MICROELECTRONICS TECHNOLOGY COMPANY
FORM 10-Q/A
(Quarterly Report)
Filed 02/26/10 for the Period Ending 09/30/09
Address 1702 ChinaChem Tower,
34 - 37 Connaught Road,
Central, Hong Kong, China.
Telephone (852) 3106-3103
CIK 0001329136
Symbol MELY
SIC Code 1000 - Metal Mining
Industry Gold & Silver
Sector Basic Materials
Fiscal Year 06/30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended
September 30, 2009.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from __________ to ___________
Commission File Number : 333-130767
MICROELECTRONICS TECHNOLOGY COMPANY
(formerly CHINA YOUTV CORP.)
(Exact name of registrant as specified in its charter)
Nevada N/A
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1702 ChinaChem Tower, 34-37 Connaught Road, Central,
Hong Kong, China
(Address of principal executive offices,
including zip code)
852-3106-3103
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ( X ) No ( )
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T ( 232.405
of this chapter ) during the preceding 12 months (or for
such shorter period that the registrant was required
to submit and post such files). Yes ( ) No ( )
Indicate by check if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ( X )
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a not-accelerated
filer, or a smaller reporting company. See the definitions
of "large accelerated filer," "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange
Act.
Large accelerated filer ( ) Accelerated filer ( )
Non-accelerated filer ( ) Smaller reporting company (X)
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act).
Yes ( ) No ( X )
At February 10, 2010, the Company had outstanding of
100,060 shares of Common Stock, $0.00001 par value per
share.
MICROELECTRONICS TECHNOLOGY COMPANY
FORM 10-Q/A
For the Period Ended September 30, 2009
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION Pages
Item 1. Financial Statements .......... 1 - 20
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......... 21 - 23
Item 3. Quantitative and Qualitative Disclosures
about Market Risk.... 23
Item 4T.Controls and Procedures........... 23
PART II
Item 1. Legal Proceedings................ 23
Item 1A.Risk Factors............ 24
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds.. 24
Item 3. Defaults Upon Senior Securities......... 24
Item 4. Submission of Matters to a Vote of Security Holders... 25
Item 5. Other Information......... 25
Item 6. Exhibits and Certifications...... 25
Part 1. Item 1. Financial Statements
MICROELECTRONICS TECHNOLOGY COMPANY
Page No.
Balance Sheets as at September 30, 2009 and June 30, 2009 1
Statements of Operations
For the three months ended September 30, 2009 and 2008
and for the period May 18, 2005 (Inception) to
September 30, 2009. 2
Statements of Cash Flows
For the three months ended September 30, 2009 and 2008
and for the period May 18, 2005 (Inception) to
September 30, 2009 3
Notes to Financial Statements 4-20
MICROELECTRONICS TECHNOLOGY COMPANY
(Formerly: China YouTV Corp.)
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2009
(Expressed in US Dollars)
Microelectronics Technology Company
(formerly China YouTV Corp.)
(A Development Stage Company)
Balance Sheets
(Expressed in US Dollars )
Sept. 30, June 30,
2009 2009
(Restated- (Restated-
Note 7) Note 7)
Current Assets
Cash $ 193 $ 299
______________________
Total current assets 193 299
Mineral claims acquisition costs 124,912 124,912
______________________
Total assets 125,105 125,211
______________________
Liabilities and Stockholders' deficit
Current Liabilities
Accounts payable $ 67,135 $ 55,414
Accrued liabilities 2,000 11,000
Due to former related party 190,084 190,084
______________________
Total current liabilities and total liabilities 259,219 256,498
______________________
Stockholders' Deficit
Preferred stock, $0.00001 par value:
Authorized 200,000,000 shares,
issued and outstanding, none issued - -
Common stock, $0.00001 par value:
Authorized 200,000,000 shares,
issued and outstanding, 100,060 shares
(June 2009 - 100,060) 1 1
Additional paid-in capital 945,389 945,389
Accumulated deficit (1,079,504) (1,076,677)
_______________________
Total stockholders' deficit (134,114) (131,287)
_______________________
Total liabilities and stockholders' deficit $ 125,105 $ 125,211
_______________________
The accompanying notes are an integral part of these financial statements.
1
Microelectronics Technology Company
(formerly China YouTV Corp.)
(A Development Stage Company)
Statements of Operations
(Expressed in US Dollars )
Cumulative
during the
development
Three months ended stage (May 18,
September 30, 2005 to
2009 2008 Sept. 30, 2009)
_________________________________________
(Restated- (Restated)
Note 7)
____________________________________________________________________________
Revenue $ - $ - $ -
____________________________________________________________________________
Expenses
General and administrative 2,827 107,811 1,072,032
Impairment of mineral claim
acquisition costs and mineral
claim exploration and
carrying costs - - 7,794
________________________________________
Total operating expenses 2,827 107,811 1,079,826
________________________________________
Operating loss (2,827) (107,811) (1,079,826)
Other income
Interest income - - 322
________________________________________
Net loss $ (2,827) $ (107,811) $ (1,079,504)
________________________________________
Net loss per common Share
- Basic and Diluted $ (0.03) $ (3.59)
Weighted average number
of common shares outstanding 100,060 30,060
The accompanying notes are an integral part of these financial statements.
2
Microelectronics Technology Company
(formerly China YouTV Corp.)
(A Development Stage Company)
Statements Of Cash Flows
(Expressed in US Dollars )
Cumulative
during the
development
Three months ended stage (May 18,
September 30, 2005 to
2009 2008 Sept 30, 2009)
___________________________________________________________________________
(Restated- (Restated)
Note 7)
Cash Flows (Used In) Provided By :
Operating Activities
Net Loss $ (2,827) $ (107,811) $ (1,079,504)
Adjustments to reconcile net
loss to net cash used
in operating activities:
Impairment of mineral property costs - - 6,033
Stock-based compensation - 83,750 796,880
Changes in operating assets
and liabilities:
Prepaid expenses - 1,941 -
Accounts payable and accrued
liabilities 2,721 (2,493) 58,223
_____________________________________
Net cash used in operating
activities (106) (24,613) (218,368)
Investing Activities
Mineral claim acquisition
costs incurred - - (6,033)
_____________________________________
Net cash used in investing
activities - - (6,033)
_____________________________________
Financing Activities
Loans from related party - 20,000 190,084
Proceeds from sales of common stock - - 34,510
_____________________________________
Net cash provided by
financing activities - 20,000 224,594
_____________________________________
Increase/(Decrease) in Cash (106) (4,613) 193
Cash, beginning 299 24,484 -
_____________________________________
Cash, ending $ 193 $ 19,871 $ 193
_____________________________________
Supplemental disclosure of cash flow information:
Interest paid $ - $ - $ -
Income tax paid $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
3
Microelectronics Technology Company
(formerly China YouTV Corp.)
Notes to Financial Statements
September 30, 2009
(Expressed in US Dollars)
Note 1 - Organization and Business Operations
Microelectronics Technology Company (the "Company") was
incorporated in the State of Nevada on May 18, 2005 under
the name Admax Resources Inc., which name was changed on
February 9, 2007 to China YouTV Corp. and then to
Microelectronics Technology Company on August 31, 2009.
From May 18, 2005 to March 15, 2007, the Company's business
operations were limited to the acquisition of a mineral
claim in British Columbia, Canada and the performance of a
limited amount of exploration work.
On March 16, 2007, the Company entered into a Joint Venture
Agreement with Beijing Hua Ju Net Media Technology Co. Ltd.
("Hua Ju") for a term of 20 years to be organized in
Beijing, People's Republic of China ("China"). The purpose
of the Joint Venture was to conduct a video sharing website
and other related internet interactive media businesses in
China. On May 1, 2009, the Joint Venture Agreement was
terminated.
On April 1, 2009, the Company acquired certain assets of
First Light Resources, Inc. ("First Light"), primarily of
mineral claims located in Ontario Canada, pursuant to an
Asset Purchase and Sale Agreement. The purchase price for
the assets was $114,000, payable in cash and/or Company
common stock. No cash was paid to First Light and a total
of 55,000 shares of Company common stock were issued to
three designated parties of First Light, increasing the
issued and outstanding shares of Company common stock from
30,060 shares to 85,060 shares. The Company also assumed a
$10,912 account payable of First Light in connection with
this transaction.
The Company is in the development stage and has not
generated any revenues and has incurred losses of
$1,079,504 since inception. At September 30, 2009, the
Company had $193 cash and $259,219 in current liabilities.
Further, the Company incurred a loss of $2,827 during the
4
three months ended September 30, 2009. In view of these
conditions, the ability of the Company to continue as a
going concern is in substantial doubt and dependent upon
achieving a profitable level of operations and on the
ability of the Company to obtain necessary financing to
fund ongoing operations. To meet these objectives, the
Company continues to seek other sources of financing in
order to support existing operations and expand the range
and scope of its business. However, there are no assurances
that any such financing can be obtained on acceptable
terms, if at all. These financial statements do not give
effect to any adjustments which would be necessary should
the Company be unable to continue as a going concern.
Note 2 - Summary of Significant Accounting Policies
a) Basis of Presentation
These financial statements and related notes are
presented in accordance with accounting principles
generally accepted in the United States, and are
expressed in US dollars. The Company's fiscal year end is
June 30.
b) Use of Estimates
The preparation of these financial statements in
conformity with US generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates. The Company regularly evaluates estimates and
assumptions related to stock-based compensation and
deferred income tax valuations. The Company bases its
estimates and assumptions on current facts, historical
experience and various other factors that it believes to
be reasonable under the circumstances, the results of
which form the basis for making judgments about the
carrying values of assets and liabilities and the accrual
of costs and expenses that are not readily apparent from
other sources. The actual results experienced by the
Company may differ materially and adversely from the
Company's estimates. To the extent there are material
differences between the estimates and the actual results,
future results of operations will be affected.
5
Note 2 - Summary of Significant Accounting Policies
(continued)
c) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in
accordance with SFAS No. 128, "Earnings per Share". SFAS
No. 128 requires presentation of both basic and diluted
earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by
the weighted average number of shares outstanding
(denominator) during the period. Diluted EPS gives effect
to all dilutive potential common shares outstanding
during the period using the treasury stock method and
convertible securities using the if-converted method. In
computing diluted EPS, the average stock price for the
period is used in determining the number of shares
assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.
d) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income,"
establishes standards for the reporting and display of
comprehensive loss and its components in the financial
statements. For the years ended June 30, 2009 and 2008,
the Company has no items that represent a comprehensive
loss and, therefore, has not included a schedule of
comprehensive loss in the financial statements.
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with
maturity of three months or less at the time of issuance
to be cash equivalents.
f) Financial Instruments
SFAS No. 157, "Fair Value Measurements", requires an
entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring
fair value. SFAS No. 157 establishes a fair value
hierarchy based on the level of independent, objective
evidence surrounding the inputs used to measure fair
value. A financial instrument's categorization within the
fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement.
6
Note 2 - Summary of Significant Accounting Policies
(continued)
SFAS No. 157 prioritizes the inputs into three levels
that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there
are quoted prices in active markets for identical assets
or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there
are inputs other than quoted prices that are observable
for the asset or liability such as quoted prices for
similar assets or liabilities in active markets; quoted
prices for identical assets or liabilities in markets
with insufficient volume or infrequent transactions (less
active markets); or model-derived valuations in which
significant inputs are observable or can be derived
principally from, or corroborated by, observable market
data.
Level 3
Level 3 applies to assets or liabilities for which there
are unobservable inputs to the valuation methodology that
are significant to the measurement of the fair value of
the assets or liabilities.
The Company's financial instruments consist principally
of cash, accounts payable and accrued liabilities, and
due to a former related party. Pursuant to SFAS No. 157,
the fair value of our cash equivalents is determined
based on "Level 1" inputs, which consist of quoted prices
in active markets for identical assets. The Company
believes that the recorded values of all of the other
financial instruments approximate their current fair
values because of their nature and respective maturity
dates or durations.
g) Mineral Property Costs
Mineral property exploration costs are expensed as
incurred. Mineral property acquisition costs are
initially capitalized when incurred using the guidance in
EITF 04-02, "Whether Mineral Rights Are Tangible or
Intangible Assets". The Company assesses the carrying
7
Note 2 - Summary of Significant Accounting Policies
(continued)
costs for impairment under SFAS 144, "Accounting for
Impairment or Disposal of Long Lived Assets" at each
fiscal quarter end. When it has been determined that a
mineral property can be economically developed as a
result of establishing proven and probable reserves, the
costs then incurred to develop such property, are
capitalized. Such costs will be amortized using the
units-of -production method over the estimated life of
the probable reserve. If mineral properties are
subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
h) Income Taxes
Potential benefits of income tax losses are not
recognized in the accounts until realization is more
likely than not. The Company has adopted SFAS No. 109
"Accounting for Income Taxes" as of its inception.
Pursuant to SFAS No. 109 the Company is required to
compute tax asset benefits for net operating losses
carried forward. The potential benefit of net operating
losses have not been recognized in these financial
statements because the Company cannot be assured it is
more likely than not it will utilize the net operating
losses carried forward in future years.
i) Foreign Currency Translation
The Company's functional and reporting currency is the
United States dollar. Monetary assets and liabilities
denominated in foreign currencies are translated in
accordance with SFAS No. 52 "Foreign Currency
Translation", using the exchange rate prevailing at the
balance sheet date. Gains and losses arising on
settlement of foreign currency denominated transactions
or balances are included in the determination of income.
Foreign currency transactions are primarily undertaken in
Canadian dollars. The Company has not, to the date of
these financials statements, entered into derivative
instruments to offset the impact of foreign currency
fluctuations.
8
Note 2 - Summary of Significant Accounting Policies
(continued)
j) Reclassifications
Certain reclassifications have been made to the prior
year's financial statements to conform to the current
year period's presentation.
k) Recently Issued Accounting Pronouncements
In February 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
08 (ASU 2010-08), Technical Corrections to Various
Topics. This amendment eliminated inconsistencies and
outdated provisions and provided the needed
clarifications to various topics within Topic 815. The
amendments are effective for the first reporting period
(including interim periods) beginning after issuance
(February 2, 2010), except for certain amendments. The
amendments to the guidance on accounting for income taxes
in reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization
is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008.
For those reorganizations reflected in interim financial
statements issued before the amendments in this Update
are effective, retrospective application is required.
The clarifications of the guidance on the embedded
derivates and hedging (Subtopic 815-15) are effective for
fiscal years beginning after December 15, 2009, and
should be applied to existing contracts (hybrid
instruments) containing embedded derivative features at
the date of adoption. The Company does not expect the
provisions of ASU 2010-08 to have a material effect on
the financial position, results of operations or cash
flows of the Company.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
07 (ASU 2010-07), Not-for-Profit Entities (Topic 958):
Not-for-Profit Entities: Mergers and Acquisitions. This
amendment to Topic 958 has occurred as a result of the
issuance of FAS 164. The Company does not expect the
provisions of ASU 2010-07 to have a material effect on
the financial position, results of operations or cash
flows of the Company.
9
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
06 (ASU 2010-06), Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved
disclosures about fair value measurements on the basis of
input received from the users of financial statements.
This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the
disclosures about purchases, sales, issuances, and
settlements in the roll forward of activity in Level 3
fair value measurements. Those disclosures are effective
for fiscal years beginning after December 15, 2010, and
for interim periods within those fiscal years. Early
adoption is permitted. The Company does not expect the
provisions of ASU 2010-06 to have a material effect on
the financial position, results of operations or cash
flows of the Company.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
05 (ASU 2010-05), Compensation - Stock Compensation
(Topic 718). This standard codifies EITF Topic D-110
Escrowed Share Arrangements and the Presumption of
Compensation.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
04 (ASU 2010-04), Accounting for Various Topics-Technical
Corrections to SEC Paragraphs.
In January 2010, the FASB (Financial Accounting
Standards Board) issued Accounting Standards Update 2010-
03 (ASU 2010-03), Extractive Activities-Oil and Gas
(Topic 932): Oil and Gas Reserve Estimation and
Disclosures. This amendment to Topic 932 has improved
the reserve estimation and disclosure requirements by (1)
updating the reserve estimation requirements for changes
in practice and technology that have occurred over the
last several decades and (2) expanding the disclosure
requirements for equity method investments. This is
effective for annual reporting periods ending on or after
December 31, 2009. However, an entity that becomes
subject to the disclosures because of the change to the
definition oil- and gas- producing activities may elect
10
to provide those disclosures in annual periods beginning
after December 31, 2009. Early adoption is not
permitted. The Company does not expect the provisions of
ASU 2010-03 to have a material effect on the financial
position, results of operations or cash flows of the
Company.
In January 2010, the FASB issued Accounting Standards
Update 2010-02, Consolidation (Topic 810): Accounting and
Reporting for Decreases in Ownership of a Subsidiary.
This amendment to Topic 810 clarifies, but does not
change, the scope of current US GAAP. It clarifies the
decrease in ownership provisions of Subtopic 810-10 and
removes the potential conflict between guidance in that
Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An
entity will be required to follow the amended guidance
beginning in the period that it first adopts FAS 160 (now
included in Subtopic 810-10). For those entities that
have already adopted FAS 160, the amendments are
effective at the beginning of the first interim or annual
reporting period ending on or after December 15, 2009.
The amendments should be applied retrospectively to the
first period that an entity adopted FAS 160. The Company
does not expect the provisions of ASU 2010-02 to have a
material effect on the financial position, results of
operations or cash flows of the Company.
In January 2010, the FASB issued Accounting Standards
Update 2010-01, Equity (Topic 505): Accounting for
Distributions to Shareholders with Components of Stock
and Cash (A Consensus of the FASB Emerging Issues Task
Force). This amendment to Topic 505 clarifies the stock
portion of a distribution to shareholders that allows
them to elect to receive cash or stock with a limit on
the amount of cash that will be distributed is not a
stock dividend for purposes of applying Topics 505 and
260. Effective for interim and annual periods ending on
or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the
provisions of ASU 2010-01 to have a material effect on
the financial position, results of operations or cash
flows of the Company.
11
In December 2009, the FASB issued Accounting
Standards Update 2009-17, Consolidations (Topic 810):
Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities. This
Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 167. (See FAS 167
effective date below)
In December 2009, the FASB issued Accounting
Standards Update 2009-16, Transfers and Servicing (Topic
860): Accounting for Transfers of Financial Assets. This
Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 166. (See FAS 166
effective date below)
In October 2009, the FASB issued Accounting Standards
Update 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt
Issuance or Other Financing. This Accounting Standards
Update amends the FASB Accounting Standard Codification
for EITF 09-1. (See EITF 09-1 effective date below)
In October 2009, the FASB issued Accounting Standards
Update 2009-14, Software (Topic 985): Certain Revenue
Arrangements That Include Software Elements. This update
changed the accounting model for revenue arrangements
that include both tangible products and software
elements. Effective prospectively for revenue
arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early
adoption is permitted. The Company does not expect the
provisions of ASU 2009-14 to have a material effect on
the financial position, results of operations or cash
flows of the Company.
In October 2009, the FASB issued Accounting Standards
Update 2009-13, Revenue Recognition (Topic 605):
Multiple-Deliverable Revenue Arrangements. This update
addressed the accounting for multiple-deliverable
arrangements to enable vendors to account for products or
services (deliverables) separately rather than a combined
unit and will be separated in more circumstances that
under existing US GAAP. This amendment has eliminated
that residual method of allocation. Effective
prospectively for revenue arrangements entered into or
12
materially modified in fiscal years beginning on or after
June 15, 2010. Early adoption is permitted. The Company
does not expect the provisions of ASU 2009-13 to have a
material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting
Standards Update 2009-12, Fair Value Measurements and
Disclosures (Topic 820): Investments in Certain Entities
That Calculate Net Asset Value per Share (or Its
Equivalent). This update provides amendments to Topic
820 for the fair value measurement of investments in
certain entities that calculate net asset value per share
(or its equivalent). It is effective for interim and
annual periods ending after December 15, 2009. Early
application is permitted in financial statements for
earlier interim and annual periods that have not been
issued. The Company does not expect the provisions of ASU
2009-12 to have a material effect on the financial
position, results of operations or cash flows of the
Company.
In July 2009, the FASB ratified the consensus reached
by EITF (Emerging Issues Task Force) issued EITF No. 09-
1, (ASC Topic 470) "Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt
Issuance" ("EITF 09-1"). The provisions of EITF 09-1,
clarifies the accounting treatment and disclosure of
share-lending arrangements that are classified as equity
in the financial statements of the share lender. An
example of a share-lending arrangement is an agreement
between the Company (share lender) and an investment bank
(share borrower) which allows the investment bank to use
the loaned shares to enter into equity derivative
contracts with investors. EITF 09-1 is effective for
fiscal years that beginning on or after December 15, 2009
and requires retrospective application for all
arrangements outstanding as of the beginning of fiscal
years beginning on or after December 15, 2009. Share-
lending arrangements that have been terminated as a
result of counterparty default prior to December 15,
2009, but for which the entity has not reached a final
settlement as of December 15, 2009 are within the scope.
Effective for share-lending arrangements entered into on
or after the beginning of the first reporting period that
13
begins on or after June 15, 2009. The Company does not
expect the provisions of EITF 09-1 to have a material
effect on the financial position, results of operations
or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 168 (ASC Topic
105), "The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No. 162" ("SFAS No. 168").
Under SFAS No. 168 the "FASB Accounting Standards
Codification" ("Codification") will become the source of
authoritative US GAAP to be applied by nongovernmental
entities. Rules and interpretive releases of the
Securities and Exchange Commission ("SEC") under
authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is
effective for financial statements issued for interim and
annual periods ending after September 15, 2009. On the
effective date, the Codification will supersede all then-
existing non-SEC accounting and reporting standards. All
other non-grandfathered non-SEC accounting literature not
included in the Codification will become non-
authoritative. SFAS No. 168 is effective for the
Company's interim quarterly period beginning July 1,
2009. The Company does not expect the adoption of SFAS
No. 168 to have an impact on the financial statements.
In June 2009, the FASB issued SFAS No. 167 (ASC
Topic 810), "Amendments to FASB Interpretation No. 46(R)
("SFAS 167"). SFAS 167 amends the consolidation
guidance applicable to variable interest entities. The
provisions of SFAS 167 significantly affect the overall
consolidation analysis under FASB Interpretation No.
46(R). SFAS 167 is effective as of the beginning of the
first fiscal year that begins after November 15, 2009.
SFAS 167 will be effective for the Company beginning in
2010. The Company does not expect the provisions of SFAS
167 to have a material effect on the financial position,
results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 166, (ASC
Topic 860) "Accounting for Transfers of Financial Assets-
an amendment of FASB Statement No. 140" ("SFAS 166"). The
provisions of SFAS 166, in part, amend the derecognition
guidance in FASB Statement No. 140, eliminate the
14
exemption from consolidation for qualifying special-
purpose entities and require additional disclosures. SFAS
166 is effective for financial asset transfers occurring
after the beginning of an entity's first fiscal year that
begins after November 15, 2009. The Company does not
expect the provisions of SFAS 166 to have a material
effect on the financial position, results of operations
or cash flows of the Company.
In April 2009, the FASB issued SFAS No. 164, (ASC
Topic 810) "Not-for-Profit Entities: Mergers and
Acquisitions - including an amendment of FASB Statement
No. 142" ("SFAS 164"). The provisions of SFAS 164 provide
guidance on accounting for a combination of not-for-
profit entities either via merger or acquisition. SFAS
164 is effective for mergers occurring on or after the
beginning of an initial reporting period beginning on or
after December 15, 2009 and acquisitions occurring on or
after the beginning of the first annual reporting period
beginning on or after December 15, 2009. The Company does
not expect the provisions of SFAS 164 to have a material
effect on the financial position, results of operations
or cash flows of the Company.
In June 2009, the Securities and Exchange
Commission's Office of the Chief Accountant and Division
of Corporation Finance announced the release of Staff
Accounting Bulletin (SAB) No. 112. This staff accounting
bulletin amends or rescinds portions of the interpretive
guidance included in the Staff Accounting Bulletin Series
in order to make the relevant interpretive guidance
consistent with current authoritative accounting and
auditing guidance and Securities and Exchange Commission
rules and regulations. Specifically, the staff is
updating the Series in order to bring existing guidance
into conformity with recent pronouncements by the
Financial Accounting Standards Board, namely, Statement
of Financial Accounting Standards No. 141 (revised 2007)
(ASC Topic 805), Business Combinations, and Statement of
Financial Accounting Standards No. 160 (ASC Topic 810),
Non-controlling Interests in Consolidated Financial
Statements. The statements in staff accounting bulletins
are not rules or interpretations of the Commission, nor
are they published as bearing the Commission's official
15
approval. They represent interpretations and practices
followed by the Division of Corporation Finance and the
Office of the Chief Accountant in administering the
disclosure requirements of the Federal securities laws.
In September 2008, the FASB issued exposure drafts
that eliminate qualifying special purpose entities from
the guidance of SFAS No. 140 (ASC Topic 860), "Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," and FASB
Interpretation 46 (ASC Topic 810) (revised December
2003), "Consolidation of Variable Interest Entities -
an interpretation of ARB No. 51 (ASC Topic 810)," as
well as other modifications. While the proposed revised
pronouncements have not been finalized and the proposals
are subject to further public comment, the Company
anticipates the changes will not have a significant
impact on the Company's financial statements. The
changes would be effective March 1, 2010, on a
prospective basis.
Note 3 - Mineral Claims
As discussed in Note 1, the Company acquired mineral claims
located in Ontario Canada for total consideration of
$124,912, which represents First Light's represented amount
of exploration costs on the properties. Title to the
mineral claims are being held in trust, on behalf of the
Company, by Dog Lake Exploration Inc.
Note 4 - Due to Former Related Party
The Company's former President and Director resigned in
June 2007. The amounts advanced are non-interest bearing,
unsecured and have no specific terms of repayment.
Note 5 - Common Stock
On April 3, 2009, the Company issued a total of 55,000
restricted shares of common stock to three designated
parties of First Light pursuant to the Asset Purchase and
Sale Agreement dated April 1, 2009 (see Note 1).
16
On June 4, 2009, the Company issued a total of 15,000 free
trading shares of common stock to four consultants pursuant
to the Company's 2009 Non-Qualified Stock Compensation Plan
which was approved on April 8, 2009.
The Company has not issued any stock options or other
convertible securities.
Note 6 - Income Taxes
The Company is subject to United States federal and state
income taxes at an approximate rate of 35% (2008 - 35%) The
reconciliation of the provision for income taxes at the
United States federal and state statutory rate compared to
the Company's income tax expense as reported is as follows:
June 30, June 30,
2009 2008
Income tax recovery at statutory rate $ (132,860) $ (172,500)
Stock-based compensation 118,560 132,200
Valuation allowance change 14,300 40,300
_______________________
Provision for income taxes $ - $ -
_______________________
Deferred tax assets consist of:
June 30, June 30,
2009 2008
Net operating loss carryforward $ 113,030 $ 98,730
Less valuation allowance (113,030) (98,730)
________________________
Net deferred tax asset $ - $ -
________________________
Based on management's present assessment, the Company has
not yet determined it to be more likely than not that a
deferred tax asset of $113,030 attributable to the future
utilization of the $322,944 net operating loss carryforward
as of June 30, 2009 will be realized. Accordingly, the
Company has provided a 100% allowance against the deferred
tax asset in the financial statements at June 30, 2009. The
Company will continue to review this valuation allowance
and make adjustments as appropriate. The net operating loss
carryforward expires in years 2025, 2026, 2027, 2028 and
2029 in the amounts of $11,525, $24,918, $130,503, $115,143
and $40,855 respectively.
17
Current tax laws limit the amount of loss available to be
offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available
to offset future taxable income may be limited.
Note 7 - Restatement
The Company has restated its financial statements as at
June 30, 2009 and for the year then ended to adjust for
errors (items (a), (b) and (d)) and reclassification of
amounts (item (c)). The effect of the restatement is to
increase net loss by $138,470.
As at June 30, 2009
_______________________________________
As Previously
a) Balance Sheet Reported Adjustment As Restated
$ $ $
Current liabilities
Accounts payable and accrued
liabilities (62,944) i) 1,530 (66,414)
ii) (5,000)
Due to related party 190,084 iii) (190,084) -
Due to former related party - iii) 190,084 190,084
Stockholders' Deficit
Deferred stock-based
compensation (135,000) iv) 135,000 -
Accumulated deficit (938,207) (138,470) (1,076,677)
As at June 30, 2009
_________________________________________
b) Statement of Operations As Reported Adjustment As Restated
$ $ $
Operating Expenses
General and administrative 241,135 138,470 379,605
_________________________________________
Net Loss for the Year (241,135) (138,470) (379,605)
Net loss per common share
- basic and diluted (5.43) (3.12) (8.55)
a) To reduce amounts owing as accounts payable at June 30, 2009.
b) To record unbilled legal fees owing at June 30, 2009.
c) To reclassify amounts owing to a former related party.
d) To expense deferred compensation for fully vested shares issued.
The Company has restated its financial statements as at
Sept 30, 2009 and for the three month period then ended to
adjust for errors and reclassification of amounts. The
effect of the restatement is to decrease net loss by
$19,965.
18
As at Sept 30, 2009
________________________________________
As Previously
a) Balance Sheet Reported Adjustment As Restated
$ $ $
Current Liabilities
Accounts payable and
accrued liabilities 34,863 (34,863) -
Accounts payable 67,135 67,135
Accrued liabilities 2,000 2,000
Due to related party 218,351 (218,351) -
Due to former related party 190,084
Stockholders' Deficit
Deferred stock-based
compensation (112,500) 112,500 -
Accumulated deficit (960,999) (118,505) (1,079,504)
As at Sept 30, 2009
_________________________________________
As Previously
b) Statement of Operations Reported Adjustment As Restated
$ $ $
Operating Expenses
General and administrative 22,792 (19,965) 2,827
Net loss (22,792) 19,965 (2,827)
Net loss per common share
- - basic and diluted (0.23) 0.20 (0.03)
a) To reclassify accounts payable and accrued liabilities
b) To reclassify amounts owing to a former related party
c) To expense deferred compensation for fully vested shares issued.
Note 8- Subsequent Events
On October 5, 2009, the Company executed a Shares Purchase
Agreement with 722868 Ontario Ltd. ("Seller"), an Ontario
corporation. The agreement provides for the acquisition
from Seller of 51% of the capital stock of Microart
Services Inc. ("Microart"), an Ontario corporation engaged
in the electronic manufacturing and design services
business, in exchange for $500,000 cash and 1,250,000 post
reverse stock split (see succeeding paragraph) shares of
the Company's common stock. The closing, which is subject
to satisfaction of certain conditions precedent to closing,
is to take place on October 15, 2009, or at such other time
as the parties may mutually agree. As at February 23, 2010,
the transaction has not closed.
19
Effective October 6, 2009, the Company effectuated a 1 for
1,000 reverse stock split, thereby reducing the issued and
outstanding shares of Common Stock from 100,060,000 prior
to the reverse split to 100,060 following the reverse
split. The financial statements have been retroactively
adjusted to reflect this reverse stock split.
On October 15, 2009, the Company issued 3,500,000
restricted common shares at $0.01 per share. This included
1,250,000 shares to an Ontario Corporation described above.
On October 15, 2009, the Company authorized issuance of
110,000 Class A preferred shares at $0.01 per share.
On October 20, 2009, the Company authorized issuance of
3,600,000 common shares at $0.01 per share.
The Company has evaluated subsequent events through
February 23, 2010 and has determined that there were no
additional subsequent events to recognize or disclose in
these financial statements.
20
PART I
This Interim Report on Form 10-Q contains forward-
looking statements that have been made pursuant to the
provisions of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and
the Private Securities Litigation Reform Act of 1995 and
concern matters that involve risks and uncertainties that
could cause actual results to differ materially from
historical results or from those projected in the
forward-looking statements. Discussions containing
forward-looking statements may be found in the material
set forth under "Business," "Management's Discussion and
Analysis of Financial Condition and Results of
Operations" and in other sections of this Form 10-Q.
Words such as "may," "will," "should," "could," "expect,"
"plan," "anticipate," "believe," "estimate," "predict,"
"potential," "continue" or similar words are intended to
identify forward-looking statements, although not all
forward-looking statements contain these words. Although
we believe that our opinions and expectations reflected
in the forward-looking statements are reasonable as of
the date of this Report, we cannot guarantee future
results, levels of activity, performance or achievements,
and our actual results may differ substantially from the
views and expectations set forth in this Interim Report
on Form 10-Q. We expressly disclaim any intent or
obligation to update any forward-looking statements after
the date hereof to conform such statements to actual
results or to changes in our opinions or expectations.
Readers should carefully review and consider the
various disclosures made by us in this Report, set forth
in detail in Part I, under the heading "Risk Factors," as
well as those additional risks described in other
documents we file from time to time with the Securities
and Exchange Commission, which attempt to advise
interested parties of the risks, uncertainties, and other
factors that affect our business. We undertake no
obligation to publicly release the results of any
revisions to any forward-looking statements to reflect
anticipated or unanticipated events or circumstances
occurring after the date of such statements.
21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This section of this report includes a number of forward-
looking statements that reflect our current views with
respect to future events and financial performance.
Forward-looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend,
project and similar expressions, or words which, by their
nature, refer to future events. You should not place undue
certainty on these forward-looking statements, which apply
only as of the date of this report. These forward-looking
states are subject to certain risks and uncertainties that
could cause actual results to differ materially from
historical results or our predictions.
Overview of the Company's Business
We are a start-up, development stage company and have not
yet generated or realized any substantial revenues from our
business activities. We were incorporated in the State of
Nevada on May 18, 2005. Initially, we acquired the right to
conduct exploration activities on one property, but we did
not own the property. The property consists of one mineral
claim containing 622 acres located in Similkameen region of
British Columbia, Canada. We had intended to explore for
gold on the property. We have not found any commercially
viable mineral deposit, or a reserve, yet. We do not plan
to have further exploration on this property.
On March 16, 2007, the Company entered into a Joint Venture
Agreement with Beijing Hua Ju Net Media Technology Co. Ltd.
("Hua Ju") for a term of 20 years to be organized in
Beijing, People's Republic of China ("China"). The purpose
of the Joint Venture was to conduct a video sharing website
and other related internet interactive media businesses in
China. On May 1, 2009, the Joint Venture Agreement was
terminated.
On April 1, 2009, the Company acquired certain assets of
First Light Resources, Inc. ("First Light"), primarily 6
mineral claims located in Ontario Canada, pursuant to an
Asset Purchase and Sale Agreement. The purchase price for
the assets was $114,000, payable in cash and/or Company
common stock. No cash was paid to First Light and a total
22
of 55,000 shares of Company common stock were issued to
three designated parties of First Light, increasing the
issued and outstanding shares of Company common stock from
30,060 shares to 85,060 shares. The Company also assumed a
$10,912 account payable of First Light in connection with
this transaction.
On October 5, 2009, the Company executed a Shares Purchase
Agreement with 722868 Ontario Ltd. ("Seller"), an Ontario
corporation. The agreement provides for the acquisition
from Seller of 51% of the capital stock of Microart
Services Inc. ("Microart"), an Ontario corporation engaged
in the electronic manufacturing and design services
business, in exchange for $500,000 cash and 1,250,000 post
reverse stock split (see succeeding paragraph) shares of
the Company's common stock. The closing, which is subject
to satisfaction of certain conditions precedent to closing,
is to take place on October 15, 2009, or at such other time
as the parties may mutually agree.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
None
ITEM 4. CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer,
after evaluating the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) and
15d-15(e) under the Exchange Act) as of the end of the
period covered by this report, have concluded that, based
on the evaluation of these controls and procedures, that
our disclosure controls and procedures were effective.
There were no changes in our internal controls or in other
factors during the period covered by this report that have
materially affected, or are likely to materially affect the
Company's internal controls over financial reporting.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
23
ITEM 1A. RISK FACTORS
There were no material changes to the Risk Factors
disclosed in the Form 10-K/A filed February 23, 2010.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
On April 10, 2009, the Company issued 55,000 restricted
shares of common stock as payment to First Light Resources
Inc. as per the Asset Purchase and Sale Agreement on April
1, 2009.
On June 4, 2009, the Company issued 15,000 free trading
shares of common stock to four consultants as per the
Company's 2009 Non-Qualified Stock Compensation Plan which
was approved on April 8, 2009.
Effective October 6, 2009, the Company effectuated a 1 for
1,000 reverse stock split, thereby reducing the issued and
outstanding shares of Common Stock from 100,060,000 prior
to the reverse split to 100,060 following the reverse
split. This Form 10-K has been retroactively adjusted to
reflect this reverse stock split.
In addition, effective October 6, 2009, the Company's
quotation symbol on the Over-the-Counter Bulletin Board and
Pink Sheets were changed from CYTV to MELY.
On October 15, 2009, the Company issued 3,500,000
restricted common shares at $0.01 per share. This included
1,250,000 shares to an Ontario Corporation described above.
On October 15, 2009, the Company authorized issuance of
110,000 Class A preferred shares at $0.01 per share.
On October 20, 2009, the Company authorized issuance of
3,600,000 common shares at $0.01 per share.
The Company has not issued any stock options or other
convertible securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
24
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
Item 6. Exhibits
31.1 Certification of the Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
31.2 Certification of the Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith.
32.1 Certification of the Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
32.1 Certification of the Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
SIGNATURES
In accordance with the Securities Exchange Act of 1934,
this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on
the dates indicated.
Dated: February 26, 2010
Microelectronics Technology Company
By: /S/ Brian Stewart
Brian Stewart
Chief Executive Officer
& Director
By: /S/ Michael Lee
Michael lee
Chief Financial Officer
25