Emerge Health International (MTWD) 10-Q 21 May 19 2018 Q1 Quarterly report Financial data

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