000 | 30,000 | 60,131 | 60,000 |
Total operating expenses | 111,064 | 82,717 | 209,209 | 159,421 |
Loss before other expenses | (110,013) | (77,104) | (127,075) | (153,614) |
Other income (expenses) | ||||
Bitcoin mining income | 5,482 | 7,867 | ||
Bitcoin mining expense | (608) | (608) | ||
Interest expense | (16,562) | (14,136) | (32,401) | (27,837) |
Total other income (expenses) | (11,688) | (14,136) | (25,142) | (27,837) |
Loss before income taxes | $ (121,701) | $ (91,240) | $ (152,217) | $ (181,451) |
Provision for income taxes | ||||
Net loss | $ (121,701) | $ (91,240) | $ (152,217) | $ (181,451) |
Basic loss per common share | $ 0 | $ 0 | $ 0 | $ 0 |
Basic weighted average common shares outstanding and fully diluted | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||||
Net loss | $ (121,701) | $ (91,240) | $ (152,217) | $ (181,451) |
Adjustments to reconcile net loss to net cash (used) provided by operating activities: | ||||
Depreciation | 11,072 | 11,159 | 21,970 | 24,619 |
Imputed interest on officer advance | 32,401 | 27,837 | ||
Changes in operating assets and liabilities: | ||||
Increase in accounts payable and accrued expenses | 54,178 | 109,072 | ||
Decrease in deferred revenue | (40,000) | |||
Net cash used in operating activities | (83,668) | (19,923) | ||
Cash flows from investing activities: | ||||
Purchase of fixed assets | (3,975) | |||
Net cash used by investing activities | (3,975) | |||
Cash flows from financing activities: | ||||
Advances from officer | 129,500 | 25,820 | ||
Repayment of officer advances | (40,765) | (5,900) | ||
Net cash provided by financing activities | 88,735 | 19,920 | ||
Net change in cash | 1,092 | (3) | ||
Cash, beginning of period | 94 | 131 | ||
Cash, end of period | $ 1,186 | $ 128 | $ 1,186 | $ 128 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest | ||||
Cash paid for taxes |
1. Description of Business and
1. Description of Business and History | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
1. Description of Business and History | 1. DESCRIPTION OF BUSINESS AND HISTORY Description of business History |
2. Summary of Significant Polic
2. Summary of Significant Policies | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
2. Summary of Significant Policies | 2. SUMMARY OF SIGNIFICANT POLICIES Basis of presentation These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation. Use of estimates Cash and cash equivalents Revenue recognition Generally, the Company requires customers to deposit 50% of the gross sales price upon execution of a formal intent to sell with the remaining 50% due upon delivery of the product. The Company records deferred revenue when it receives payments in advance of the delivery of products. During the year ended March 31, 2015, the Company began purchasing GAW miners and leasing computing space in exchange for bitcoin currency. During April 2015, the Company and GAW miners entered into a settlement agreement for the repayment of a bitcoin dispute. The agreement calls for six equal monthly payments of $16,453 starting in March 2015, when the Company received its first payment. The Company recognizes GAW mining payments as bitcoin income as they are received on a cash basis. The Company has not received any payments since March 2015 and has fully allowed for past due payments due to questions of collectability. During the six months ended September 30, 2015, the Company had revenue of $82,134, including $80,000 worth of jammer equipment previously recorded as display assets with an original purchase cost of $21,725 and a net book value of $0 as of the time of sale. Shipping costs Software development costs Costs of revenue Property and equipment Description Estimated Life Equipment 5 years Computers 5 years Office furniture 7 years Leasehold improvements 5 years The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal considerations such as contractual life. Future events, such as property expansions, property developments, new competition, or new regulations, could result in a change in the manner in which the Company uses certain assets requiring a change in the estimated useful lives of such assets. Maintenance and repairs that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains or losses on disposition of property and equipment are included in the statements of operations. There were no dispositions during the periods presented. The Company evaluates its property and equipment and other long-lived assets for impairment in accordance with related accounting standards. For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, the Company first groups its assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the asset group). Secondly, the Company estimates the undiscounted future cash flows that are directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still Property and equipment Income taxes The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Companys tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Earnings (loss) per share Stock-based compensation Concentration of credit risk Fair value of financial instruments Recent Accounting Pronouncements |
3. Going Concern
3. Going Concern | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
3. Going Concern | 3. GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has an accumulated deficit of $4,683,866 as of September 30, 2015. The Company requires capital for its contemplated operational and marketing activities. The Companys ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. Management anticipates that that there will be sales sufficient to cover the next 12 months of cash operating expenses; however, there can be no surety that anticipated sales will materialize. In order to mitigate the risk related with this uncertainty, the CEO has agreed to contribute additional amounts to capital as needed to cover operating expenses. |
4. Property and Equipment, Net
4. Property and Equipment, Net | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
4. Property and Equipment, Net | 4. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following as of September 30, 2015 and March 31, 2015: September 30, 2015 March 31, 2015 Furniture and equipment 2,557,113 2,574,874 Leasehold improvements 99,094 99,094 Vehicles 5,500 5,500 2,661,707 2,679,468 Less: accumulated depreciation (2,623,192) (2,622,958) 38,515 56,510 Depreciation expense, for the six months ended September 30, 2015 and 2014 was $21,970 and $24,619, respectively. |
5. Accounts Payable and Accrued
5. Accounts Payable and Accrued Liabilities | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
5. Accounts Payable and Accrued Liabilities | 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following as of September 30, 2015 and March 31, 2015: September 30, 2015 March 31, 2015 Accounts payable $171,986 $186,023 Accrued payroll 737,555 669,340 Accrued payroll tax 73,714 73,714 $983,255 $929,077 |
6. Operating Lease
6. Operating Lease | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
6. Operating Lease | 6. OPERATING LEASE Lease obligations Rental expense, for the six months ended September 30, 2015 and 2014 was $60,131 and $60,000, respectively. |
7. Related Party Transactions
7. Related Party Transactions | 6 Months Ended |
Sep. 30, 2015 | |
Notes | |
7. Related Party Transactions | 7. RELATED PARTY TRANSACTIONS Officer loan In accordance with FASB ASC 835-30 Imputation of Interest interest has been imputed on all advances made to Company by the president. During the six months ended September 30, 2015 and 2014, interest has been imputed and charged to additional paid-in capital in the amount of $32,401 and $27,837, respectively. Employment agreements |
2. Summary of Significant Pol13
2. Summary of Significant Policies (Policies) | 6 Months Ended |
Sep. 30, 2015 | |
Policies | |
Basis of Presentation | Basis of presentation These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation. |
Use of Estimates | Use of estimates |
Cash and Cash Equivalents | Cash and cash equivalents |
Revenue Recognition | Revenue recognition Generally, the Company requires customers to deposit 50% of the gross sales price upon execution of a formal intent to sell with the remaining 50% due upon delivery of the product. The Company records deferred revenue when it receives payments in advance of the delivery of products. During the year ended March 31, 2015, the Company began purchasing GAW miners and leasing computing space in exchange for bitcoin currency. During April 2015, the Company and GAW miners entered into a settlement agreement for the repayment of a bitcoin dispute. The agreement calls for six equal monthly payments of $16,453 starting in March 2015, when the Company received its first payment. The Company recognizes GAW mining payments as bitcoin income as they are received on a cash basis. The Company has not received any payments since March 2015 and has fully allowed for past due payments due to questions of collectability. During the six months ended September 30, 2015, the Company had revenue of $82,134, including $80,000 worth of jammer equipment previously recorded as display assets with an original purchase cost of $21,725 and a net book value of $0 as of the time of sale. |
Shipping Costs | Shipping costs |
Software Development Costs | Software development costs |
Cost of Revenue | Costs of revenue |
Property and Equipment | Property and equipment Description Estimated Life Equipment 5 years Computers 5 years Office furniture 7 years Leasehold improvements 5 years The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal considerations such as contractual life. Future events, such as property expansions, property developments, new competition, or new regulations, could result in a change in the manner in which the Company uses certain assets requiring a change in the estimated useful lives of such assets. Maintenance and repairs that neither materially add to the value of the asset nor appreciably prolong its life are charged to expense as incurred. Gains or losses on disposition of property and equipment are included in the statements of operations. There were no dispositions during the periods presented. The Company evaluates its property and equipment and other long-lived assets for impairment in accordance with related accounting standards. For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, the Company first groups its assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the asset group). Secondly, the Company estimates the undiscounted future cash flows that are directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. The Company estimates the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still Property and equipment |
Income Taxes | Income taxes The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Companys tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. |
Earnings (loss) Per Share | Earnings (loss) per share |
Stock-based Compensation | Stock-based compensation |
Concentration of Credit Risk | Concentration of credit risk |
Fair Value of Financial Instruments | Fair value of financial instruments |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
4. Property and Equipment, Net_
4. Property and Equipment, Net: Schedule of Property and Equipment (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Property and Equipment | Property and equipment consist of the following as of September 30, 2015 and March 31, 2015: September 30, 2015 March 31, 2015 Furniture and equipment 2,557,113 2,574,874 Leasehold improvements 99,094 99,094 Vehicles 5,500 5,500 2,661,707 2,679,468 Less: accumulated depreciation (2,623,192) (2,622,958) 38,515 56,510 |
5. Accounts Payable and Accru15
5. Accounts Payable and Accrued Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Sep. 30, 2015 | |
Tables/Schedules | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of the following as of September 30, 2015 and March 31, 2015: September 30, 2015 March 31, 2015 Accounts payable $171,986 $186,023 Accrued payroll 737,555 669,340 Accrued payroll tax 73,714 73,714 $983,255 $929,077 |
1. Description of Business an16
1. Description of Business and History (Details) | 6 Months Ended |
Sep. 30, 2015 | |
Details | |
Date of Incorporation | Mar. 26, 2009 |
2. Summary of Significant Pol17
2. Summary of Significant Policies: Revenue Recognition (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | |
Monthly revenue to receive from settlement agreement | $ 16,453 | ||||
Revenues | $ 1,051 | $ 11,113 | 82,134 | $ 11,307 | |
Cost of revenues | $ 5,500 | $ 5,500 | |||
Property and equipment, net | 38,515 | 38,515 | $ 56,510 | ||
Jammer Equipment | |||||
Revenues | 80,000 | ||||
Cost of revenues | 21,725 | ||||
Property and equipment, net | $ 0 | $ 0 |
2. Summary of Significant Pol18
2. Summary of Significant Policies: Property and Equipment (Details) | 6 Months Ended |
Sep. 30, 2015 | |
Equipment | |
Estimated Life | 5 years |
Computers | |
Estimated Life | 5 years |
Office Furniture | |
Estimated Life | 7 years |
Leasehold Improvements | |
Estimated Life | 5 years |
3. Going Concern (Details)
3. Going Concern (Details) - USD ($) | Sep. 30, 2015 | Mar. 31, 2015 |
Details | ||
Accumulated deficit | $ (4,683,866) | $ (4,531,649) |
4. Property and Equipment, Ne20
4. Property and Equipment, Net: Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2015 | Mar. 31, 2015 |
Property and equipment, gross | $ 2,661,707 | $ 2,679,468 |
Less: Accumulated Depreciation | (2,623,192) | (2,622,958) |
Property and equipment, net | 38,515 | 56,510 |
Office Furniture | ||
Property and equipment, gross | 2,557,113 | 2,574,874 |
Leasehold Improvements | ||
Property and equipment, gross | 99,094 | 99,094 |
Vehicles | ||
Property and equipment, gross | $ 5,500 | $ 5,500 |
4. Property and Equipment, Net
4. Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Details | ||||
Depreciation | $ 11,072 | $ 11,159 | $ 21,970 | $ 24,619 |
5. Accounts Payable and Accru22
5. Accounts Payable and Accrued Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Sep. 30, 2015 | Mar. 31, 2015 |
Details | ||
Accounts Payable | $ 171,986 | $ 186,023 |
Accrued payroll | 737,555 | 669,340 |
Accrued payroll tax | 73,714 | 73,714 |
Accounts payable and accrued liabilities | $ 983,255 | $ 929,077 |
6. Operating Lease (Details)
6. Operating Lease (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Details | ||
Lease obligations | Lease obligations – On January 1, 2010, the Company entered into a 60 month lease for its 10,000 square foot office space located in Las Vegas, Nevada. The lease required no security deposit and provides for monthly payments of $10,000. The lease provides for a 60 month renewal period at the expiration to the lease period which the Company anticipates to exercise, but is currently paying month-to-month. In negotiating the lease, the lessor agreed to add approximately $250,000 in leasehold improvements to the property. In exchange, the lessor also agreed to change the rate terms from 120 months at $5,000 per month to 60 months at $10,000 per month. | |
Rent Expense | $ 60,131 | $ 60,000 |
7. Related Party Transactions (
7. Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | |
Repayment of officer advances | $ 40,765 | $ 5,900 | |||
Officer loan | $ 754,780 | 754,780 | $ 666,045 | ||
Imputed interest on officer advance | 32,401 | 27,837 | |||
Compensation and related payroll taxes | 30,105 | $ 30,000 | 68,213 | 60,000 | |
Accounts payable and accrued liabilities | 983,255 | 983,255 | 929,077 | ||
President | |||||
Repayment of officer advances | 40,765 | ||||
Officer loan | 754,780 | 754,780 | 666,045 | ||
Officers' Compensation | $ 120,000 | ||||
Sales Commission Rate | 10.00% | ||||
Compensation and related payroll taxes | $ 68,213 | $ 60,000 | |||
Accounts payable and accrued liabilities | $ 811,269 | $ 811,269 | $ 743,054 |