CHANGING TECHNOLOGIES, INC. - FORM 10-Q

Attached files

file	filename
EX-21 - SUBSIDIARIES OF THE REGISTRANT - CHANGING TECHNOLOGIES, INC.	ex_21.htm
EX-31 - RULE 13(A)-14(A)/15(D)-14(A) CERTIFICATION - CHANGING TECHNOLOGIES, INC.	ex_31-1.htm
EX-32.1 - SECTION 1350 CERTIFICATION - CHANGING TECHNOLOGIES, INC.	ex_32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


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

For the quarterly period ended September 30, 2015


o	TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 0-55495

CHANGING TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Nevada		46-3004792
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

777 South Post Oak Lane, Suite 1700 Houston, TX		77056
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: 713-300-3806

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 þ No o

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.

Yes þ No o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ
(Do not check is 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 o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 17, 2015, 60,000,000 shares of common stock are issued and outstanding.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION	4

Item 1. Financial Statements	4

Consolidated Balance Sheets (Unaudited)	4

Consolidated Statements of Operations (Unaudited)	5

Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited)	6

Consolidated Statements of Cash Flows (Unaudited)	7

Notes to the Unaudited Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3. Quantitative and Qualitative Disclosures about Market Risk	15

Item 4. Controls and Procedures	15

PART II — OTHER INFORMATION	16

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	17

Item 6. Exhibits	17

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

When used in this report, the terms, “we,” the “Company,” “our,” and “us” refers to Changing Technologies, Inc., a Nevada corporation.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHANGING TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30, 2015			June 30, 2015
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	1,459		$	1,346
Accounts receivable		100			—
Total current assets		1,559			1,346

TOTAL ASSETS	$	1,559		$	1,346

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	115,284		$	224,539
Current portion of accrued interest payable		15,239			—
Current portion of convertible notes payable, net of discount of $134,744 and $0, respectively		17,646			—
Total current liabilities		148,169			224,539

Accrued interest payable		12,918			18,004
Convertible notes payable, net of discount of $452,892 and $383,083, respectively		14,146			19,724
TOTAL LIABILITIES		175,233			262,267

STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value; 480,000,000 shares authorized; 60,000,000 shares issued and outstanding at September 30, 2015 and June 30, 2015		60,000			60,000
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 1,000,000 shares issued and outstanding at September 30, 2015 and June 30, 2015		1,000			1,000
Additional paid-in capital		598,428			381,807
Accumulated deficit		(833,102	)		(703,728	)
Total stockholders’ deficit		(173,674	)		(260,921	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,559		$	1,346

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three months ended September 30,
	2015			2014


REVENUE	$	100		$	—

OPERATING EXPENSES
General and administrative expenses		107,253			96,695

LOSS FROM OPERATIONS	$	(107,153	)	$	(96,695	)

OTHER INCOME (EXPENSE)
Interest expense		(22,221	)		—
Total other income (expense)		(22,221	)		—

NET LOSS	$	(129,374	)	$	(96,695	)

NET LOSS PER COMMON SHARE – Basic and diluted	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – Basic and diluted		60,000,000			60,000,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)


	Common Stock			Series E Preferred Stock			Additional Paid In		Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit			Total

BALANCE, June 30, 2015	60,000,000	$	60,000	1,000,000	$	1,000		381,807	$	(703,728	)	$	(260,921	)

Beneficial conversion discount on convertible notes payable	—		—	—		—		216,621		—			216,621
Net loss	—		—	—		—		—		(129,374	)		(129,374	)

BALANCE, September 30, 2015	60,000,000	$	60,000	1,000,000	$	1,000	$	598,428	$	(833,102	)	$	(173,674	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHANGING TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three months ended September 30,
	2015			2014

OPERATING ACTIVITIES:
Net loss	$	(129,374	)	$	(96,695	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on convertible note payable		12,068			—

Changes in operating assets and liabilities:
Accounts receivable		(100	)		—
Accounts payable and accrued liabilities		(109,255	)		35,865
Accrued interest payable		10,153			—

NET CASH USED IN OPERATING ACTIVITIES		(216,508	)		(60,830	)

INVESTING ACTIVITIES
Acquisition of subsidiary		—			(65,000	)
NET CASH USED IN INVESTING ACTIVITIES		—			(65,000	)

FINANCING ACTIVITIES
Proceeds from convertible notes		216,621			126,390
NET CASH PROVIDED BY FINANCING ACTIVITIES		216,621			126,390

NET INCREASE IN CASH		113			560

CASH, at the beginning of the period		1,346			26,000

CASH, at the end of the period	$	1,459		$	26,560

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	—		$	—
Taxes	$	—		$	—

Noncash investing and financing transaction:
Beneficial conversion discount on convertible note payable	$	216,621		$	152,390

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHANGING TECHNOLOGIES, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

Note 1. General Organization and Business

Changing Technologies, Inc., a Nevada corporation (the “Company”), was originally formed to develop apps primarily focused on improving personal and business productivity and health and fitness monitoring. The Company was incorporated on June 18, 2013. The Company’s year-end is June 30.

On June 25, 2014, we formed a new subsidiary, 6th Dimension Technologies, Inc. (“6D3D”), a Texas corporation to pursue opportunities in the 3D printing market.

On July 25, 2014, 6D3D purchased SumLin Technologies, LLC (“SumLin”), a North Carolina corporation for $150,000 to be paid over a five-month period. SumLin specialized in personalizing 3D printing for consumer end use. As a result of the SumLin acquisition, the Company ceased being a shell company on July 25, 2014.

On July 27, 2014, the Board of Directors authorized ten million shares of preferred stock.

On August 13, 2014, we issued a five-for-one stock dividend, where each shareholder at the close of business on July 21, 2014 received four additional shares of common stock for every share they held on the record date. The stock dividend was approved by our Board of Directors and stockholders holding a majority of our voting shares

On November 20, 2014, our board of directors designated 1,000,000 shares of Series E preferred stock, with a par value of $0.001 per share. On the same date, we issued 1,000,000 shares of preferred stock to Bordesley Group Corp. (“Bordesley”) for services provided. On the date of the transaction, Bordesley owned 45,000,000 shares of our common stock. They are a beneficial owner, as they own 75% of our outstanding common shares.

On June 24, 2015, we reincorporated from Florida to Nevada. Each shareholder in the Nevada company received one share of common stock for each share of common stock that they held in the Florida company.

Note 2. Going Concern

During the three months ended September 30, 2015, the Company incurred net losses of $129,374. For the three months ended September 30, 2015, the Company negative cash flow from operating activities of $216,508. As of September 30, 2015, the Company had negative working capital of $146,610. Management does not anticipate having positive cash flow from operating activities in the near future.

These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.

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In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company, which we will use to finance the Company’s future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.

Note 3. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These Consolidated financial statements should be read in conjunction with the consolidated financial statements for the fiscal year ended June 30, 2015 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the SEC.

The results of operations for the three month period ended September 30, 2015 are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2016.

Principles of Consolidation

The consolidated financial statements include the accounts and operations of Changing Technologies, Inc., and its wholly owned subsidiaries, 6^th Dimension Technologies, Inc., a Texas corporation, and SumLin Technologies, LLC (collectively referred to as the “Company”). All material intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For the purpose of the consolidated financial statements, cash and cash equivalents include all highly liquid investments with maturity of three months or less. Cash was $1,459 and $1,346 at September 30, 2015 and June 30, 2015, respectively. The Company has no cash equivalents as of September 30, 2015 and June 30, 2015.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.

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Beneficial Conversion Discount

The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the date the note is due using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion.

Cash Flow Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

Deferred Income Taxes and Valuation Allowance

The Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of June 30, 2015 or September 30, 2015.

Revenue Recognition

The Company follows ASC 605, Revenue Recognition recognizing revenue when persuasive evidence of an arrangement exists, product delivery has occurred or the services have been rendered, the price is fixed or determinable and collectability is reasonably assured.

Earnings (Loss) per Common Share

The Company computes basic and diluted earnings per common share amounts in accordance with ASC Topic 260, Earnings per Share. The basic earnings (loss) per common share are calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per common share are calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no dilutive shares outstanding for any periods reported.

Financial Instruments

The Company’s consolidated balance sheets include certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.

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FASB Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value 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. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


	Level 1 -	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

	Level 2 -	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	Level 3 -	Inputs that are both significant to the fair value measurement and unobservable.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. As of September 30, 2015 and June 30, 2015, the company has no commitments and contingencies.

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Recently Issued Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

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Note 4. Convertible Notes Payable

Convertible notes payable consist of the following at September 30, 2015 and June 30, 2015:


	September 30, 2015			June 30, 2015
Convertible note dated September 30, 2014, bearing interest at 10% per annum, maturing on September 30, 2016 and convertible into shares of common stock at $0.50 per share	$	152,390		$	152,390
Convertible note dated December 31, 2014, bearing interest at 10% per annum, maturing on December 31, 2016 and convertible into shares of common stock at $0.41 per share		108,259			108,259
Convertible note dated March 31, 2015, bearing interest at 10% per annum, maturing on March 31, 2017 and convertible into shares of common stock at $0.09 per share		49,659			49,659
Convertible note dated June 30, 2015, bearing interest at 10% per annum, maturing on June 30, 2017 and convertible into shares of common stock at $0.09 per share.		92,499			92,499
Convertible note dated September 30, 2015, bearing interest at 10% per annum, maturing on September 30, 2018 and convertible into shares of common stock at $0.03 per share.		216,621			—
Total convertible notes payable	$	619,428		$	402,807

Less: discount on convertible notes payable		(587,636	)		(383,083	)
Less: current portion of convertible notes payable		(17,646	)		—
Convertible notes payable, net of discount	$	14,146		$	19,724

All principal with accrued interest is payable on the maturity date. The notes are convertible into common stock of the Company at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company.

Convertible Promissory Notes issued

During the three months ended September 30, 2015, the Company received various advances from a third party, which were, as agreed with the third party at the inception, to be recorded as a convertible note payable at the end of the quarterly period.. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest at maturity. The Convertible Promissory Note and unpaid accrued interest are convertible into common stock at the option of the holder.


Date Issued	Maturity Date	Interest Rate	Conversion Rate		Amount of Note		Beneficial Conversion Feature
September 30, 2015	September 30, 2018	10%	$	0.03	$	216,621	$	216,621
Total					$	216,621	$	216,621

The Company evaluated the terms of the new note in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the note and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized a beneficial conversion discount of $216,621 on September 30, 2015. We recorded the beneficial conversion discount as an increase in additional paid-in capital and a discount to the convertible notes payable. Discounts to the convertible notes payable are being amortized to interest expense over the life of the respective notes. During the three months ended September 30, 2015 and 2014, we recorded amortization of discounts on convertible notes payable of $12,068 and $0, respectively.

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Note 5. Debt Commitments


	Twelve months ended September 30,
	2016		2017		2018		2019		2020		Total
Convertible notes payable	$	152,390	$	250,417	$	216,621		—		—	$	619,428
Acquisition of SumLin	$	35,000		—		—		—		—	$	35,000
Total	$	187,390	$	250,417	$	216,621		—		—	$	654,428

Note 6. Subsequent Events

The Company evaluated material events occurring between the end of our fiscal year, June 30, 2015, and through the date when the consolidated financial statements were available to be issued for disclosure consideration.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

On June 25, 2014, we formed a new subsidiary, 6th Dimension Technologies, Inc. (“6D3D”), a Texas corporation to pursue opportunities in the 3D printing market.

On July 27, 2014, the Board of Directors authorized ten million shares of preferred stock.

Critical Accounting Policies

We prepare our Consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the condensed Consolidated financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed Consolidated financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended June 30, 2015 on Form 10-K.

Results of Operations

Three months ended September 30, 2015 compared to the three months ended September 30, 2014.

Revenue

We recognized $100 and $0 of revenue during the three months ended September 30, 2015 and 2014, respectively. The revenue is related to the custom 3D printing of a machinery component.

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General and Administrative Expenses

We recognized general and administrative expense in the amount of $107,253 and $96,695 for the three months ended September 30, 2015 and 2014, respectively. The increase was due to increased professional fees as a result of expanding our operations.

Interest Expense

Interest expense increased from $0 for the three months ended September 30, 2014 to $22,221 for the three months ended September 30, 2015. Interest expense for the three months ended September 30, 2015 included amortization of discount on convertible notes payable in the amount of $12,068, compared to $0 for the comparable period of 2014. The remaining amount is interest accrued on our convertible debt.

Net Loss

We incurred a net loss of $129,374 for the three months ended September 30, 2015 as compared to $96,695 for the comparable period of 2014. The increase in the net loss was driven by increase in professional fees and interest expense, as discussed above.

Liquidity and Capital Resources

As of September 30, 2015, we had cash on hand of $1,459 and negative working capital of $146,610. Net cash used in operating activities for the three months ended September 30, 2015 was $216,508. Cash on hand is adequate to fund our operations for less than one month. We do not expect to achieve positive cash flow from operating activities in the near future. We will require additional cash in order to implement our business plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable to the Company. We have no material commitments for capital expenditures as of September 30, 2015.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Internal Control over Financial Reporting

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2015. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2015, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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	1.	As of September 30, 2015, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

	2.	As of September 30, 2015, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Our management, including our principal executive officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. 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. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Change in Internal Controls Over Financial Reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.

ITEM 1A. RISK FACTORS

Not applicable to a smaller reporting company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered equity securities during the three months ended September 30, 2015.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company has not defaulted upon senior securities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to the Company.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


3.1	Articles of Incorporation (1)

3.2	Bylaws (1)

21	Subsidiaries of the Registrant (2)

31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and account officer. (2)

32.1	Section 1350 Certification of principal executive officer and principal financial accounting officer. (2)

101	XBRL data files of Financial Statement and Notes contained in this Quarterly Report on Form 10-Q. (2)(3)

__________


(1)	Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on July 29, 2013.

(2)	Filed or furnished herewith.

(3)	In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “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.


	Changing Technologies, Inc.


Date: November 23, 2015	BY: /s/ Marco Valenzuela
	Marco Valenzuela
	CEO, President and Chairman

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Attached files

CHANGING TECHNOLOGIES, INC. Reports

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