• Filing Date: 2019-01-11
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Document and Entity Information - shares
3 Months Ended
Nov. 30, 2018
Jan. 14, 2019
Document And Entity Information    
Entity Registrant Name MICROCHANNEL TECHNOLOGIES CORP  
Entity Central Index Key 0001413488  
Document Type 10-Q  
Document Period End Date Nov. 30, 2018  
Amendment Flag false  
Current Fiscal Year End Date --08-31  
Document Fiscal Period Focus Q1  
Entity Filer Category Non-accelerated Filer  
Entity Common Stock, Shares Outstanding   183,864,600
Document Fiscal Year Focus 2019  
Entity Transition Period false  
Entity Emerging Growth Company true  
Entity Small Business true  
v3.10.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
Nov. 30, 2018
Aug. 31, 2018
Current Assets:    
Cash $ 4,677 $ 4,652
Total Current Assets 4,677 4,652
TOTAL ASSETS 4,677 4,652
Current Liabilities:    
Accounts Payable 10,618 11,688
Accounts Payable - Related Party 6,700 6,200
Accrued Interest 30,051 28,306
Accrued Interest - Related Party 1,634 857
Note Payable - Related Party 37,910 22,554
Note Payable to Shareholder 70,000 70,000
Total Current Liabilities 156,913 139,605
Total Liabilities 156,913 139,605
Stockholder's Deficit    
Preferred Stock, par value $0.0001,10,000,000 shares Authorized, 0 shares Issued and Outstanding at August 31, 2018 and August 31, 2017
Common Stock, par value $0.0001, 290,000,000 shares Authorized, 183,864,600 shares Issued and Outstanding at August 31, 2018 and 53,864,600 shares Issued and Outstanding at August 31, 2017 18,386 18,386
Additional Paid-In Capital 584,665 584,665
Accumulated Deficit (755,287) (738,004)
Total Stockholder's Deficit (152,236) (134,953)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 4,677 $ 4,652
v3.10.0.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Nov. 30, 2018
Aug. 31, 2018
Statement of Financial Position [Abstract]    
Preferred stock, par or stated value per share (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par or stated value per share (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 290,000,000 290,000,000
Common stock, shares issued 183,864,600 183,864,600
Common stock, shares outstanding 183,864,600 183,864,600
v3.10.0.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended
Nov. 30, 2018
Nov. 30, 2017
Income Statement [Abstract]    
Revenues
Expenses:    
Professional fees 12,500 16,564
General and administrative expense 2,261 7,640
Total Operating Expenses 14,761 24,204
Operating Loss (14,761) (24,204)
Other Expense    
Interest expense 2,522 1,745
Net Loss $ (17,283) $ (25,949)
Basic & Diluted Loss per Common Share $ 0.00 $ (0.00)
Weighted Average Common Shares Outstanding 183,864,600 53,864,600
v3.10.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Nov. 30, 2018
Nov. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (17,283) $ (25,949)
Changes In:    
Accounts Payable (1,070) 10,941
Accounts Payable - Related Party 500 8,000
Accrued Interest 1,745 1,745
Accrued Interest - Related Party 777
Net Cash Used in Operating Activities (15,331) (5,263)
CASH FLOWS FROM FINANCING    
Proceeds from Note Payable - Related Party 15,356 5,218
Net Cash Provided by Financing Activities 15,356 5,218
Net (Decrease) Increase in Cash 25 (45)
Cash at Beginning of Period 4,652 4,832
Cash at End of Period 4,677 4,787
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash paid during the year for: Interest
Cash paid during the year for: Franchise Taxes
v3.10.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
12 Months Ended
Aug. 31, 2018
shares
Statement of Cash Flows [Abstract]  
Common stock were issued in exchange for a debt conversion to related party, shares 130,000,000
v3.10.0.1
Organization and Description of Business
3 Months Ended
Nov. 30, 2018
Accounting Policies [Abstract]  
Organization and Description of Business

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.

 

On or about June 27, 2018 we changed domiciles from the State of Nevada to the State of Delaware and thereafter reorganized under the Delaware Holding Company Statute Delaware General Corporation Law Section 251(g). On or about July 12, 2018, two subsidiaries were formed for the purpose of effecting the reorganization. We incorporated MCTC Holdings, Inc. and MCTC Holdings Inc. incorporated MicroChannel Corp.. We then effected a merger involving the three constituents and under the terms of the merger we were merged into MicroChannel Corp., with MicroChannel Corp. surviving and our separate corporate existence ceasing. Following the merger MCTC Holdings, Inc. became the surviving publicly traded issuer and all of our assets and liabilities were merged into MCTC Holdings, Inc.’s wholly owned subsidiary MicroChannel Corp.. Our shareholders became the shareholders of MCTC Holdings, Inc. on a one for one basis. 

 

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.

v3.10.0.1
Going Concern Uncertainties
3 Months Ended
Nov. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern Uncertainties

Note 2. Going Concern Uncertainties

 

The Company has not generated any revenues, has an accumulated deficit of $755,287 as of November 30, 2018, 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.

v3.10.0.1
Summary of Significant Accounting Policies
3 Months Ended
Nov. 30, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 3.  Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying interim financial statements have been prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended August 31, 2018. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

 

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.

 

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 the previous years ended August 31, 2018 and 2017, the Company has not recorded any unrecognized tax benefits.

 

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.

v3.10.0.1
Net Loss Per Share
3 Months Ended
Nov. 30, 2018
Earnings Per Share [Abstract]  
Net Loss Per Share

Note 4. Net Loss Per Share

 

During the nine months ended November 30, 2018 and November 30, 2017, 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.

v3.10.0.1
Note Payable to Shareholder
3 Months Ended
Nov. 30, 2018
Debt Disclosure [Abstract]  
Note Payable to Shareholder

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%, which then increased to 10% after it was in default. 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 three months ended November 30, 2018, the Company recorded an interest expense of $1,745 related to the note payable. As of November 30, 2018, the original principal balance of $70,000 on the note payable remained outstanding, with accrued interest of $30,051. The note payable was not repaid on January 9, 2016 and is thus in default as of the date of this filing.

v3.10.0.1
Related Party
3 Months Ended
Nov. 30, 2018
Related Party Transactions [Abstract]  
Related Party

Note 6. Related Party

 

In October 2017 – November 30, 2018, the Company incurred a related party debt in the amount of $15,000 to an entity related to the legal custodian of the Company for professional fees . As of November 30, 2018, a balance of $6,700 remained outstanding.

 

In November 30, 2017 – November 30, 2018, the Company issued a $34,954 in multiple notes payable to an entity related to the legal custodian of the Company for funds loaned. The notes payable bear interest at an annual rate of 10% and are convertible to common shares of the Company at $0.0001 per share. On May 8, 2018, $13,000 of the principal balance on notes payable was converted to common stock. As of November 30, 2018, $21,954 of the principal balance remained outstanding on the notes payable and $1,404 in accrued interest.

 

In August 2018 – November 2018, the Company issued $15,956 in multiple notes payable to a legal custodian of the Company for funds loaned. The notes bear interest at an annual rate of 10% and are payable upon demand. As of November 30, 2018, $15,956 of the principal balance remained outstanding on the notes payable and $230 in accrued interest.

v3.10.0.1
Income Taxes
3 Months Ended
Nov. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

Note 7. 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 November 30, 2018 and August 31, 2018 are as follows: 

   November 30,
2018
  August 31,
2018
Deferred tax assets:          
Net operating loss carryforwards  $135,500   $131,871 
Capitalized research and development   -------    —   
Research and development credit carry forward   1,963    1,963 
Total deferred tax assets   137,643    133,834 
           
Less: valuation allowance   (137,643)   (133,834)
           
Net deferred tax asset  $—     $—   

 

The net decrease in the valuation allowance for deferred tax assets was $3,629 for the three months ended November 30, 2018. 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 November 30, 2018 available to offset future federal taxable income, if any, of $618,127, which will fully expire by the fiscal year ended August 31, 2035.  Accordingly, there is no current tax expense for the three ended November 30, 2018 and November 30, 2017. In addition, the Company has research and development tax credit carry forwards of $1,963 at November 30, 2018, 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 three ended November 30, 2018 and November 30, 2017.

  

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 21% and 34%, respectively for the three months ended November 30, 2018 and 2017:

 

   November 30,
   2018  2017
Income tax benefit at statutory rate  $3,629    8,823 
Change in valuation allowance   (3,629)   (8,823)
   $—        

 

The fiscal years 2012 through 2018 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

v3.10.0.1
Subsequent Events
3 Months Ended
Nov. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

Note 8. Subsequent Events

 

None.

v3.10.0.1
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Nov. 30, 2018
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying interim financial statements have been prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended August 31, 2018. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Estimates

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

 

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.

Fair Value of Financial Instruments

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

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 the previous years ended August 31, 2018 and 2017, the Company has not recorded any unrecognized tax benefits.

Segment Reporting

Segment Reporting

 

The Company’s business currently operates in one segment.

Net Loss per Share

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

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.

v3.10.0.1
Income Taxes (Tables)
3 Months Ended
Nov. 30, 2018
Income Tax Disclosure [Abstract]  
Deferred income taxes
   November 30,
2018
  August 31,
2018
Deferred tax assets:          
Net operating loss carryforwards  $135,500   $131,871 
Capitalized research and development   -------    —   
Research and development credit carry forward   1,963    1,963 
Total deferred tax assets   137,643    133,834 
           
Less: valuation allowance   (137,643)   (133,834)
           
Net deferred tax asset  $—     $—   
Income Tax Benefit

 

   November 30,
   2018  2017
Income tax benefit at statutory rate  $3,629    8,823 
Change in valuation allowance   (3,629)   (8,823)
   $—       

v3.10.0.1
Going Concern Uncertainties (Details Narrative) - USD ($)
Nov. 30, 2018
Aug. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accumulated Deficit $ (755,287) $ (738,004)
v3.10.0.1
Note Payable to Shareholder (Details Narrative) - USD ($)
3 Months Ended
Nov. 30, 2018
Nov. 30, 2017
Aug. 31, 2018
Debt Disclosure [Abstract]      
Note Payable $ 70,000   $ 70,000
Interest Rate 7.00%    
Default annual rate 10.00%    
Interest Expense $ 2,522 $ 1,745  
Accrued interest $ 30,051    
v3.10.0.1
Related Party (Details Narrative) - USD ($)
3 Months Ended
Nov. 30, 2018
Nov. 30, 2017
Aug. 31, 2018
Related Party Transaction [Line Items]      
Professional fees incurred, related party $ 15,000    
Proceeds from Note Payable - Related Party 15,356 $ 5,218  
Note Payable - Related Party 37,910   $ 22,554
Accrued Interest - Related Party 1,634   $ 857
Legal Custodian [Member]      
Related Party Transaction [Line Items]      
Proceeds from Note Payable - Related Party 34,954    
Note Payable - Related Party $ 21,954    
Interest rate 10.00%    
Convertible to common shares $ 0.0001    
Common stock were issued in exchange for a debt conversion to related party, amount $ 13,000    
Accrued Interest - Related Party 1,404    
Legal Custodian [Member]      
Related Party Transaction [Line Items]      
Proceeds from Note Payable - Related Party 15,956    
Note Payable - Related Party $ 15,956    
Interest rate 10.00%    
Accrued Interest - Related Party $ 230    
v3.10.0.1
Income Taxes - Deferred income taxes (Details) - USD ($)
Nov. 30, 2018
Aug. 31, 2018
Deferred tax assets:    
Net operating loss carryforward $ 135,500 $ 131,871
Capitalized research and development
Research and development credit carry forward 1,963 1,963
Total deferred tax assets 137,643 133,834
Less: valuation allowance (137,643) (133,834)
Net deferred tax asset
v3.10.0.1
Income Taxes - Income Tax Benefit (Details) - USD ($)
3 Months Ended
Nov. 30, 2018
Nov. 30, 2017
Income Tax Disclosure [Abstract]    
Income tax benefit at statutory rate $ 3,629 $ 8,823
Change in valuation allowance (3,629) (8,823)
Income tax benefit
v3.10.0.1
Income Taxes (Details Narrative)
3 Months Ended
Nov. 30, 2018
USD ($)
Net operating loss carry forward $ 618,127
Tax credit carry forward $ 1,963
Expiration date Aug. 31, 2038
Deferred Tax Asset [Member]  
Deferred tax asset valuation allowance $ 3,629