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EX-31.1 - SECTION 302 CERTIFICATION BY THE CORPORATION'S CHIEF EXECUTIVE AND FINANCIAL OFF - MICROCHANNEL TECHNOLOGIES CORPexhibit_31-1.htm
EX-32.1 - SECTION 906 CERTIFICATION BY THE CORPORATION'S CHIEF EXECUTIVE AND FINANCIAL OFF - MICROCHANNEL TECHNOLOGIES CORPexhibit_32-1.htm
EX-10.1 - CODE OF ETHICS - MICROCHANNEL TECHNOLOGIES CORPexhibit_10-1.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

(Mark One)    
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  
  OF THE SECURITIES EXCHANGE ACT OF 1934  

 

For the fiscal year ended August 31, 2015

 

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

 

 

For the transition period from ___________ to ___________

 

Commission file number: 333-146404

 

MICROCHANNEL TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada   98-0539775
(State or other jurisdiction of   (I.R.S. Employer

incorporation or organization)

 

  Identification No.)
     
1919 NW 19th Street, Suite 302    
     
Fort Lauderdale, FL   33311
(Address of principal executive offices)   (Zip Code)

 

(954) 551-7701

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.       Yes ¨ No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act . Yes ¨      No x

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a 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   Accelerated filer  
           
Non-accelerated filer (Do not check if a smaller reporting company)   Smaller reporting company  
Emerging growth company          

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act.).

Yes x No ¨

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on January 22, 2018 was $256,725.

 

As of January 22, 2018, there were 53,864,600 shares of the registrant’s common stock outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

None.

 

 

 

 

 

 

 

 
 

 

 

TABLE OF CONTENTS

 

MICROCHANNEL TECHNOLOGIES CORPORATION

ANNUAL REPORT ON FORM 10-K

 

FOR THE FISCAL YEAR ENDED AUGUST 31, 2015

PART I   PAGE
     
Item 1. Business 3
     
Item 2. Properties 4
     
Item 3. Legal Proceedings 4
     
Item 4. Mine Safety Disclosures 4
     
PART II    
     
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 5
     
Item 7. Management's Discussion and Analysis of Financial Condition  and Results of Operations 6
     
Item 8. Financial Statements 8
     
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 18
     
Item 9A. Controls and Procedures 18
     
Item 9B. Other Information 19
     
PART III    
     
Item 10. Directors, Executive Officers, and Corporate Governance 20
     
Item 11. Executive Compensation 23
     
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 24
     
Item 13.   Certain Relationships and Related Transactions, and Director Independence 25
     
Item 14.   Principal Accounting Fees and Services 26
     
PART IV    
     
Item 15.   Exhibits, Financial Statement Schedules 27
     
SIGNATURES 28
     
EXHIBIT INDEX 29
     
CERTIFICATIONS  

 

 

 

 
 

 

 

 

PART I

 

Forward-Looking Statements

 

Except for the historical information presented in this document, the matters discussed in this Form 10-K for the year ended August 31, 2015 contain forward-looking statements which involve assumptions and our future plans, strategies, and expectations. These statements are generally identified by the use of words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project,” or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

 

Such forward-looking statements include statements regarding, among other things, (a) our potential profitability and cash flows, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-K generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-K generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

 

Except where the context otherwise requires and for purposes of this Form 10-K only, “we,” “us,” “our,” “Company,” “our Company,” and “MicroChannel” refer to MicroChannel Technologies Corporation.

 

ITEM 1. BUSINESS

 

Description of Business

 

MicroChannel Technologies Corporation (the “Company”) was formed as a wholly-owned subsidiary of New Energy Technologies, Inc. (“New Energy”). New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. We were incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to our existing name, on April 4, 2005.

 

We are not currently engaged in any business operations. We are, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

 

 

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Employees

 

As of August 31, 2015, we did not have any employees.

 

ITEM 2. PROPERTIES

 

Our corporate office is located at 1919 NW 19th Street, Suite 302 , Fort Lauderdale, FL 33311. We are not currently charged rent to utilize this space.

 

ITEM 3. LEGAL PROCEEDINGS

 

As of the date of this report, we are not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. Should any liabilities incur in the future, they will be accrued based on management’s best estimate of the potential loss. As such, there is no adverse effect on our financial position, results of operations or cash flow at this time. Furthermore, we do not believe that there are any proceedings to which any of our directors, officers, or affiliates, or any beneficial owner of record of more than five percent of our common stock, or any associate of any such director, officer, affiliate, or security holder is a party adverse or has a material interest adverse to us.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable.

 

 

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PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Our common stock is quoted on the OTC Markets Group, Inc. OTCQB TM tier (the “OTCQB”) under the symbol “MCTC.”

 

The following table sets forth the high and low bid prices for our common stock for each quarter during the past two fiscal years as quoted on the OTCQB. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

 

    High     Low  
Fiscal Year Ended August 31, 2015                
First Quarter 2015 (September 1 – November 30, 2014)   $ 0.009     $ 0.004  
Second Quarter 2015 (December 1, 2014 – February 28, 2015)   $ 0.007     $ 0.004  
Third Quarter 2015 (March 1 – May 31, 2015)   $ 0.009     $ 0.004  
Fourth Quarter 2015 (June 1 –  August 31, 2015)   $ 0.005     $ 0.003  
             
Fiscal Year Ended August 31, 2014                
First Quarter 2014 (September 1 – November 30, 2013)   $ 0.08     $ 0.01  
Second Quarter 2014 (December 1, 2013 – February 28, 2014)   $ 0.02     $ 0.015  
Third Quarter 2014 (March 1 – May 31, 2014)   $ 0.21     $ 0.006  
Fourth Quarter 2014 (June 1 –  August 31, 2014)   $ 0.009     $ 0.005  
                 

On January 22, 2018, the closing price of our common stock was $0.005 per share.

 

As of January 22, 2018, there were approximately 37 stockholders of record of our common stock.

 

Transfer Agent

 

Our transfer agent is Pacific Stock Transfer Company, with offices at:

6725 Via Austi Parkway

Suite 300

Las Vegas, NV 89119.

 

Dividend Policy

 

We have not paid any dividends on our common stock and our board of directors presently intends to continue a policy of retaining earnings, if any, for use in our operations. The declaration and payment of dividends in the future, of which there can be no assurance, will be determined by the board of directors in light of conditions then existing, including earnings, financial condition, capital requirements and other factors. The Nevada Revised Statutes prohibit us from declaring dividends where, if after giving effect to the distribution of the dividend:

 

  · We would not be able to pay our debts as they become due in the usual course of business; or
  · Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

 

Except as set forth above, there are no restrictions that currently materially limit our ability to pay dividends or which we reasonably believe are likely to limit materially the future payment of dividends on common stock.

 

Our Board of Directors has the right to authorize the issuance of preferred stock, without further stockholder approval, the holders of which may have preferences over the holders of the common stock as to payment of dividends.

 

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

The following discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with our financial statements and the accompanying notes to the financial statements included in this Form 10-K.

 

The MD&A is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions .

 

Background

 

We were formed as a wholly-owned subsidiary of New Energy Technologies, Inc. New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. We were incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to our existing name on April 4, 2005.

 

We are not currently engaged in any business operations. We are, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

 

Results of Operations

 

Years Ended August 31, 2015 and 2014

 

Director and officer fees and professional fees during the periods presented are comparable due to the same level of operations during those periods.

 

The fluctuation in other operating expenses for the years ended August 31, 2015 and 2014 are due to the timing of the payments of state tax and business filing fees.

 

Interest expense for the years ended August 31, 2015 and 2014 is related to the note payable that the Company issued on January 9, 2014, in the amount of $70,000, to a shareholder of the Company. The note payable bears interest at an annual rate of 7% and totaled $8,041 as of August 31, 2015. Principal and accrued interest on the note payable are due on January 9, 2016, after which the annual rate of interest will increase to 10% per annum.

 

Liquidity and Capital Resources

 

As of August 31, 2015, we had an accumulated deficit of $634,903. At August 31, 2015, we had cash and cash equivalents of $5,850 compared to $51,744 at August 31, 2014. In January 2014, we received funding by issuing a $70,000 note payable, which is still outstanding at August 31, 2015. The note payable was due on January 9, 2016 and has not been repaid as of this filing and is thus in default.

 

Net cash used in operating activities was $45,894 for the year ended August 31, 2015, compared to net cash used in operating activities of $39,391 for the prior year. Based on our current level of expenditures, additional funding is required to cover our operations for at least the next twelve months. The company is in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

 

 

 

 

 

 

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Other Contractual Obligations

 

As of the years ended August 31, 2015 and 2014, we do not have any contractual obligations other than the $70,000 note payable and related accrued interest. The note payable was due on January 9, 2016 and has not been repaid as of this filing and is thus in default.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Recently Issued Accounting Pronouncements

 

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to the Company, we have not identified any standards that we believe merit further discussion. We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our financial position, results of operations, or cash flows.

 

We adopted Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements during the year ended August 31, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ITEM 8. FINANCIAL STATEMENTS

 

INDEX TO FINANCIAL STATEMENTS

 

  Page
   
Reports of Independent Registered Public Accounting Firms 9-10
   
Balance Sheets as of August 31, 2015 and 2014 11
   
Statements of Operations for the Years Ended August 31, 2015 and 2014 12
   
Statements of Stockholders’ Equity (Deficit) for the Years Ended August 31, 2015 and 2014 13
   
Statements of Cash Flows for the Years Ended August 31, 2015 and 2014 14
   
Notes to Financial Statements 15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Boyle CPA, LLC

Certified Public Accountant & Consultant

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Board of Directors and

Stockholders of Microchannel Technologies Corporation

 

I have audited the accompanying balance sheet of Microchannel Technologies Corporation (the “Company”) as of August 31, 2015, and the related statements of operations, stockholders’ deficit, and cash flows for year then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.

 

I conducted my audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting. My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, I express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

 

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Microchannel Technologies Corporation as of August 31, 2015, and the results of its operations and its cash flows for the year ended August 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

 

As discussed in Note 2 to the financial statements, the Company’s continuing net losses and negative operating cash flows raise substantial doubt about its ability to continue as a going concern. Management’s plans are also described in Note 2. The financial statements do not include adjustments that might result from the outcome of this uncertainty.

 

/s/ Boyle CPA, LLC

 

Bayville, New Jersey

January 22, 2018

 

 

 

 

 

 

 

 

 

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

MicroChannel Technologies Corporation

Fort Lauderdale, Florida

We have audited the accompanying balance sheet of MicroChannel Technologies Corporation ("the Company") as of August 31, 2014, and the related statements of operations, stockholders' equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MicroChannel Technologies Corporation as of August 31, 2014, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has experienced recurring losses from operations since inception and has a substantial accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/S/ PETERSON SULLIVAN LLP

November 6, 2014

 

 

 

 

 

 

 

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Microchannel Technologies Corporation

BALANCE SHEETS 

       
   August 31,
   2015  2014
ASSETS      
Current Assets:      
  Cash  $5,850   $51,744 
  Total Current Assets   5,850    51,744 
           
TOTAL ASSETS  $5,850   $51,744 
           
           
           
LIABILITIES & STOCKHOLDER'S DEFICIT          
  Current Liabilities:          
  Accounts Payable  $615   $3,315 
  Accrued Interest   8,041    3,141 
  Note Payable to Shareholder   70,000    70,000 
           
  Total Current Liabilities   78,656    76,456 
           
  Total Liabilities   78,656    76,456 
           
  Stockholder's Deficit          
  Common Stock, par value $0.0001,          
      300,000,000 shares Authorized,  53,864,600 shares Issued and          
      Outstanding at August 31, 2015 and August 31, 2014   5,386    5,386 
  Additional Paid-In Capital   556,711    556,711 
  Accumulated Deficit   (634,903)   (586,809)
           
  Total Stockholder's Deficit   (72,806)   (24,712)
           
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT  $5,850   $51,744 
           
The accompanying notes are an integral part of these audited financial statements

 

 

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Microchannel Technologies Corporation
STATEMENTS OF OPERATIONS
       
       
   For the Year Ended
   August 31,
   2015  2014
       
Revenues:  $—     $—   
           
Expenses:          
    Director and Officer fees   6,750    9,000 
    Professional fees   35,829    31,424 
   General and administrative expense   615    1,707 
 Total Operating Expenses   43,194    42,131 
           
 Operating Loss   (43,194)   (42,131)
           
Other  Expense          
Interest expense   4,900    3,141 
           
 Net Loss  $(48,094)  $(45,272)
           
 Basic & Diluted Loss per Common Share  $(0.00)  $(0.00)
           
 Weighted Average Common Shares          
 Outstanding   53,864,600    53,864,600 
           
 The accompanying notes are an integral part of these audited financial statements

 

  

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Microchannel Technologies Corporation
STATEMENT OF STOCKHOLDERS' DEFICIT
   Common Stock         
   Shares  Par Value  Paid in Capital  Accumulated Deficit  Total Stockholders' Equity Deficiency
                
Balance as of August 31, 2013   53,864,600   $5,386   $556,711   $(541,537)  $20,560 
                          
                          
Net Loss   —      —      —      (45,272)   (45,272)
                          
Balance as of August 31, 2014  53,864,600   $5,386   $556,711   $(586,809)  $(24,712)
                          
Net Loss   —      —      —      (48,094)   (48,094)
                          
Balance as of August 31, 2015  53,864,600   $5,386   $556,711   $(634,903)  $(72,806)
 
The accompanying notes are an integral part of these audited financial statements

 

 

 

 

 

 

 

 

 

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Microchannel Technologies Corporation
STATEMENT OF CASH FLOWS
       
       
   For the Years Ended
   August 31,
   2015  2014
CASH FLOWS FROM OPERATING      
ACTIVITIES:      
Net Loss  $(48,094)  $(45,272)
 Adjustments to reconcile net loss to net cash          
 used in operating activities:          
Changes In:          
Prepaid Expenses  $—     $241 
Accounts Payable   (2,700)   2,499 
Accrued Interest   4,900    3,141 
Net Cash Used in Operating Activities   (45,894)   (39,391)
           
CASH FLOWS FROM FINANCING          
  Proceeds from Note Payable   —      70,000 
Net Cash Provided by Financing Activities   —      70,000 
           
Net (Decrease) Increase in Cash   (45,894)   30,609 
Cash at Beginning of Period   51,744    21,135 
           
Cash at End of Period  $5,850   $51,744 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid during the year for:          
Interest  $—     $—   
Franchise Taxes  $—     $—   
           
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES          
None.          
           
The accompanying notes are an integral part of these audited financial statements

 

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MICROCHANNEL TECHNOLOGIES CORPORATION

 

NOTES TO FINANCIAL STATEMENTS

 

August 31, 2015

 

Note 1. Organization and Description of Business

 

MicroChannel Technologies Corporation (the “Company”) was formed as a wholly-owned subsidiary of New Energy Technologies, Inc. (“New Energy”). New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. The Company was incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to its existing name on April 4, 2005.

 

The Company is not currently engaged in any business operations. It is, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

 

Note 2. Going Concern Uncertainties

 

The Company has not generated any revenues, has an accumulated deficit of $634,903 as of August 31, 2015, and does not have positive cash flows from operating activities. The Company expects to incur additional losses as it continues to identify and develop new commercial opportunities. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements.

 

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to identify commercial opportunities and to obtain necessary funding from outside sources. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. Based on the Company’s current level of expenditures, management believes that cash on hand is adequate to fund operations for at least the next twelve months.

 

Note 3.  Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with U.S. GAAP.

 

Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from the estimates as additional information becomes known

 

Cash and Cash Equivalents

 

Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. On occasion, the Company has amounts deposited with financial institutions in excess of federally insured limits.

 

 

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Fair Value of Financial Instruments

 

The Company measures certain financial assets and liabilities at fair value based on 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. The carrying value of cash and cash equivalents and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

 

Income Taxes

 

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

 

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of August 31, 2015 and 2014, the Company has not recorded any unrecognized tax benefits. See Note 6. Income Taxes.

 

Segment Reporting

 

The Company’s business currently operates in one segment.

 

Net Loss per Share

 

The computation of basic net loss per common share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. See Note 4. Net Loss Per Share.

 

Recently Issued Accounting Pronouncements

 

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows.

 

 

Note 4. Net Loss Per Share

 

During the years ended August 31, 2015 and 2014, the Company recorded a net loss. The Company does not have any potentially dilutive securities outstanding. Therefore, basic and diluted net loss per share is the same for those periods.

 

Note 5. Note Payable to Shareholder

 

On January 9, 2014, the Company issued a $70,000 note payable to a shareholder of the Company. The note payable bears interest at an annual rate of 7%. Principal and accrued interest on the note payable were due on January 9, 2016, with a default annual rate of 10% interest after that date. The outstanding balance of principal and accrued interest may be prepaid without penalty. During the years ended August 31, 2015 and August 31, 2014, the Company recorded an interest expense of $4,900 and $3,141, respectively, related to the note payable. Accrued interest at August 31, 2015 related to the note payable was $8,041. At August 31, 2015, the original principal balance of $70,000 on the note payable remained outstanding. The note payable was note repaid on January 9, 2016 and is thus in default as of the date of this filing.

 

 

 

16

 

 
 

 

 

 

Note 6. Income Taxes

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at August 31, 2015 and 2014 are as follows:

 

   Year Ended
   August 31,
   2015  2014
Deferred tax assets:          
Net operating loss carryforwards  $165,470   $147,538 
Capitalized research and development   4,157    5,737 
Research and development credit carry forward   1,963    1,963 
Total deferred tax assets   171,590    155,238 
           
Less: valuation allowance   (171,590)   (155,238)
           
Net deferred tax asset  $—     $—   

 

The net increase in the valuation allowance for deferred tax assets was $16,352 and $15,392 for the years ended August 31, 2015 and 2014. The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

 

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2015 available to offset future federal taxable income, if any, of $486,676, which will fully expire by the fiscal year ended August 31, 2035.  Accordingly, there is no current tax expense for the years ended August 31, 2015 and 2014. In addition, the Company has research and development tax credit carry forwards of $1,963 at August 31, 2015, which are available to offset federal income taxes and fully expire by August 31, 2028.

 

The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

 

The effects of state income taxes were insignificant for the years ended August 31, 2015 and 2014.

 

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the years ended August 31, 2015 and 2014:

 

   Year Ended
   August 31,
   2015  2014
       
Income tax benefit at statutory rate  $16,352   $15,392 
Change in valuation allowance   (16,352)   (15,392)
   $—     $—   

 

The fiscal years 2012 through 2015 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

 

 

On December 22, 2017, the Tax Cuts and Jobs Act was enacted. This law substantially amended the Internal Revenue Code, including reducing the U.S. corporate tax rates. Upon enactment, the Company’s deferred tax asset and related valuation allowance decreased by $64,857 to $106,733. As the deferred tax asset is fully allowed for, this change in rates had no impact on the Company’s financial position or results of operations.

17

 

 
 

 

 

 

ITEM 9. – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On October 10, 2017, we engaged Boyle CPA, LLC, an independent registered public accounting firm, as our principal independent accountant for the year ended August 31, 2015 with the approval of our board of directors. We did not consult with Boyle CPA, LLC on any accounting issues prior to engaging him as our auditor.

 

During the year ended August 31, 2014, there were no disagreements with Peterson Sullivan LLP, the company’s previous principal independent accountant, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Peterson Sullivan LLP would have caused Peterson Sullivan LLP to make reference to the subject matter of the disagreement in its reports on our financial statements for such periods.

 

ITEM 9. A – CONTROLS AND PROCEDURES

 

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

For purposes of this Item 9A, the term disclosure controls and procedures means controls and other procedures of the Company (i) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (15 U.S.C. 78a et seq. and hereinafter the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures do not comply with the requirements in (i) and (ii) above.  

 

Our Chief Executive Officer, Garry McHenry, has reviewed the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) as of the end of the period covered by the report August 31, 2015 and has concluded that (i) the Company’s disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Commission, and (ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  

 

The material weakness identified relates to the lack of proper segregation of duties. The Company believes that the lack of proper segregation of duties is due to the Company’s limited resources.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, our internal control over financial reporting does not provide assurance that a misstatement of our financial statements would be prevented or detected.

 

 

 

 

 

18

 

 

 

 

As of August 31, 2015, management conducted an evaluation of the effectiveness of our internal control over financial reporting and found it to be not effective subsequent to filing our Annual Report on Form 10-K on January 22, 2018 for the year ended August 31, 2015 with the Commission. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that the Company’s internal controls over financial reporting are not effective because as noted in this Annual Report, we have limited resources available. As we obtain additional funding and employ additional personnel, we will implement programs recommended by the Treadway Commission to ensure the proper segregation of duties and reporting channels. Our independent public accountant, Boyle CPA, LLC, has not conducted an audit of our controls and procedures regarding internal control over financial reporting. Consequently, Boyle CPA, LLC expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to internal control over financial reporting.

 

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

 

There were no changes in our internal control over financial reporting identified in connection with our evaluation of these controls as of the end of our last (fourth) fiscal quarter as covered by this report on August 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

 

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. 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. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

ITEM 9. B – OTHER INFORMATION

None.

 

 

19
 

 PART III

 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

DIRECTORS AND EXECUTIVE OFFICERS

 

The following table sets forth the names and ages of all of our directors and executive officers. We have a board of directors comprised of two members. Each director holds office until a successor is duly elected or appointed. Executive officers serve at the discretion of the Board and are appointed by the Board.

 

Also provided herein are brief descriptions of the business experience of each of the directors and officers during the past five years, and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities law.

 

As of the date of the Balance Sheet, August 31, 2015:

 

Name   Age   Position With Company   Director
David Gamache   64   Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director  

August 5, 2008 –

October 13, 2017

             
Jeet S. Sidhu   42   Director   September 2, 2010 – October 13, 2017

 

David Gamache.   From August 2001 until present, Mr. Gamache has been the owner of Allen Lee Group.  Allen Lee Group does personal achievement coaching, business development consulting, and health coaching with various Network Marketing companies. From March 2007 to June 2008 Mr. Gamache was President, Treasurer, and Director of Lake Victoria Mining Company, Inc.  Lake Victoria Mining Company, Inc. is an exploration gold company doing business in Tanzania, Africa.  From September 2008 to present, Mr. Gamache has served and continues to serve as President, Treasurer, and Director of Duke Mountain Resources, Inc.  Duke Mountain Resources, Inc. is a development stage innovative company that focuses on the exploration and development of precious metal deposits in British Columbia, Canada. Mr. Gamache was invited to join the Board of Directors due to his experience with public companies in the matters relating to management, administration, and business development.

 

Jeet S. Sidhu. Mr. Sidhu graduated from the British Columbia Institute of Technology with a Diploma in Corporate Finance in 1995. From 2002-2009, Mr. Sidhu was Vice-President of Montgomery Asset Management Corporation, a privately held firm providing financial and management consulting services to emerging growth corporations.  Mr. Sidhu served as a member of the Board of Directors for U.S. Petroleum Corporation from August 2003 until August 2006.  Mr. Sidhu served as a Director of Janus Resources, Inc. from September 8, 2008 to August 26, 2010 and as a Director of Ceres Ventures, Inc. from June 30, 2010 to August 15, 2012.  Mr. Sidhu was invited to join the Board of Directors due to his experience with public companies in the matters relating to management, administration, financial reporting, legal compliance, and business development.

 

As of the date of filing, January 22, 2018:

 

Name   Age   Position With Company   Director Since
Garry McHenry   59   Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director   October 13, 2017

 

Garry McHenry. McHenry, age 59, started his career in the Telecommunications field in 1991 with Protel, a leading manufacturer of public payphones, where he helped develop one of the first fixed wireless public payphones. He has also served as Manager of Engineering of Wireless Payphones with Technology Service Group (which was one of the leading suppliers to Bell South), as Manager of South-Eastern Sales with U.S. Long Distance, LCI and Qwest Communications, and as Manager of International Sales for American International Telephone where he was responsible for the Nortel switching equipment line of products. He is currently President and sole Director of Digital Utilities, Inc. and a Manager at Matthews International in Ft. Lauderdale, FL. Mr. McHenry is a graduate of the Rochester Institute of Technology.

 

Family Relationships and Other Matters

 

There are no family relationships among or between any of our officers and directors.

 

20

 

 

 

Legal Proceedings

 

During the past ten years none of our directors, persons nominated to become a director, or executive officers, have been involved in any legal proceedings as required to be disclosed pursuant to Item 401 of Regulation S-K..

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

Because we do not have a class of equity securities registered pursuant to section 12 of the Exchange Act we are not required to make the disclosures required by Item 405 of Regulation S-K.

 

 CODE OF ETHICS

 

We have adopted a Code of Ethics that applies to all of our officers, directors and employees, including our Chief Financial Officer and Chief Executive Officer. The Code of Ethics is designed to deter wrongdoing, and to promote, among other things, honest and ethical conduct, full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to the SEC, compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations of the Code of Ethics, and accountability for adherence to the Code of Ethics. A copy of our Code of Ethics may be obtained at no charge by sending a written request to our Chief Executive Officer, Garry McHenry . 1919 NW 19th Street, Suite 302 , Fort Lauderdale, FL 33311.

 

CORPORATE GOVERNANCE

 

 

Board Leadership Structure and Role in Risk Oversight

 

We have no fixed policy on whether the roles of Chairman of the Board and Chief Executive Officer should be separate or combined, with this decision being made based on our best interests considering the circumstances at the time. Currently, these roles are combined with Mr. Garry McHenry serving as both the Chairman of the Board and the Chief Executive Officer. We believe that combining these positions provides an effective leadership structure for our company, given the size of our Board. As Chief Executive Officer, Mr. Henry is involved in our day-to-day operations and thus is in a position to elevate important business issues for consideration by the Board. The Board also believes that the combined role of Chief Executive Officer and Chairman of the Board promotes effective execution of strategic goals and facilitates information flow between management and the Board. Nevertheless, the Board intends to carefully evaluate from time to time whether our Chief Executive Officer and Chairman positions should be combined based on what the Board believes is best for us and our stockholders.

 

Management is responsible for the day-to-day management of risks the company faces, while the board, as a whole and through its committees, is responsible for the oversight of risk management. In its risk oversight role, the Board of Directors monitors whether the risk management processes that management has designed and implemented are effective both as designed and as executed.

 

Board of Directors Meetings, Committees of the Board of Directors, and Annual Meeting Attendance

 

During the fiscal years ended August 31, 2015 and 2014, there were no meetings of the Board of Directors. We do not maintain a policy regarding director attendance at annual meetings and we did not have an annual meeting during the fiscal year ended August 31, 2015.

 

We do not currently have any standing committees of the Board of Directors. The full Board is responsible for performing the functions of: (i) the Audit Committee, (ii) the Compensation Committee and (iii) the Nominating Committee.

 

 

 

 

 

 

 

 

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 Audit Committee

 

The Board does not currently have a standing Audit Committee. The full Board performs the principal functions of the Audit Committee. The full Board monitors our financial reporting process and internal control system and reviews and appraises the audit efforts of our independent accountants.

Compensation Committee

 

The Board does not currently have a standing Compensation Committee. The full Board establishes our overall compensation policies and reviews recommendations submitted by our management.

 

Nominating Committee

 

The Board does not currently have a standing Nominating Committee.  We do not maintain a policy for considering nominees. Our Bylaws provides that the number of Directors shall be fixed from time to time by the Board, but in no event shall be less than the minimum required by law. The Board shall be large enough to maintain our required expertise but not too large to function efficiently. Director nominees are recommended, reviewed and approved by the entire Board.  The Board believes that this process is appropriate due to the relatively small number of directors on the Board and the opportunity to benefit from a variety of opinions and perspectives in determining director nominees by involving the full Board.

 

While the Board is solely responsible for the selection and nomination of directors, the Board may consider nominees recommended by stockholders as it deems appropriate. The Board evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. Although we do not have a policy regarding diversity, the Board does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the Board for selection. Stockholders who wish to recommend a nominee should send nominations to our Chief Executive Officer, Garry McHenry, 1919 NW 19th Street, Suite 302 , Fort Lauderdale, FL 33311, that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors. The recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected.

 

Compensation Consultants

 

We have not historically relied upon the advice of compensation consultants in determining Named Executive Officer compensation. Instead, the full Board reviews compensation levels and makes adjustments based on their personal knowledge of competition in the market place, publicly available information and informal surveys of human resource professionals.

 

Stockholder Communications

 

Stockholders who wish to communicate with the Board of Directors may do so by addressing their correspondence to the Board of Directors at MicroChannel Technologies Corporation, Attention: Garry McHenry, 1919 NW 19th Street, Suite 302 , Fort Lauderdale, FL 33311.  The Board of Director shall review and respond to all correspondence received, as appropriate.

 

 

 

 

 

22

 

 

ITEM 11.  EXECUTIVE COMPENSATION

 

Summary Compensation

 

The following table and descriptive materials set forth information concerning compensation earned for services rendered to us by: the Chief Executive Officer (the “CEO”); the Chief Financial Officer (the “CFO”); and the two other most highly-compensated executive officers other than the CEO and CFO who were serving as executive officers during the fiscal year ended August 31, 2014 (the “Named Executive Officers”).

 

SUMMARY COMPENSATION TABLE

 

The following table summarizes the compensation earned by the Named Executive Officers during the fiscal years ended August 31, 2015 and 2014:

 

 

Name and Principal Position   Year Ended
August 31,
    Salary ($)     Total ($)  
David Gamache     2015       4,500       4,500  
Chief Executive Officer, Chief
Financial Officer,Secretary,
Treasurer, and Director
    2014       6,000       6,000  

 

 

 

OUTSTANDING EQUITY AWARDS AT FISCAL-YEAR END

 

We do not have an employee stock option plan or other benefit plans. Therefore, at August 31, 2015, there were no equity awards outstanding for the Named Executive Officers.

 

COMPENSATION OF DIRECTORS

 

We do not pay director compensation to directors who are also our employees. Our Board of Directors determines the non-employee directors’ compensation for serving on the Board and its committees. In establishing director compensation, the Board is guided by the following goals:

 

  · Compensation should consist of a combination of cash and equity awards that are designed to fairly pay the directors for work required for a company of MicroChannel Technologies Corporation’s size and scope;

 

  · Compensation should align the directors’ interests with the long-term interests of stockholders; and

 

  · Compensation should assist with attracting and retaining qualified directors.

 

In the years ended August 31, 2015 and 2014, non-employee directors received $250 per month for their services as directors. We also reimburse directors for any actual expenses incurred to attend meetings of the Board.

 

In the years ended August 31, 2015 and 2014, we paid $2,250 and $3,000, respectively to Mr. Sidhu as compensation for services rendered as a non-employee director.

 

 

 

 

 

 

 

 

23

 

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information as of August 31, 2015 by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, and (ii) by each director, director nominee, and Named Executive Officer and (iii) by all executive officers and directors as a group:

 

 

Name and Address of Beneficial Owner  Positions and Offices
Held
  Amount and
Nature of
Beneficial
Ownership  (1)
  Percent
of Class (1)
          
Kalen Capital Corporation
700 – 688 West Hastings Street
Vancouver, BC  V6B 1P1
  Stockholder   7,000,000 (2)    13.0%
              
David Gamache
10632 Little Patuxent Parkway, Suite 406, Columbia, MD  21044
  President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director   -0-    -0-%
              
Jeet Sidhu
10632 Little Patuxent Parkway, Suite 406, Columbia, MD  21044
  Director   6,749,600    12.5%
              
Jatinder Bhogal
1962 Knox Road
Vancouver, BC V6T 1S6
  Stockholder   23,000,000    42.7%
              
All Directors and Officers as a Group
(2 persons)
      6,749,600    12.5%

 

 

 

  (1) Calculated pursuant to rule 13d-3(d) of the Exchange Act. Beneficial ownership is calculated based on 53,864,600 shares of common stock issued and outstanding on a fully diluted basis as of October 30, 2014. Unless otherwise stated below, each such person has sole voting and investment power with respect to all such shares. Under Rule 13d-3(d) of the Exchange Act, shares not outstanding which are subject to options, warrants, rights or conversion privileges exercisable within 60 days of January 22, 2018 are deemed outstanding for the purpose of calculating the number and percentage owned by such person, but are not deemed outstanding for the purpose of calculating the percentage owned by each other person listed.

 

  (2)

Represents shares owned by Kalen Capital Corporation, a private Alberta corporation wholly owned by Mr. Harmel Rayat, a former officer, director and controlling stockholder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Payments Upon Termination or Change in Control

 

There are no understandings or agreements known by management at this time which would result in a change in control. 

 

We do not have any change-of-control or severance agreements with any of our executive officers or directors.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

As of August 31, 2015, we do not have an incentive stock option plan and have not granted any warrants or other rights to employees, directors or consultants.

 

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

We do not have a formal written policy for the review and approval of transactions with related parties. However, our Code of Ethics and Corporate Governance Principles require actual or potential conflict of interest to be reported to the Chairman of the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board of Directors and outside legal counsel review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director's independence. If the transaction is deemed to present a conflict of interest, the Board of Directors will determine the appropriate action to be taken.

 

Transactions with Related Persons

 

Since the beginning of the fiscal years ended August 31, 2015 and 2014, there have been no transactions in which we were or are a participant in which the amount involved exceeded $120,000 and in which any related person (as that term is defined for purposes of Section 404 (a) of Regulation S-K) had or will have a direct or indirect material interest and there are currently no such proposed transactions.

 

Review, Approval or Ratification of Transactions with Related Persons

 

Our policy with regard to transactions with related persons is that all material transactions are to be reviewed by the entire Board of Directors for any possible conflicts of interest.  In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms and conditions of the transaction; and (v) the terms available to unrelated parties or the employees generally.  The Board will then document its findings and conclusion in written minutes.

 

Independent Director

 

As of the date of this filing, Our Board of Directors is currently comprised of a sole director, namely Garry Henry, who is not an independent director; as such term is defined under the rules of the Nasdaq Stock Market.

 

 

 

 

 

 

 

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

INDEPENDENT PUBLIC ACCOUNTANTS

 

Boyle CPA, LLC served as our independent registered public accounting firm to audit our financial statements for the fiscal year ended August 31, 2015 and Peterson Sullivan, LLP (“Peterson Sullivan”) served as our independent registered public accounting firm to audit our financial statements for the fiscal year ended August 31, 2014. To the knowledge of management, neither such firm nor any of its members has any direct or material indirect financial interest in us or any connection with us in any capacity otherwise than as independent accountants.

 

Our Board of Directors, in its discretion, may direct the appointment of different public accountants at any time during the year, if the Board believes that a change would be in the best interests of the stockholders. The Board of Directors has considered the audit fees, audit-related fees, tax fees and other fees paid to Peterson Sullivan, as disclosed below, and has determined that the payment of such fees is compatible with maintaining the independence of the accountants.

 

We do not currently have an audit committee.

 

PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The following table presents aggregate fees for professional services rendered by Boyle CPA and Peterson Sullivan during the years ended August 31, 2015 and 2014.

 

 

   Year Ended
August 31,
   2015  2014
Audit fees  $7,800   $15,023 
Tax fees   2,100    2,000 
Total fees  $9,900   $17,023 
           

 

 

 

 

Audit Fees

 

Audit fees for the years ended August 31, 2015 and 2014 consist of the aggregate fees billed by Boyle CPA and Peterson Sullivan for the audit of the financial statements included in our Annual Report on Form 10-K and review of interim financial statements included in the quarterly reports on Form 10-Q during the years ended August 31, 2015 and 2014.

 

Audit-Related Fees

 

There were no audit-related fees billed by Boyle CPA or Peterson Sullivan for the years ended August 31, 2015 and 2014.

 

Tax Fees

 

Tax fees for the years ended August 31, 2015 and 2014 consist of the aggregate fees billed by Boyle CPA and Peterson Sullivan for professional services rendered for tax compliance, tax advice and tax planning.

 

All Other Fees

 

There were no other fees billed by Boyle CPA or Peterson Sullivan for the years ended August 31, 2015 and 2014.

 

26

 
 
 

 

 

 

PART IV

 

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

(a) The following documents are filed as a part of this Form 10-K:

 

 

1.  Financial Statements

 

The following financial statements are included in Part II, Item 8 of this Form 10-K:

 

  · Reports of Independent Registered Public Accounting Firms
  · Balance Sheets as of August 31, 2015 and 2014
  · Statements of Operations for the Years Ended August 31, 2015 and 2014
  · Statements of Stockholders’ Equity (Deficit) for the Years Ended August 31, 2015 and 2014
  · Statements of Cash Flows for the Years Ended August 31, 2015 and 2014
  · Notes to Financial Statements

 

2.  Exhibits

 

The Exhibits listed in the Exhibit Index, which appears immediately following the signature page, are incorporated herein by reference, and are filed as part of this Form 10-K.

 

3.  Financial Statement Schedules

 

Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the financial statements or notes described in Item 15(a)(1) above.

 

 

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SIGNATURES

 

 

Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    MicroChannel Technologies Corporation
    (Registrant)
     
     
January 22, 2018   By /s/ Garry McHenry
    Garry McHenry
    Chief Executive Officer and Chief Financial Officer
    (Principal Executive Officer, Principal Financial Officer, and
    Principal Accounting Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in capacities and on the dates indicated.

 

Signature   Title   Date
         
         
/s/ Garry McHenry   Chief Executive Officer, Chief   January 22, 2018
Garry McHenry   Financial Officer, Director
(Principal Executive Officer,
   
    Principal Financial Officer, and    
    Principal Accounting Officer)    
         

 

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Exhibit Index

 

Exhibit No.   Description of Exhibit
     
3.1   Articles of Incorporation, as amended. (1)
     
3.2   By Laws. (2)
     
10.1   Code of Ethics. *
     
31.1   Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13(a)-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
     
32.1   Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 USC. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

 

 

 

*Filed herewith.

 

  (1) Incorporated by reference to the exhibits filed as part of the report on Form 10-Q filed by MicroChannel Technologies Corporation on April 8, 2010.

 

  (2) Incorporated by reference to the exhibits filed as part of the report on Form SB-2 filed by MicroChannel Technologies Corporation on October 1, 2007.

 

 

 

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