Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Sep. 30, 2017 | Mar. 10, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | METWOOD INC | |
Entity Central Index Key | 0000032567 | |
Trading Symbol | mtwd | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | No | |
Entity Common Stock, Shares Outstanding | 17,766,647 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Small Business | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 80,123 | $ 67,854 |
Accounts receivable | 171,583 | 184,290 |
Inventory | 407,943 | 518,001 |
Other current assets | 12,539 | 14,755 |
Total current assets | 672,188 | 784,900 |
Property and Equipment | ||
Leasehold Improvements | 274,869 | 274,869 |
Furniture, fixtures and equipment | 78,222 | 78,222 |
Computer and software | 189,420 | 186,517 |
Machinery & Equipment | 741,884 | 741,884 |
Vehicles | 393,887 | 393,887 |
Land improvements | 67,959 | 67,959 |
Total Property and Equipment | 1,746,241 | 1,743,338 |
Less accumulated depreciation | (1,293,530) | (1,273,705) |
Net Property and Equipment | 452,711 | 469,633 |
Total assets | 1,124,899 | 1,254,533 |
Current liabilities | ||
Accounts payable and accrued liabilities | 125,723 | 178,928 |
Accrued payroll expense | 4,167 | 22,625 |
Note payable to related party | 77,460 | 77,460 |
Total current liabilities | 207,350 | 279,013 |
Long term liabilities | ||
Convertible note payable-related company net of debt discount of $30,882 and $35,294, respectively | 19,118 | 14,706 |
Total long term liabilities | 19,118 | 14,706 |
Total liabilities | 226,468 | 293,719 |
Commitments and Contingencies Note 4 | ||
Stockholder's equity | ||
Common stock ($.001) 100,000,000 shares authorized 17,776,747 and 17,667,747 outstanding | 17,767 | 17,767 |
Paid in capital | 3,550,236 | 3,550,236 |
Accumulated deficit | (1,811,572) | (1,671,189) |
Contra equity-prepaid rent | (858,000) | (936,000) |
Total stockholders' equity | 898,431 | 960,814 |
Total liaibliities and stockholders' equity | $ 1,124,899 | $ 1,254,533 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 |
Stockholder's equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 17,776,747 | 17,766,747 |
Long term liabilities | ||
Convertible note payable-related company, discountable amount | $ 30,882 | $ 35,294 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements Of Operations | ||
Gross sales | $ 530,043 | $ 525,505 |
Cost of sales | (389,255) | (333,596) |
Gross profit | 140,788 | 191,909 |
Operating expenses | ||
Payroll expense | 115,366 | 109,920 |
Other | 162,479 | 173,388 |
Total operating expense | 277,845 | 283,308 |
Operating income (loss) | (137,057) | (91,399) |
Other income (expense) | ||
Gain on disposal of assets | 0 | 21,177 |
Other income (expense) | 1,086 | 1,542 |
Interest expense | (4,412) | (1,471) |
Total other income (expense) | (3,326) | 21,248 |
Net operating loss | (140,383) | (70,151) |
Provision for income taxes | 0 | 0 |
Net loss | $ (140,383) | $ (70,151) |
Basic earnings (loss) per share | $ (0.01) | $ 0 |
Weighted number of shares outstanding | 17,766,647 | 17,766,647 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements Of Cash Flow | ||
Net loss | $ (140,383) | $ (70,151) |
Adjustments to reconcile net loss to net cash provided by (used in) operations | ||
Depreciation | 19,825 | 13,930 |
Amortization of note discount | 4,412 | 1,471 |
Amortization of prepaid rent | 78,000 | 78,000 |
Gain on disposal of assets | 0 | (21,177) |
(Increase) decrease in operating assets | ||
Accounts receivable | 12,707 | 2,699 |
Inventory | 110,058 | (2,833) |
Other current assets | 2,216 | (1,247) |
Increase (decrease) in liabilities | ||
Accounts payable and accrued liabilities | (53,205) | (53,835) |
Accrued payroll | (18,458) | (4,394) |
Net cash provided (used) in operating activities | 15,172 | (57,537) |
Investment activities | ||
Property and equipment purchases | (2,903) | (1,515) |
Proceeds from insurance on assets | 0 | 21,177 |
Net cash provided (used) in investing activities | (2,903) | 19,662 |
Financing Activities | ||
Advances from related party | 0 | 0 |
Proceeds from convertible note | 0 | 50,000 |
Net cash provided by (used) in financing activities | 0 | 50,000 |
Increase (decrease) in cash | 12,269 | 12,125 |
Beginning cash | 67,854 | 91,309 |
Ending cash | 80,123 | 103,434 |
Supplemental Disclosure of Cash Flow Information | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
Supplemental Disclosure of Non-Cash investing and financing activities | ||
Debt discount on convertible note | $ 0 | $ 50,000 |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND OPERATIONS | Metwood, Inc. (The Company,our,we) was incorporated under the laws of the State of Wyoming on June 19, 1969. On January 28, 2000, the Company, through a majority shareholder vote, changed its domicile to Nevada through a merger with EMC Energies, Inc., a Nevada corporation. The Company also changed its par value to $.001 and the amount of authorized common stock to 100,000,000 shares. Prior to 1990, the Company was engaged in the business of exploring for and producing oil and gas in the Rocky Mountain and mid-continental areas of the United States. The Company liquidated substantially all of its assets in 1990 and was dormant until June 30, 2000, when it acquired, in a stock-for-stock, tax-free exchange, all of the outstanding common stock of a privately held Virginia corporation, Metwood, Inc. (“Metwood”), which was incorporated in 1993. Metwood has been in the metal and metal/wood construction materials manufacturing business since 1992. Following the acquisition, the Company approved a name change from EMC Energies, Inc. to Metwood, Inc. The Company provides construction-related products and engineering services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in southwestern Virginia. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES | Going Concern Our consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have sustained significant operating losses since inception which raises substantial doubt about the Company’s ability to continue as a going concern. During the three months ended September 30, 2017, the Company incurred a loss from operations of $140,383 and has an accumulated deficit of $1,811,572. Management will continue its ongoing efforts to increase the customer base and seek lower cost suppliers to generate future profits. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. The basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. Basis of Presentation For further information, refer to the consolidated financial statements and footnotes thereto included in Metwood, Inc.’s annual report on Form 10-K for the year ended June 30, 2017. Fair Value of Financial Instruments Management’s Use of Estimates Cash and Cash Equivalents Accounts Receivable Inventory Property and Equipment Impairment of Long-lived Assets Patents Revenue Recognition Income Taxes Research and Development Earnings Per Common Share If the convertible note is converted in its entirety the Company will issued 50,000,000 shares of common stock, the maximum conversion for any one year is 10,000,000. If the contract for change of control is consummated, then an additional 30,000,000 shares of common stock will be issued. Recent Accounting Pronouncements Accounting Standard Update No. 2014-09, (“ASU 2014-09’) Revenue from Customers (Topic 606), became effective for us in the period ending June 30, 2019. No significant adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is expected to be immaterial to the Company’s net income on an ongoing basis. |
CONCENTRATIONS OF CUSTOMER RISK
CONCENTRATIONS OF CUSTOMER RISK | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 3 - CONCENTRATIONS OF CUSTOMER RISK | For the three months ended September 30, 2017, a table is presented to show customer concentration of over 10% for sales and accounts receivable. % of Sales % of Open Accounts Receivable 2017 2016 2017 2016 84 Lumber * 18.9 * 15.9 Builders First 21.9 15 14.93 14.14 David James Homes * * 27.92 12.14 Superior Home * * 10.58 21.67 ________ *Total less than 10% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 4 - COMMITMENTS AND CONTINGENCIES | During the year ended June 30, 2005, The Company into as sales and leaseback transaction with a related party. The Company sold various buildings at the corporate headquarters which house it’s manufacturing plants, executive offices and other buildings for $600,000 in cash. The Company simultaneously entered into a commercial lease agreement with the related party whereby the Company is committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014. On July 1, 2015 a new lease was entered into with the related party. This lease has a term of five years and the monthly rental is $5,500 in cash, in addition the Company issued common stock as part of the transaction. The Company incurred rent expense of $100,000 for the ,three months ended September 30, 2017, $78,000 of this figure was amortization of prepaid rent. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 5 - RELATED-PARTY TRANSACTIONS | The Company has executed a demand note with it’s controlling shareholder, Cahas Mountain, LLC, that Cahas Mountain will make available cash advances from time to time to bridge cash flow shortfalls. These advances ae repaid to Cahas Mountain as cash flow allows. The unpaid balance due to Cahas Mountain at the end of each month is subject to an interest rate of 6% per year, At September 30, 2017 and 2016, advances under this note are payable to Cahas Mountain Properties of approximately $77,000 and $77,000, respectively. Accrued interest payable to Cahas Mountain Properties totaled approximately $20,000 and $20,000 at September 30, 2017 and June 30, 2016, respectively. The Company recognized interest expense of approximately $4,412 and $-0- for the three months ended September 30, 2017 and 2016, respectively. The unpaid advances are due on demand. On August 18, 2016 the Company entered into a convertible note with Cahas Mountain in the amount of $50,000 with an interest rate of 8% per year, this note matures on June 30, 2019. The note is convertible into common shares of Metwood, Inc. at par value of $.001 and if converted in its entirety will dilute the current shareholders by a maximum of 50,000,000 shares of common stock. The maximum conversion in any year is 10,000,000 shares of common stock. A debt discount of $50,000 was recorded at issuance and $4,412 and $1,472 was amortized during the three months ended September 30, 2017 and 2016, respectively. The unamortized debt discount was $30,882 at September 30, 2017, and $35,294 and June 30,2017, respectively. |
EQUITY
EQUITY | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 6 - EQUITY | During the three months ended September 30, 2017 The Company did not issue any preferred shares or common shares of stock. There are 100,000,000 shares of common stock authorized and at the quarter end there are 17,766,647 shares issued and outstanding. The authorized preferred stock is 40,000,000 shares and there are -0- shares of preferred stock issued and outstanding. If the convertible note that is covered in the related party note (Note 5) and is converted into common stock of The Company, an additional 50,000,000 shares of common stock could be issued, resulting in dilution of the current shareholders. When the contract of October 11, 2018 is completed (see Note 8) there will be an additional 30,000,000 shares issued to the principals of Emerge Nutraceuticals, Inc. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 7 - LEGAL PROCEEDINGS | On June 27, 2016, a law suit was brought against the Company alleging breach of contract. This action alleges that the Company failed to complete a contract that would have transferred control of the public portion of the Company to third parties. The Company attorneys has determined that there is an affirmative defense against this claim and that the company will prevail. See note 8. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2017 | |
Notes to Financial Statements | |
NOTE 8 - SUBSEQUENT EVENTS | The law suit in Note 7 was subsequently decided in the favor of the company and the judgment was upheld on appeal. Final judgment was rendered in October 2017. A contract that will eventually change control of the company was entered into on October 11, 2018 and is planned to close within the first quarter of calendar year 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Policies) | 3 Months Ended |
Sep. 30, 2017 | |
Summary Of Significant Accounting Practices | |
Going Concern | Our consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have sustained significant operating losses since inception which raises substantial doubt about the Company’s ability to continue as a going concern. During the three months ended September 30, 2017, the Company incurred a loss from operations of $140,383 and has an accumulated deficit of $1,811,572. Management will continue its ongoing efforts to increase the customer base and seek lower cost suppliers to generate future profits. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. The basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals unless otherwise noted) considered necessary for a fair presentation have been included. Operating results for the three month period ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ended June 30, 2018. The consolidated balance sheet at June 30, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Metwood, Inc.’s annual report on Form 10-K for the year ended June 30, 2017. |
Fair Value of Financial Instruments | For certain of the Company’s financial instruments, none of which are held for trading, including cash, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. |
Management's Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | |
Accounts Receivable | |
Inventory | |
Property and Equipment | |
Impairment of Long-lived Assets | |
Patents | |
Revenue Recognition | |
Income Taxes | |
Research and Development | |
Earnings Per Common Share | Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. This presentation has been adopted for the quarters presented. There were no adjustments required to net loss for the years presented in the computation of diluted earnings per share. If the convertible note is converted in its entirety the Company will issued 50,000,000 shares of common stock, the maximum conversion for any one year is 10,000,000. If the contract for change of control is consummated, then an additional 30,000,000 shares of common stock will be issued. |
Recent Accounting Pronouncements | Accounting Standard Update No. 2014-09, (“ASU 2014-09’) Revenue from Customers (Topic 606), became effective for us in the period ending June 30, 2019. No significant adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is expected to be immaterial to the Company’s net income on an ongoing basis. |
CONCENTRATIONS OF CUSTOMER RI_2
CONCENTRATIONS OF CUSTOMER RISK (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Concentrations Of Customer Risk | |
Schedule of customer concentration sales and accounts receivable | % of Sales % of Open Accounts Receivable 2017 2016 2017 2016 84 Lumber * 18.9 * 15.9 Builders First 21.9 15 14.93 14.14 David James Homes * * 27.92 12.14 Superior Home * * 10.58 21.67 |
ORGANIZATION AND OPERATIONS (De
ORGANIZATION AND OPERATIONS (Details Narrative) - $ / shares | 3 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2017 | |
Organization And Operations | ||
State of incorporation | Wyoming | |
Date of incorporation | Jun. 19, 1969 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Income (loss) from operations | $ (140,383) | $ (70,151) | |
Accumulated deficit | (1,811,572) | $ (1,671,189) | |
FDIC insured amount | 250,000 | ||
Allowance for doubtful accounts receivable, current | 8,362 | ||
Bad debts charged off | 0 | 0 | |
Raw materials | 294,912 | ||
Work in process inventory | 113,025 | ||
Research and development expense | $ 740 | $ 0 | |
Description for antidilutive effect of securities excluded from computation of EPS | If the convertible note is converted in its entirety the Company will issued 50,000,000 shares of common stock, the maximum conversion for any one year is 10,000,000. If the contract for change of control is consummated, then an additional 30,000,000 shares of common stock will be issued. | ||
Minimum [Member] | |||
Property, plant and equipment, useful life | 3 years | ||
Maximum [Member] | |||
Property, plant and equipment, useful life | 40 years |
CONCENTRATIONS OF CUSTOMER RI_3
CONCENTRATIONS OF CUSTOMER RISK (Details) | 3 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | |||
Sales [Member] | 84 Lumber [Member] | ||||
Concentration Risk, Percentage | [1] | 18.90% | ||
Sales [Member] | Builders First [Member] | ||||
Concentration Risk, Percentage | 21.90% | 15.00% | ||
Sales [Member] | David James Homes [Member] | ||||
Concentration Risk, Percentage | [1] | |||
Sales [Member] | Superior Home [Member] | ||||
Concentration Risk, Percentage | [1] | |||
Accounts Receivable [Member] | 84 Lumber [Member] | ||||
Concentration Risk, Percentage | [1] | 15.90% | ||
Accounts Receivable [Member] | Builders First [Member] | ||||
Concentration Risk, Percentage | 14.93% | 14.14% | ||
Accounts Receivable [Member] | David James Homes [Member] | ||||
Concentration Risk, Percentage | 27.92% | 12.14% | ||
Accounts Receivable [Member] | Superior Home [Member] | ||||
Concentration Risk, Percentage | 10.58% | 21.67% | ||
[1] | Total less than 10% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2005 | |
Commercial Lease Agreement [Member] | ||
Term of lease | 5 years | |
Term of lease description | The Company simultaneously entered into a commercial lease agreement with the related party whereby the Company is committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014. | |
Rent expense | $ 100,000 | |
Operating leases, monthly rent expense | 5,500 | |
Amortization of prepaid rent | $ 78,000 | |
Corporate Headquarters [Member] | ||
Property, plant and equipment sold in exchange for cash | $ 600,000 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Aug. 18, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Debt discount on convertible note | $ 0 | $ 50,000 | |||
Cahas Mountain Properties [Member] | |||||
Interest rate | 6.00% | 6.00% | |||
Advances payable, related parties | $ 77,000 | $ 77,000 | |||
Accrued interest payable | 20,000 | $ 20,000 | |||
Interest expense | 4,412 | 0 | |||
Cahas Mountain, LLC. [Member] | Convertible Note Payable [Member] | |||||
Interest rate | 8.00% | ||||
Convertible note payable | $ 50,000 | ||||
Maturity date | Jun. 30, 2019 | ||||
Description for terms of conversion feature | The note is convertible into common shares of Metwood, Inc. at par value of $.001 and if converted in it’s entirety will dilute the current shareholders by a maximum of 50,000,000 shares of common stock. The maximum conversion in any year is 10,000,000 shares of common stock. | ||||
Amortization of debt discount | 4,412 | $ 1,472 | |||
Debt discount on convertible note | $ 50,000 | ||||
Unamortized debt discount | $ 30,882 | $ 35,294 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - shares | 3 Months Ended | ||
Sep. 30, 2017 | Oct. 11, 2018 | Jun. 30, 2017 | |
Common stock, authorized | 100,000,000 | 100,000,000 | |
Common stock, issued | 17,766,647 | ||
Common stock, outstanding | 17,776,747 | 17,766,747 | |
Preferred stock, authorized | 40,000,000 | 40,000,000 | |
Preferred stock, issued | 0 | ||
Preferred stock, outstanding | 0 | 0 | |
Common stock issuable upon conversion, Shares | 50,000,000 | ||
Emerge Nutraceuticals, Inc. [Member] | Subsequent Event [Member] | |||
Common stock shares reserved for future issuance | 30,000,000 |