UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

  

☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  

For the quarterly period ended June 30, 2015

  

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

  

For the transition period from ____________ to____________

  

Commission File No. 000-49655

  

NAC GLOBAL TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		87-0678927
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

4720 Salisbury Road

Jacksonville, FL 32256

(Address of principal executive offices)

 

(904) 493-6496

(Registrant’s telephone number, including area code)

  

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

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 ☒   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 mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition 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	☒
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

 

As of August 19, 2015, there were 25,457,014 shares of common stock, $0.001 par value, of the registrant issued and outstanding.

 

 

 

NAC GLOBAL TECHNOLOGIES, INC.

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended June 30, 2015

 

	Page Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	15
Item 4. Controls and Procedures	15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	16
Item 1A. Risk Factors	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3. Defaults Upon Senior Securities	16
Item 4. Mine Safety Disclosures	16
Item 5. Other Information	16
Item 6. Exhibits	17
SIGNATURES	18

 

 

PART I - FINANCIAL INFORMATION

 

Item 1.  Financial Statements 

 

NAC GLOBAL TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
		June 30				December 31
		2015				2014
ASSETS
Current assets:
Cash		$	25,767			$	8,224
Accounts receivable			110,940				91,480
Inventories			38,344				35,168
Prepaid Expenses			-				10,500
Deferred offering and financing costs			42,788				48,725
Total current assets			217,839				194,097
Property and equipment			1,117				1,397
Deposit			-				63,800
Total assets		$	218,956			$	259,294
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable		$	580,148			$	390,578
Accounts payable - related party			78,524				144,646
Accrued expenses			241,440				129,145
Customer deposits			36,566
Short term debt			86,505				84,700
Convertible note, net of unamortized debt discounts			559,109				453,579
Short-term debt - related parties			370,500				380,500
Derivative liability			91,893				297,215
Total current liabilities			2,044,685				1,880,363
Stockholders' deficit
Common stock, $0.001 par value; 150,000,000 shares authorized;
25,632,144 and 25,250,001 shares issued and outstanding			25,632				25,250
Additional paid in capital			726,616				611,105
Accumulated deficit			(2,577,977	)			(2,257,424	)
Total stockholders' deficit			(1,825,729	)			(1,621,069	)
Total liabilities and stockholders' deficit		$	218,956			$	259,294

 

See accompanying notes to unaudited consolidated financial statements.

 

 

NAC GLOBAL TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three months ended June 30								Six months ended June 30
		2015				2014				2015				2014
Revenues		$	196,885			$	113,816			$	319,966			$	269,033
Cost of goods sold			135,889				82,923				227,286				201,996
Gross profit			60,996				30,893				92,680				67,037
Operating expenses
Selling, general and administrative expenses			201,823				132,212				465,697				275,117
Net loss from operations			(140,827	)			(101,319	)			(373,017	)			(208,080	)
Other income (expense)
Other income			1,139				-				1,139				-
Acquisition expenses			-				(275,000	)			-				(275,000	)
Loss on debt extinguishment			(9,047	)			-				(43,925	)			-
Interest expense			(207,711	)			(68,920	)			(374,886	)			(69,925	)
Derivative gain (loss)			180,625				(1,844,474	)			470,136				(1,844,474	)
Net loss		$	(175,821	)		$	(2,289,713	)		$	(320,553	)		$	(2,397,479	)
Net loss per share - Basic and diluted		$	(0.01	)		$	(0.09	)		$	(0.01	)		$	(0.10	)
Weighted average shares outstanding - Basic and diluted			25,511,265				24,384,010				25,393,498				23,578,962

 

See accompanying notes to unaudited consolidated financial statements.

 

 

NAC GLOBAL TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six months ended June 30
		2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(320,553	)		$	(2,397,479	)
Adjustments to reconcile net loss to net cash used in operating activities
Stock compensation expense			90,000				107,875
Derivative (gain) loss			(470,136	)			1,844,474
Loss on debt extinguishment			43,925				-
Amortization of debt discount and deferred financing costs			293,856				59,774
Depreciation expense			280				-
Changes in operating assets and liabilities
Accounts receivable			(19,460	)			5,042
Inventory			(3,176	)			7,085
Prepaid expenses			16,500				-
Accounts payable			166,963				86,644
Accounts payable - related party			(66,122	)			79,552
Accrued expenses			112,385				13,032
Customer deposits			36,566				-
Net cash used in operating activities			(118,972	)			(194,001	)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in intangible asset			-				(4,202	)
Deposits			63,800				(13,500	)
Net cash provided by (used in) investing activities			63,800				(17,702	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt			16,176				-
Payments of short-term debt			(14,461	)			(14,779	)
Proceeds from short-term debt - related parties			-				160,000
Payments of short-term debt - related parties			(10,000	)			(16,500	)
Proceeds from convertible debt, net of original issue discount and fees			81,000				90,000
Payment of deferred offering costs			-				(11,869	)
Net cash provided by financing activities			72,715				206,852
NET INCREASE (DECREASE) IN CASH			17,543				(4,851	)
CASH AT BEGINNING OF YEAR			8,224				10,269
CASH AT END OF PERIOD		$	25,767			$	5,418
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid		$	11,926			$	2,651
Income taxes paid			-				-
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Debt discount resulting from derivative liability			270,116				341,897
Acquisition expenses paid out of convertible debt proceeds			-				275,000
Deferred financing fees paid through issuance of convertible note			9,000				-
Prepaid interest paid through issuance of convertible note			6,000				-
Legal fees paid through issuance of convertible note			10,000				-
Debt converted to equity			10,000				-

 

See accompanying notes to unaudited consolidated financial statements.

 

 

NAC GLOBAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) 

 

NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Operations

NAC Global Technologies, Inc. (“NAC Global”) is an emerging growth, technology development and manufacturing company.

 

NAC Global has one (1) wholly owned, consolidated subsidiary NAC Drive System, Inc. (“NAC”) that is a supplier of harmonic gearing products and precision drives. Harmonic gearing technology (“HGT”) is a precise, high ratio, high efficiency motion control technology that is critical in industrial and national defense applications due to its long life, precision, efficiency, weight-to-power ratio, and size. NAC serves customers globally in a variety of markets, including robotics, machine tools, medical, printing, corrugated, semiconductor and the defense industry. NAC operates out of Jacksonville, Florida and Port Jervis, New York. It maintains an office in Florida and completes the majority of its engineering, sales, assembly, quality inspection, and shipments from its New York facility.

 

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of NAC Global and NAC (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) 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 notes required by US GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K (the “Form 10-K”) filed with the Securities and Exchange Commission on April 15, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2014 as reported in the Form 10-K have been omitted.

 

Principles of consolidation

The consolidated financial statements include the accounts of NAC Global and its wholly-owned subsidiary, NAC. All intercompany accounts and transactions are eliminated in consolidation.

 

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of 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.

 

Concentration of risks

The Company maintains its cash primarily in one financial institution. The balance, at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk to cash.

 

  

Two customers accounted for approximately 30% and 10% of the Company’s revenues for the six months ended June 30, 2015. Two customers accounted for approximately 40% and 14% of the Company’s revenues for the six months ended June 30, 2014. In addition, these customers accounted for 21% and 32% of the Company’s accounts receivable balance at June 30, 2015 and 2014, respectively.

 

Six Months Ended June 30, 2015		Customer				Customer Sales				% of Total Revenue				Accounts Receivable (AR)				% of AR
			1			$	97,275				30	%		$	23,403				21	%
			2			$	32,760				10	%		$	0				0	%
						$	130,035				40	%		$	23,403				21	%

 

Six Months Ended June 30, 2014		Customer				Customer Sales				% of Total Revenue				Accounts Receivable (AR)				% of AR
			1			$	126,884				40	%			9,396				11	%
			2			$	37,440				14	%		$	18,720				21	%
						$	164,324				54	%		$	28,116				32	%

 

The Company sells to both domestic and international customers. For the six months ended June 30, 2015 and 2014, revenues generated through transactions with international customers amounted to approximately 15% (10% Hong Kong, 5% other) and approximately 17.2% (9.8 % India, 6.7% Canada, 0.7 % other), respectively, of the Company’s total revenues.

 

NAC currently purchases all of its drive components from one supplier. The loss of this supplier could cause delays and a possible loss of sales which would affect operating results adversely. 

 

Fair value measurements

The carrying amounts reported in the consolidated balance sheets for accounts receivable and payables, inventory and debt are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, the stated rate of interest is equivalent to rates currently available.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:

 

Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

Level 3: inputs to the valuation methodology are unobservable and significant to the fair value.

 

The following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis, and their level within the fair value hierarchy as of June 30, 2015 and December 31, 2014.

 

As of June 30, 2015		Amount				Level 1				Level 2				Level 3
Embedded conversion derivative liability		$	90,652			$	-			$	-			$	90,652
Warrant derivatives			1,241				-				-				1,241
		$	91,893			$	-			$	-			$	91,893

 

As of December 31, 2014		Amount				Level 1				Level 2				Level 3
Embedded conversion derivative liability		$	297,215			$	-			$	-			$	297,215

 

The following table provides a summary of the changes in fair value, including net transfers in and/or out, of the derivative financial instruments, measured at fair value on a recurring basis using significant unobservable inputs:

 

Balance at December 31, 2014		$	297,215
Fair value of derivative liability at issuance			270,116
Unrealized derivative gain included in other income (expenses)			(470,136	)
Fair value of derivative liability associated with debt converted			(5,302	)
Balance at June 30, 2015		$	91,893

 

 

The fair value of the derivative liability is calculated at the time of issuance and the Company records a derivative liability for the calculated value. The derivative liability is marked to market at each reporting period and changes in the fair value of the derivative liability are recorded in other income (expense) in the consolidated statements of operations.

 

The following are the assumptions used for derivative instruments valued using the Black-Scholes option pricing model:

 

		At June 30, 2015				At Dec 31, 2014
Market value of stock on measurement date		$	0.15			$	0.48
Risk-free interest rate			0.01%-0.11	%			0.04	%
Dividend yield			0				0	%
Volatility factor			71%-87	%			151	%
Term			0.19 to 0.53 year				0.33 year

 

Recently adopted accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 2 - GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, during the six months ended June 30, 2015, the Company incurred net losses of $320,553 and has a working capital deficit of $1,826,846. If the Company is unable to generate profits and is unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The consolidated financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company is taking certain steps to provide the necessary capital to continue its operations. These steps include, but are not limited to: (1) focus on sales to minimize the need for capital at this stage; (2) raise additional capital through equity or debt financing; and (3) continue to focus on reductions in cost where possible.

 

 

NOTE 3 - DEBT

 

Line of credit

As of June 30, 2015 and December 31, 2014, the Company had a term loan with a third party financial institution for $124,000 with an outstanding balance of $70,329 and $84,700, respectively. The note is subject to annual interest of 4.5%. The note is collateralized by all of the assets of NAC and Conic Systems Inc. (“Conic”), an entity owned by Vincent Genovese, the Company’s Chief Executive Officer (“CEO”), and a guarantee issued by Mr. Genovese.

 

On May 1, 2015, the Company issued a revolving $30,000 note for inventory financing.  The note is subject to a 15% annual interest rate and has a term of 120 days.  As of June 30, 2015, the Company has used only $16,176 of the revolving note which remains outstanding as of the balance sheet date and is reported as part of short term debt.

 

Debt with related parties

As of June 30, 2015 and December 31, 2014, the Company had an outstanding non-interest bearing loan from Vincent Genovese, its CEO and majority shareholder, amounting to $20,500. The Company also has an outstanding loan from a family member of Mr. Genovese amounting to $190,000 which is subject to annual interest of three percent (3%). The outstanding balance under this note was $200,000 as of December 31, 2014. The Company made a payment of $10,000 during the six months ended June 30, 2015. Both loans have no stated maturity date.

 

On January 20, 2014, the Company obtained a non-interest bearing loan from Mr. Genovese amounting to $115,000. The loan matured on May 30, 2014 and is currently past due. On May 1, 2015 the note was assumed by Conic.

 

In January and April 2014, the Company obtained non-interest bearing loans from a director each amounting to $10,000. The loans have a term of six (6) months and the outstanding balance on these loans as of June 30, 2015 and December 31, 2014 amounted to $20,000 and are currently past due.

 

In April 2014, the Company issued a note to a director amounting to $25,000. The note is subject to annual interest of 12.5% and a minimum interest of $1,562. The note shall be paid at the earlier of the Company’s receipt of $50,000 in debt or equity funding or 365 days. As of June 30, 2015, the full principal amount of the note remains outstanding and is currently past due.

 

Convertible notes

 

A summary of the activity in convertible notes for the three months ended June 30, 2015 is shown below:

 

Balance at January 1, 2015		$	453,579
Issuance of convertible note			109,000
Original issue debt discount			(3,000	)
Debt discount resulting from derivative liability			(270,116	)
Write off of debt discount due to debt extinguishment			23,299
Debt converted to common stock			(10,000	)
Amortization of debt discount			256,347
		$	559,109

 

On January 8, 2015, the Company issued a 3% original issue discount convertible note to an accredited investor in the amount of $109,000 with a term of one (1) year and a conversion price equal to the lower of $0.50 or 80% of the share price that will be used by the Company in its next share issuance. In connection with the issuance of the note, the Company also issued warrants to purchase 21,800 shares of common stock at an exercise price of $0.63 per share and a term of two (2) years. The note is subject to annual interest of 12% and the Company was required to prepay six (6) months of interest amounting to $6,000 which is included in the principal amount. Due to the variable conversion rate on the notes, the embedded conversion feature and the warrants issued with the note qualified for derivative accounting. The fair value of the embedded conversion option and the warrants including the original issue discount totaling to $95,322 was recognized as a discount to the note. The Company also paid deferring financing fees of $9,000. The debt discount and the deferred financing fees were amortized over the term of the note.

 

On January 13, 2015, the Company amended two of its existing 12% notes totaling $100,000 to increase the interest rate from 12% to 15% and the number of shares issued on these notes from 25,000 shares of common stock to 50,000 shares of common stock. The modification was deemed substantial and was accounted for as a debt extinguishment under ASC 470. The fair value of the additional shares issued, including the unamortized debt discount and deferred financing fees, at the date of modification totaling to $34,878 was recognized as a loss on debt extinguishment. These two notes also became convertible during the three months ended March 31, 2015. Due to the variable conversion rate on the notes, the embedded conversion feature qualified for derivative accounting. The fair value of the embedded conversion option of $88,419 was recognized as a debt discount and amortized over the term of the note.

 

On May 5, 2015, a portion of a convertible note amounting to $10,000 was converted in exchange for 57,143 shares of common stock. The Company compared the fair value of the shares issued with the carrying value of the note converted which includes the corresponding unamortized debt discount and the derivative liability at the date of conversion and recognized a loss on debt extinguishment upon conversion amounting to $9,047.

 

A convertible note with an outstanding balance of $375,000 matured on April 29, 2015 and is currently past due.

 

 

NOTE 4 - EQUITY

 

On January 13, 2015, the Company issued 25,000 shares of common stock in connection with the modification of the Company’s two existing convertible notes. The fair value of the shares amounting to $8,750 was recognized as a loss on debt extinguishment. See Note 3.

 

On April 30, 2015, the Company entered into a consulting agreement with a third party for business development and U.S. government grant assistance.  In connection with such agreement, the Company issued 300,000 restricted shares of common stock as consideration for such services. The fair value of the shares amounting to $90,000 was recognized as stock-based compensation expense.

 

On May 5, 2015 the Company issued 57,143 shares of common stock in connection with the conversion of $10,000 principal amount of a convertible note.

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

The Company recognized revenues for products sold to Conic amounting to $13,322 and $31,462 for the six months ended June 30, 2015 and 2014, respectively. As of June 30, 2015 and December 31, 2014, outstanding accounts receivable from Conic for such sales were $0 and $24,449, respectively. See Note 3.

 

Conic also bills the Company for certain expenses related to payroll and employee benefits, rent and occupancy costs, advertising, travel expenses and other expenses paid for by Conic on behalf of NAC. Payroll and employee benefits billed to NAC were for personnel who spend a percentage of their time on NAC’s operations. The administrative and warehouse facilities used by NAC are owned by the majority shareholder and the allocable cost related to the use of these facilities are likewise charged to NAC by Conic. For the six months ended June 30, 2015, Conic billed the Company $81,748 for services and reimbursement of expenses paid by Conic on behalf of NAC. The outstanding amount payable to Conic related to the above expenses amounted to $78,524 as of June 30, 2015. See Note 3.

 

On May 5, 2015, Mr. Genovese refunded the Company the $63,800 deposit held in connection with the planned acquisition of Conic. See Note 3.

 

NOTE 6 – SUBSEQUENT EVENTS

 

On August 6, 2015 the Company issued 129,870 shares of common stock in connection with the conversion of $10,000 in principal amount of a convertible note.

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Cautionary Note Regarding Forward-looking Statements

 

The following discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2015 should be read together with our consolidated financial statements and related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements and information relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements speak only as of the date of this report. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. Except as required by applicable law, including the securities laws of the United States, we expressly disclaim any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect any change in our expectations with regard thereto or to conform these statements to actual results.

 

The following information should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report.

 

Overview

 

NAC Global Technologies, Inc. is a development and manufacturing company. We manufacture and supply HGT, which is of key importance in the automation, robotics, and defense industries and is gearing technology for precision motion control applications. We have one operating subsidiary, NAC Drive Systems, Inc, and we are expanding our market reach into emerging clean energy and advanced robotic applications. Our corporate headquarters are located in Jacksonville, Florida, and we have manufacturing and warehousing facilities in Port Jervis, New York.

 

HGT is a critical drive to many industries including robotics, semi-conductor, aerospace, and defense. Additionally, HGT is widely used in motion control applications where precision, long-life, compactness, and reliability are important features. We operate in both the commercial and defense industry segments. Within the commercial segment we currently sell to the following industries, among others: robotic, printing, corrugated products, semi-conductor, and health care. Currently, approximately 90% of our revenues are derived from the commercial market.

 

We believe that the use of HGT will increase significantly into other industry segments over the next five (5) years. We believe that the use of HGT in wind turbines has the capability of being transformational to the industry by helping to resolve technical and reliability issues that have plagued the industry for decades. The global wind turbine gearbox market is expected to reach $8.1 billion by 2020 per PR Newswire (Source: Global Information Inc.). Additionally, we plan to expand into the health care market and have an intellectual property pipeline in both the health care and energy segments. We believe our health care initiative complements our defense related initiatives, specifically, because we believe there is a need for more natural and capable prosthetic limbs developed for disabled veterans. We are also exploring how our energy technologies may offer military and emergency power solutions for lightweight, portable power generators. As we further implement our growth strategy, we plan to strategically introduce new products that will diversify our current HGT platform, with a particular focus on new clean energy technologies. In executing on that strategy, we are planning a second product line for an environmentally friendly, non-volatile fuel cell product, suitable for use in aircraft, automotive, defense and portable power applications.

 

We plan to establish production in the United States for new defense and aerospace applications while maintaining sub-contracted manufacturing in Beijing for the majority of commercial applications. Additionally, we intend to augment existing facilities and equipment in the Port Jervis, New York facility, which will be used to manufacture early 100KW wind turbine gearboxes with HGT for lab and field testing as well as to begin research and development of motorized drives for prosthetic limbs. To date, U.S. domestic sales have been handled directly, as are some international sales. We have established distributors in Korea, Brazil, and India with more planned throughout Eastern and Western Europe in particular. We have active customers in Asia, South America, Europe, and the United States — in markets ranging from industrial winches to robots to defense. Our current customers include fortune 500 companies and applications such as robots for inspection of nuclear reactors, communication antennas, and medical machinery.

 

The sales cycle time for larger, higher volume and value applications ranges from 6 to 24 months. Some applications in the defense and aerospace markets require U.S. based manufacturing. Given the sales cycle time, we expect fairly linear growth in the near term with accelerated growth when larger applications in the sales pipeline start to reach full production phase.

   

Recent Events

 

In the three months ended June 30, 2015, the Company has continued to see adoption and demand of its HGT in multiple market segments and geographies. Overall revenues increased by 73% over the prior year and 60% over the prior quarter. Operating losses for the three months ended June 30, 2015, were $140,827 as compared to $232,190 for the three months ended March 31, 2015. The recent customer adoption of our HGT drives is expected to increase recurring revenues. Our sales pipeline includes a large demand, particularly in the robotics and machine tool markets. We anticipate continued strong demand and expect that demand to translate into revenues over the next six to nine months as customers integrate our HGT drives into their production plans.

 

The impediment we continue to face is funding the ramp cycle time. We believe working capital of $500,000 is sufficient cash to fund us over the next six to nine months.

 

  

Results of Operations

 

Comparison of Three Months Ended June 30, 2015 and June 30, 2014

 

Revenues

 

Sales revenues for the three months ended June 30, 2015, totaled $196,885, as compared to $113,816 for the three months ended June 30, 2014. This is a 73% increase over the same period in the prior year. NAC Drive Systems, Inc., our wholly owned operating subsidiary, generated all of our revenues via harmonic gearing product sales. The revenue increase can be attributed to adoption of our drives by original equipment manufacturers. New original equipment manufacturer (“OEM”) sales with anticipated recurring revenues were gained in the semi-conductor, aerospace, machine tool, printing, security/defense, and the robotics markets. The Company is seeing demand for its harmonic gearing product across multiple market segments geographies including North America, Asia, Europe and South America.

 

Cost of Goods - Gross Margin

 

Gross margin was 31% for the three months ended June 30, 2015, as compared to 27% for the three months ended June 30, 2014. Gross margins are expected to further increase as revenues increase due to the economies of scale and reduced concentrations.

 

Operating Expenses

 

Operating expenses for the three months ended June 30, 2015, totaled $201,823, which included $28,167 in capital raising activities, $90,000 of stock based compensation and $18,186 in Securities and Exchange Commission (“SEC”) filing and compliance expenses.

 

Operating expenses for the three months ended June 30, 2014, totaled $132,212, which included $40,000 in non-cash stock compensation expenses to an investor relations firm.

 

Net Loss

 

The net loss for the three months ended June 30, 2015, was $175,821, including $133,403 in amortized debt discount and financing costs, $74,308 in interest expenses, and a derivative gain of $180,625.

 

The net loss for the three months ended June 30, 2014, was $2,289,713, including $40,000 in non-cash stock compensation expenses, $59,774 in debt discount expenses in connection with a $375,000 convertible note, $275,000 in acquisition expenses for the acquisition of a public shell company, $9,146 in interest expenses, and $1,844,474 in derivative loss expenses.

 

Comparison of Six Months Ended June 30, 2015 and June 30, 2014 

 

Revenues

 

Sales revenues for the six months ended June 30, 2015, totaled $319,966, a 19% increase, as compared to $269,033 for the six months ended June 30, 2014. NAC Drive Systems, Inc., our wholly-owned operating subsidiary, generated all of our revenues via harmonic gearing product sales. The revenue increase can be attributed to adoption of our drives by original equipment manufacturers. New OEM sales with anticipated recurring revenues were gained in the semi-conductor, aerospace, machine tool, printing, security/defense, and the robotics markets. The Company is seeing a strong demand for its harmonic gearing product across multiple market segments geographies including North America, Asia, Europe and South America.

 

 

Cost of Goods - Gross Margin

 

Gross margin was 29% for the six months ended June 30, 2015, as compared to 25% for the six months ended June 30, 2014. Gross margins are expected to further increase as revenues increase due to the economies of scale and reduced concentrations. 

 

Operating Expenses 

 

Operating expenses for the six months ended June 30, 2015, totaled $465,697. This amount included $133,231 for capital raising activities, $90,000 of stock based compensation, $45,981 for accounting, $34,502 for SEC compliance and filing expenses, and $7,548 for investor relations.

 

Operating expenses for the six months ended June 30, 2014, totaled $275,117, which included $30,424 for accounting and $111,875 in non-cash stock compensation expenses. Of the $111,875, $40,000 was attributed to an investor relations firm and $71,875 to a board member.

 

The increase year-over-year in operating expenses is mostly attributed to going public and capital raising as part of our business expansion plan.

 

Net Loss 

 

The net loss for the six months ended June 30, 2015 was $320,553, including $293,856 in debt discount/deferred financing expenses in connection with convertible notes, $81,030 in interest expenses, $43,925 loss on debt extinguishment, and $470,136 in a derivative gain.

 

The net loss for the six months ended June 30, 2014 was $2,397,479, including $111,875 in non-cash stock compensation expenses, $59,744 in debt discount expenses in connection with a $375,000 convertible note, $275,000 in acquisition expenses, and $10,151 in interest expenses. 

 

We do not anticipate generating profits for at least the next six months. We believe that 6 months is the minimum time-frame required for significant adoption of our HGT drives into customer production plans. We are planning to increase engineering to support our growing sales pipeline during this period. We believe profitability is achievable within 12 to 18 months without hindering our growth curve potential.

 

Liquidity & Capital Resources

 

Cash and Working Capital.  The Company incurred operating losses of $140,827 and $373,017 for the three and six months ended June 30, 2015, respectively.  The Company incurred a net loss of $175,821 and $320,553 for the three and six months ended June 30, 2015, respectively.  As of June 30, 2015, the Company had cash and a stockholders’ deficit of $25,767 and $1,825,729, respectively. As of June 30, 2015, the Company had a working capital deficit of $1,826,846.

 

Cash Used in Operating Activities.  During the six months ended June 30, 2015, net cash used in operating activities amounted to $118,972, comprised of net loss of $320,553, negative adjustments to reconcile net loss to net cash used in operating activities of $42,075, and changes in operating assets and liabilities of $243,656, compared to net cash used in operating activities for the six months ended June 30, 2014 of $194,001, comprised of net loss of $2,397,479, positive adjustments to reconcile net loss to net cash used in operating activities of $2,012,123, and changes in operating assets and liabilities of $191,355.

 

Cash Used in Investing Activities.  During the six months ended June 30, 2015, no cash was used in investing activities. During the six months ended June 30, 2014, net cash used in investing activities amounted to $17,702, comprised of deposits of $13,500 and an increase in intangible assets of $4,202. 

 

Cash Provided by Financing Activities.  During the six months ended June 30, 2015, the Company received net cash of $72,715 from financing activities, comprised of $81,000 from the issuance of convertible debt and $16,176 from short term debt.  The Company also made payments of $14,461 for a secured bank note and $10,000 in related party debt. During the six months ended June 30, 2014, the Company received net cash of $206,852 from financing activities, comprised of proceeds of $160,000 from short-term debt of related parties and proceeds of $90,000 from the issuance of convertible debt.  The Company also made payments of $14,779 in connection with a line of credit, $16,500 for short-term debt of related parties, and $11,869 for deferred offering costs. 

 

 

Sources of Liquidity.  We are an emerging growth company. Our cumulative net loss since our founding is $2,577,977 as of June 30, 2015, and $2,257,424 as of December 31, 2014. A combination of short-term and long-term debt and private equity sales have assisted in funding our operations and expansion. Management’s strategy to achieve growth includes making investments in plant equipment, personnel, and intellectual property development.  In order to execute this strategy, we will need to raise additional capital through public or private equity offerings, debt financings or other means.  Management believes $500,000 is sufficient to start the next phase of the Company’s growth curve.

 

Without additional funding, the Company may not have sufficient cash resources to meet its needs over the next twelve months.  The Company can give no assurance that such additional funds will be available on reasonable terms, or available at all, or that it will generate sufficient revenue to alleviate the going concern.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

 Private Placements

 

12% Convertible Promissory Notes

 

Overview.  On April 29, 2014, we completed a private offering of $375,000 aggregate principal amount of 12% Convertible Promissory Notes (the “12% Convertible Notes”) by an institutional investor for total net proceeds to the Company of $365,000 after deducting placement agent fees and other expenses. As of June 30, 2015, the aggregate principal amount of the outstanding 12% Convertible Notes was $375,000 and are currently past due.

 

Maturity and Interest.  The 12% Convertible Notes are due on April 29, 2015, if not converted prior to maturity and accrue interest at a rate of 12% on the aggregate unconverted and outstanding principal amount, payable in cash or in shares of common stock on a monthly basis beginning on the sixth (6^th) month anniversary of the issue date. Beginning September 29, 2014, and continuing on each of the following six (6) successive months thereafter, we are obligated to pay 1/7^th of the face amount of the 12% Convertible Notes and accrued interest. Such payments shall, at the Company’s option, be made in cash or, subject to the Company complying with certain conditions, be made in common stock with each share of common stock being ascribed a value that is equal to 60% of the lowest volume weighted average price (“VWAP”) for the thirty (30) consecutive trading days immediately prior to such payment date.

 

Conversion.  The 12% Convertible Notes may be converted, in whole or in part, into shares of common stock at the option of the holder at any time and from time to time. The shares of common stock issuable upon conversion of the 12% Convertible Notes equal: (i) the outstanding principal amount of the convertible note divided by (ii) a conversion price of $0.30, as adjusted from time to time. The 12% Convertible Notes are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances. Additionally, subject to certain limited exceptions, if the Company issues any common stock or warrants or convertible debt entitling any person to acquire common stock at a per share purchase price that is less than the conversion price for the notes, such conversion price will be adjusted to that lower purchase price with certain limited exceptions.

 

Prepayments.  The 12% Convertible Notes may be prepaid in whole or in part at any time upon ten (10) days notice for 125% of the outstanding principal and any remaining interest through maturity.

 

The holders of these notes have the right to convert such notes into 1,250,000 shares of our common stock at any time.

 

 

15% Convertible Notes

 

Overview.  On September 9, 2014, October 3, 2014 and December 23, 2014, we completed private offerings of $150,000 aggregate principal amount of 15% Convertible Promissory Notes, as amended, (the “15% Convertible Notes”) and 150,000 shares of the Company’s common stock with accredited investors for total net proceeds to the Company of $132,000 after deducting placement agent fees and other expenses. As of June 30, 2015, the aggregate principal amount of the outstanding 15% Convertible Notes was $150,000.  

 

Maturity and Interest.  The 15% Convertible Notes are due on the one (1) year anniversary of their respective issuance dates if not converted prior to maturity and accrue interest at a rate of 15% on the aggregate unconverted and outstanding principal amount on a quarterly basis beginning on the three (3) month anniversary of the respective issue date. Such payments shall, at the holder’s option, be made in cash or common stock with each share of common stock being ascribed a value that is equal to 70% of the lowest VWAP for the ten (10) consecutive trading days immediately prior to such payment date.

 

Conversion.  The 15% Convertible Notes may be converted, in whole or in part, into shares of common stock at the option of the holder at any time and from time to time after the occurrence of the 4-month anniversary of the issuance date. The shares of common stock issuable upon conversion of the 15% Convertible Notes equal: (i) the outstanding principal amount of the convertible note divided by (ii) a conversion price equal to 70% of the lowest VWAP for the 10 consecutive trading days immediately prior to such conversion date, as adjusted from time to time. The 15% Convertible Notes are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances.

 

Prepayments.  The 15% Convertible Notes may be prepaid in whole or in part at any time upon ten (10) days notice for 105% of the outstanding principal and any remaining interest through maturity. During the notice period, the notes may be converted at a conversion price equal to 70% of the lowest VWAP for the ten (10) consecutive trading days immediately prior to such conversion date.

 

The holders of these notes have the right to convert such notes into 612,246 shares of our common stock at any time.

  

8% Convertible Notes

 

Overview.  On October 20, 2014 and December 16, 2014, we completed private offerings of $93,000 aggregate principal amount of 8% Original Issue Discount Convertible Promissory Notes (the “8% Convertible Notes”) with accredited investors for total net proceeds to the Company of $70,000 after deducting placement agent fees and other expenses. As of June 30, 2015, the aggregate principal amount of the outstanding 8% Convertible Notes was $83,000.  

 

Maturity and Interest.  The 8% Convertible Notes are due on the one (1) year anniversary of their respective issuance date if not converted prior to maturity and accrue interest at a rate of 8% on the aggregate unconverted and outstanding principal amount payable in cash on a monthly basis.

 

Conversion.  The 8% Convertible Notes may be converted, in whole or in part, into shares of common stock at the option of the holder at any time and from time to time beginning of the date which is 180 days following the issuance date. The shares of common stock issuable upon conversion of the 8% Convertible Notes equal: (i) the outstanding principal amount of the convertible note divided by (ii) a conversion price equal to 70% of the average of five (5) lowest closing bid prices of the common stock within the ten (10) trading days prior to the date of the conversion, as adjusted from time to time. The 8% Convertible Notes are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances.

 

Prepayments.  The 8% Convertible Notes may be prepaid in whole or in part at any time upon three (3) days notice up to 140% of the outstanding principal, depending on the date of the prepayment notice, prior to the 180^th day following the issuance date. The notes may not be prepaid after the 18^th day following the issuance date.

 

The holders of these notes have the right to convert such notes into 379,592 shares of our common stock at any time.

 

January 2015 12% Convertible Notes

 

Overview.  On January 8, 2015, we completed a private offering of $109,000 aggregate principal amount of 3% Original Issue Discount Convertible Promissory Notes (the “January 2015 12% Convertible Notes”) and warrants to purchase shares of the Company’s common stock with accredited investors for total net proceeds to us of $91,000 after deducting placement agent fees and expenses. As of June 30, 2015, the aggregate principal amount of the outstanding January 2015 12% Convertible Notes was $109,000.  

 

Maturity and Interest.  The January 2015 12% Convertible Notes are due on January 8, 2016, if not converted prior to maturity and accrue interest at a rate of 12% on the aggregate unconverted and outstanding principal amount payable in cash on a monthly basis. Beginning July 8, 2015, and continuing on each of the following six (6) successive months thereafter, the Company is obligated to pay 1/7th of the face amount of the January 2015 12% Convertible Notes and accrued interest. Such payments shall, at the Company’s option, be made in cash or, subject to the Company complying with certain conditions, be made in common stock with each share of common stock being ascribed a value that is equal to 60% of the lowest VWAP for the twenty (20) consecutive trading days immediately prior to such payment date.

 

 

Conversion.  The January 2015 12% Convertible Notes may be converted, in whole or in part, into shares of common stock at the option of the holder at any time and from time to time. The shares of common stock issuable upon conversion of the January 2015 12% Convertible Notes equal: (i) the outstanding principal amount of the convertible note divided by (ii) the lesser of (a) $0.50 or (b) 80% of the price at which the Company next issues shares of common stock or common stock equivalents, as adjusted from time to time. The January 2015 12% Convertible Notes are subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change and dilutive issuances. Additionally, subject to certain limited exceptions, if the Company issues any common stock or warrants or convertible debt entitling any person to acquire common stock at a per share purchase price that is less than the conversion price for the notes, such conversion price will be adjusted to that lower purchase price with certain limited exceptions

  

Warrants. The warrants issued in the offering are exercisable for an aggregate of 21,800 shares of the Company’s common stock. The warrants are exercisable for a period of two years from the original issue date. The exercise price with respect to the warrants is $0.63 per share. The exercise price for the warrants is subject to adjustment upon certain events, such as stock splits, combinations, dividends, distributions, reclassifications, mergers or other corporate change.

 

Prepayments.  The January 2015 12% Convertible Notes may be prepaid in whole or in part at any time upon ten (10) days notice up to 125% of the outstanding principal and interest.

 

May 2015 15% Secured Promissory Notes

 

Overview. On May 1, 2015, we issued a term note to a third party for the principal amount of $30,000 (the “May 2015 15% Secured Promissory Note”) for inventory financing. As of June 30, 2015, the aggregate principal amount of the outstanding May 2015 15% Secured Promissory Note was $936.

 

Maturity and Interest. The May 2015 15% Secured Promissory Notes are due on the earlier of one hundred twenty (120) days from the issuance date or within seven (7) days of the Company’s receipt of payment on receivables as described in the May 2015 15% Secured Promissory Notes and accrue interest at an annual rate of 15%.

 

Prepayments. The May 2015 15% Secured Promissory Notes may be prepaid in whole or in part at any time without penalty.

 

Security. The May 2015 15% Secured Promissory Notes are secured by certain receivables identified by purchase orders provided by the Company to a third party prior to the funding of the May 2015 15% Secured Promissory Notes.

 

Going Concern

 

The financial conditions evidenced by the accompanying financial statements raise substantial doubt as to our ability to continue as a going concern.  Our plans include obtaining additional capital through debt or equity financing.  The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 

Critical Accounting Policies

 

Use of Estimates 

 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of 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. 

 

Revenue Recognition 

 

All revenue is recognized when persuasive evidence of an arrangement exists, the service or sale is complete, the price is fixed or determinable and collectability is reasonably assured. Revenue from product sales is recognized when products are shipped to customers.  The Company’s revenues include sales to customers domiciled outside of the United States. Generally, these sales are denominated in U.S. dollars.  

 

Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods when the applicable revenue recognition criteria have been met.

 

All amounts billed to customers for shipping and handling costs are included in revenues in the statements of operations.

 

Accounts Receivable

 

Accounts receivable arise from the sale of products on trade credit terms and are stated net of an allowance for doubtful accounts.  The Company performs ongoing credit evaluations of its customers which may result in the requirement of a deposit before fulfillment of the terms of the sales orders.  Accounts are generally considered past due after thirty (30) days.  Past due receivables do not accrue interest. An allowance for doubtful accounts is provided for those accounts receivables considered to be uncollectable based on historical experience and management’s evaluation of outstanding receivable amounts at the end of the period.   The Company has determined that no allowance for doubtful accounts is required as of June 30, 2015, and December 31, 2014.

 

 

Inventory

 

Inventory consists primarily of purchased finished goods and packaging materials.  Inventory costs are determined using the average method and are carried at the lower of cost or net realizable value.  Inventory is reviewed periodically for slow-moving and obsolete items.

 

Off Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.

 

Item 4.  Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As of June 30, 2015, the Company carried out an evaluation by the Company’s Chief Executive Officer, who is also our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. As discussed below, management has concluded that as of June 30, 2015 our disclosure controls and procedures were not effective.

 

As of June 30, 2015, we identified certain matters that constituted a material weakness in our internal controls over financial reporting. Specifically, we have difficulty in accounting for complex accounting transactions and have limited segregation of duties within our accounting and financial reporting functions. Segregation of duties within our Company is limited due to the small number of employees that are assigned to positions that involve the processing of financial information. Although we are aware that segregation of duties within our Company is limited, we believe (based on our current roster of employees and certain control mechanisms we have in place) that the risks associated with having limited segregation of duties are currently insignificant. Additional time is required to expand our staff, fully document our systems, implement control procedures and test their operating effectiveness before we can definitively conclude that we have remediated our material weakness.

 

Limitations of the Effectiveness of Control

 

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations of any control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company’s internal control over financial reporting that occurred during the period ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

From time to time, the Company is subject to legal proceedings arising in the ordinary course of business. Such matters are subject to uncertainties and outcomes are not predictable with assurance. Management believes at this time that there are no ongoing matters that will have a material adverse effect on the Company's business, financial position, results of operations or cash flows.

 

Item 1A.  Risk Factors

 

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

As of June 30, 2015, the Company was in default of the $375,000 12% Convertible Notes having not paid interest and amortization payments of principal when due. Although the Company did not receive a formal notice of default from the investors, such defaults caused the Company to be in cross-default of the 15% Convertible Notes and the January 2015 12% Convertible Notes.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

(a)

None.

 

(b)

There have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

 

 

Item 6. Exhibits.

 

Exhibit No.		Identification of Exhibit
31.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

 

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

			NAC GLOBAL TECHNOLOGIES, INC.
Date:	August 19, 2015		By:	/s/ Vincent Genovese
				Vincent Genovese President and Chief Executive Officer
Date:	August 19, 2015		By:	/s/ Vincent Genovese
				Vincent Genovese Principal Financial Officer

 

 

   

EXHIBIT INDEX

 

Exhibit No.		Identification of Exhibit
31.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

 

In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

 

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