Annual Report (10-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended June 30, 2016

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

	For the transition period from _________ to ________

	Commission file number: 000-55155

Nano Mobile Healthcare, Inc.

(Exact name of registrant as specified in its charter)

Delaware	93-0659770
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3 Columbus Circle, 15th Floor New York, NY	10019
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number: (917) 745-7202

Securities registered under Section 12(b) of the Exchange Act
Title of each class	Name of each exchange on which registered
None	not applicable

Securities registered under Section 12(g) of the Exchange Act:
Title of each class
Common Stock, par value of $0.001

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 Section 15(d) of the Act. Yes [ ] No [X]

Indicate by checkmark 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

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chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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 [ ] Smaller reporting company [X]

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

Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $4,443,071

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 787,698,074 shares of common stock as of May 4, 2017

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TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	6
Item 2.	Properties	13
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 8.	Financial Statements and Supplementary Data	18
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	19
Item 9B.	Other Information	20
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	20
Item 11.	Executive Compensation	22
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	26
Item 14.	Principal Accountant Fees and Services	26

PART IV

Item 15.

Exhibits, Financial Statement Schedules

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PART I

Item 1. Business

Company Overview

Imagine a world where one company makes a difference, saving lives, through the earliest detection of deadly diseases and improving traffic safety.

Our vision is t o save lives, create efficiency and reduce costs through innovative, mobile screening technologies. Our mission is to commercialize lifesaving, mobile breath sensor technologies that enable professionals to more efficiently screen for the earliest signs of disease or the presence of drugs, enabling improved health outcomes, traffic safety and significant cost reduction.

We are developing detection devices based on patented technology invented by the National Aeronautics and Space Administration (“NASA”) that was licensed to Nanobeak, and further sublicensed to us.

On January 9, 2015 we redomiciled our company from Nevada to Delaware and changed our name to Nano Mobile Healthcare, Inc.

The Nano Mobile Sensor

We are developing a platform technology to analyze the Volatile Organic Compound signatures in a person’s breath using a handheld device that provides immediate results. We have identified two initial target markets for the low-cost point of care screening device. The first is early detection of lung cancer and the second is the presence of marijuana on a driver’s breath. Secondary device testing indications may include various forms of cancer, chronic diseases such as heart failure as well as or contagious diseases such as strep throat. The principles of operation are driven by technology developed by NASA. The sensor can connect via Bluetooth to any capable smart device running an iOS or Android operating system. The current device has a small footprint and can easily be operated by anyone with minimal instruction.

State-of-the art engineering design techniques, advanced nanotechnology, and bio-informatics have been combined to create the following three main pieces of the device that is now being used to collect sample data from test patients for certain key biomarkers in a clinical setting:

Breath Capture Device – This component of the device attaches to the sensor module, captures breath from patient’s mouth, pre-filters the breath, and sends it to the sensor module at a controlled flow rate.

Sensor Module – This component of the device contains an array filled with dozens of micro-fabricated nanomaterial-based chemical sensors, device hardware, and a battery pack.

App/Software for the Smart Devices – This essential component of the device communicates with smart devices using a proprietary iOS/Android app, is used to interpret and present the results collected by the Sensor Module, and can easily be updated as the medical team collects more sample calibration data. It can also be calibrated to detect other diseases when sample data for those are collected. Each time a test is run on the breath capture device, data received by the app will be seamlessly pre-processed and post-processed through the algorithm and in nearly real-time a conclusive summary result will be provided on the device and/or sent/shared with Physicians via phone or Internet connections.

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The sensor and related devices will ultimately be used to demonstrate an integrated approach that can be used to collect data from human breath and evaluate it for early disease screening purposes, effectively linking experts in the field, data scientists, and decision makers with results generated in real-time.

Strategic Partnerships

We have entered into a strategic partnership with Theranostics Laboratory, a translational research company, with offices in the USA and New Zealand. Theranostics Laboratory was founded at the Cleveland Clinic in 2010 and works on subcontracted research, in collaboration with the Auckland Bioengineering Institute (ABI), in New Zealand, and with NASA (via NASA Grant NCC 9-58).

The Auckland Bioengineering Institute is recognized as a world-leader in the field of personalized modeling and is part of the international Virtual Physiologic Human (VPH) project. The Institute has successfully commercialized numerous mHealth technologies, including wireless telemetry systems, wearable sensors and a needle-free injectable system into the US market.

The partnership between the Theranostics Laboratory and the Auckland Bioengineering Institute (ABI) is a strategic alliance for us through which the lab will act as principal investigators for us in the areas of mobile strep detection, mobile virus detection and other related areas including breath sample conditioning methodologies. The partnership gives us access to world-class expertise and skill in the field of personalized modeling..

We are working in conjunction with Nanobeak, LLC, a strategic partner, as well as NASA, to develop a mobile app to be used in connection with our sensor that will enable law enforcement to screen for marijuana use and deliver in-the-moment results to the officer’s smartphone, tablet or laptop in the field. Given the increase of marijuana legalization and decriminalization efforts by a growing number of states, we have made the development of a law enforcement sensor the short-term priority. There is a growing need on the part of law enforcement across the country for a portable sensor to detect marijuana abuse and impaired driving. We also plan to incorporate alcohol detection along with the marijuana sensing capability in one device so that law enforcement can have the capability to detect both alcohol (DUI breathalyzer) and marijuana abuse in a single device. The law enforcement device offers a quicker path to market based on reduced testing and regulatory requirements as compared to a medical diagnostic device.

Regulatory Approval

Our products as well as our research and development activities are regulated by numerous governmental authorities, principally the U.S Food and Drug Administration (FDA), as well as state and foreign regulatory agencies.

In the US, we believe that the medical diagnostic devices will be classified by the FDA as Class II medical devices and require clearance through a Form 510K. There can be no assurance that the FDA will provide marketing clearance for the device.

Manufacturing, Distribution, Sales

We intend to outsource manufacturing, distribution and sales but we have not entered into any definitive agreements for these functions.

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Competition

We intend to compete with other detection devices by offering products that have enhanced value, ease of use, simple functionality, compatibility with various platforms, reliability, attractive price and are high in quality. The Company also believes its intellectual property provides an advantage over current competitors.

Disease Screening

There are a variety of methods to screen for the presence of disease. We are focused on non-invasive, point of care diagnostics.

Following years of research, a number of companies are now in prototype phase with devices that can test the chemical compounds in a person’s breath and identify the early stages of disease. Entry to this market is expected to continue and sharply rise as more prototypes emerge and begin to gain market entry with commercialized products. While companies in development tend to be small and privately owned, there has been entry by larger publicly owned companies that have greater financial reserves, distribution channels and more experience in commercialization. Acquisitions and collaborations by and companies seeking a competitive advantage also affect the competitive environment. This is a global market, evidenced by the emergence of companies bringing competitive solutions from different parts of the world.

New competitors may emerge and may develop products and capabilities which compete directly with our products. No assurance can be given that we will be successful in competing in the industries identified or in other industries that would benefit from our technology.

Customers for our medical diagnostic products is expected to include health care providers such as medical doctors, nurse practitioners and physician assistants.

Narcotics Screening

There are currently a variety of breathalyzer smartphone apps which essentially focus on alcohol detection. We are developing devices to distinguish between alcohol and narcotics and screen for a variety of narcotics both legal and illicit.

Making up the narcotic detection space are both domestic and international organizations that range from small, privately held companies to larger companies that include an array of diagnostic narcotics solutions. Although this market is more developed than disease detection, the space is dominated by a few key players making the possibility for new entrants feasible. Because toxicology screens are the most common type of narcotics testing products on the market, we believe that advanced technology that both detects and monitors discrete drug levels in an individual’s system through exhalation will cause this market to expand. The consumer market for mobile applications which provide detection and ongoing monitoring capabilities is anticipated to be significant.

Customers for our product will include the different areas of law enforcement as well as the different areas of professional and amateur sports. Corporations are also a target area for the narcotics screening technology.

Employees

We outsource all of our non-executive functions to Nanobeak, LLC. As of the date of this filing Nanobeak has 18 employees and consultants, both full and part time, most of which are shared with NASA and other contractors. The employees are not presently covered by any collective bargaining agreement.

Item 1A. Risk Factors

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Risks Related to Our Financial Condition and our Business

Because we have a limited operating history, you may not be able to accurately evaluate our operations.

We have had limited operations to date and have generated no revenue. Therefore, we have a limited operating history upon which to evaluate the merits of investing in our company. Because we are in the early stages of operating our business, we are subject to many of the same risks inherent in the operation of a business with a limited operating history, including the potential inability to continue as a going concern.

Our investors may lose their entire investment because our financial status creates a doubt whether we will continue as a going concern.

Our auditors, in their opinion dated May 5, 2017, have stated that currently we do not have sufficient cash nor do we have a significant source of revenues to cover our operational costs and allow us to continue as a going concern. We seek to raise operating capital to implement our business plan in an offering of our common stock. Our company's plan specifies a minimum amount of $2,000,000 in additional operating capital to operate for the next twelve months. However, there can be no assurance that such offering will be successful. You may lose your entire investment

We are dependent on outside financing for continuation of our operations.

Because we have generated no revenue and currently operate at a significant loss, we are completely dependent on the continued availability of financing in order to continue our business. There can be no assurance that financing sufficient to enable us to continue our operations will be available to us in the future. Moreover, even if we are able to obtain financing, it could be on terms that causes our company’s stock price to suffer or further dilutes shareholder interests in our company. Most of our financing in 2016 was from the issuance of convertible promissory notes and related parties advances. The convertible promissory notes contain extremely egregious penalties in the event of default, discounted conversion features and other terms that are not beneficial to a smaller company like ours. Our failure to obtain future financing, financing on terms that are acceptable to us, or to produce levels of revenue to meet our financial needs could result in our inability to continue as a going concern and, as a result, investors in the Company could lose their entire investment.

We may be considered in default of the JDF Capital, Inc. settlement agreement.

On March 10, 2017, we entered into a settlement agreement with JDF Capital, Inc. and agreed to pay a total of $300,000, with $50,000 monthly installments at the time of execution through August 1, 2017. We made the initial $50,000 payment upon execution of the agreement, however, we have not made any subsequent monthly installment payments and may be considered in default of the agreement, which would trigger the default provisions under the agreement. These provisions include a confession of judgment in the amount of $693,952.88 and the right to reclaim the outstanding warrants held by JDF. While we are working with JDF on an alternative installment program, there can be no assurance that we are not declared in default of the settlement agreement and subject to the default provisions of the settlement agreement.

We rely on license rights to protect our technology, which could be subject to change and cause our business to fail.

We rely on our sublicense agreement and the license agreement with NASA to protect our proprietary technologies.

If we were to lose our sublicense rights or if Nanobeak loses its license rights with NASA, we would lose our technology and our current business plan will fail.

If a dispute arises concerning our technology, we could become involved in litigation that might involve substantial cost. Litigation could divert substantial management attention away from our operations and into efforts to enforce our license. If a proceeding resulted in adverse findings, we could be subject to significant liabilities to third parties. We might also be required to seek licenses from third parties to manufacture or sell our products. Our ability to manufacture and sell our products may also be adversely affected by other unforeseen factors relating to the proceeding or its outcome.

We may depend on partnership arrangements or strategic alliances for the commercialization of our products in development, which places risk on forces outside of our control.

The commercialization of our products will require resources and expertise that we currently do not have. Therefore, we will need to seek partners, and/or enter into strategic alliances, licenses or other arrangements with leading pharmaceutical and biotechnology companies to successfully commercialize these products. Developing relationships with these parties may take a long time to finalize, and the current economic environment may extend that period even further.

Such arrangements will subject us to a number of risks, including the following:

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we may not be able to control several factors in the commercialization of some of our products, including the amount, timing and quality of resources that our partners may devote to these products;

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our partners may experience financial, regulatory or operational difficulties, which may impair their ability to commercialize our products;

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as a requirement of any partnership arrangement, we may be required to relinquish important rights with respect to these products, such as marketing and distribution rights;

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legal disputes or disagreements, including the ownership of intellectual property, may occur with one or more of our partners and may lead to lengthy and expensive litigation or arbitration;

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significant changes in a partner’s business strategy may adversely affect a partner’s willingness or ability to satisfactorily complete its commercialization or other obligations under any such arrangement; and,

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a partner could terminate the partnership arrangement, which could negatively impact the continued commercialization of these drug products.

Because some of our products are subject to extensive government regulation, we must comply with these regulations or our business could suffer.

Our disease screening products are subject to extensive government regulation in the U.S. As stated above, we plan to work with a strategic partner to help guide us through the regulatory process needed for our products. If we cannot comply with these regulations, we may be unable to distribute our products, which could cause our business to suffer or fail. In the U.S., the development, manufacture, marketing and promotion of medical devices are regulated by the Food and Drug Administration (“FDA”) under the Federal Food, Drug, and Cosmetic Act (“FFDCA”). The FFDCA provides that new pre-market notifications under Section 510(k) of the FFDCA are required to be filed when, among other things, there is a major change or modification in the intended use of a device or a change or modification to a legally marketed device that could significantly affect its safety or effectiveness. A device manufacturer is expected to make the initial determination as to whether the change to its device or its intended use is of a kind that would necessitate the filing of a new 510(k) notification. The FDA may not concur with our determination that our current and future products can be qualified by means of a 510(k) submission or that a new 510(k) notification is not required for such products.

Future changes to manufacturing procedures could require that we file a new 510(k) notification. Also, future products, product enhancements or changes, or changes in product use may require clearance under Section 510(k), or they may require FDA pre-market approval (“PMA”) or other regulatory clearances. PMAs and regulatory clearances other than 510(k) clearance generally involve more extensive prefiling testing than a 510(k) clearance and a longer FDA review process.

FDA regulatory processes are time-consuming and expensive. Product applications submitted by us may not be cleared or approved by the FDA. In addition, we must manufacture our products in compliance with Good Manufacturing Practices, as specified in regulations under the FFDCA. The FDA has broad discretion in enforcing the FFDCA, and noncompliance with the FFDCA could result in a variety of regulatory actions ranging from product detentions, device alerts or field corrections, to mandatory recalls, seizures, injunctive actions and civil or criminal penalties. If we have to recall of our product in the field, it could negatively affect our results of operations, financial position and cash flows.

If our products do not gain market acceptance, we will not achieve revenues and we may go out of business.

Even if we and/or our partners obtain the necessary regulatory approval to market products, such products, technologies and product candidates may not gain market acceptance among physicians, patients, healthcare payers and medical communities. The degree of market acceptance of any product, technology or product candidate will depend on a number of factors, including:

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the scope of regulatory approvals, including limitations or warnings in a product’s regulatory-approved labeling;

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demonstration of the clinical safety and efficacy of the product or technology;

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the absence of evidence of undesirable side effects of the product or technology that delay or extend trials;

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the lack of regulatory delays or other regulatory actions;

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its cost-effectiveness;

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its potential advantage over alternative screening detection methods;

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the availability of third-party reimbursement; and

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the marketing and distribution support it receives.

If any of our products fail to achieve market acceptance, our ability to generate revenue will be limited, which would have a material adverse effect on our business. In addition, even if we gain regulatory approval and market acceptance, further delays due to, for example, the FDA not removing unapproved products from the market in a timely manner, may affect our ability to generate revenue quickly after market acceptance.

Our business will not grow unless the market for disease screening and narcotics detection products expands both domestically and internationally.

Our revenues are expected to be derived from the sale of our disease and narcotics screening products. We cannot accurately predict the future growth rate, if any, or the ultimate size of the market we do business in. The expansion of the market for our products depends on a number of factors including without limitation:

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national or international events which may affect the need for or interest in our products;

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the cost, performance and reliability of our products and those of our competitors;

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customers’ perception of the perceived benefit by screening products and their satisfaction with the performance and reliability our products;

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public perceptions regarding the confidentiality of private information;

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proposed or enacted legislation related to screening products; and

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marketing efforts and publicity regarding these products

If we are unable to compete in the screening market, our business will fail.

A significant number of established and startup companies are marketing or developing screening products and that compete with our current offerings.

The medical equipment market and drug detection market is highly competitive and competition is likely to intensify. If we cannot compete, our business will fail. We believe that additional significant long-term competitors will continue to enter the market. Companies competing with us may introduce products that are targeted at our target markets and competitively priced, have increased performance or functionality or incorporate technological advances we have not yet developed or implemented. Some present and potential competitors have financial, marketing, research, and manufacturing resources substantially greater than ours. This competitive disadvantage we face could mean less market share for our company.

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We intend to compete by offering products that have enhanced value, ease of use, simple functionality, compatibility with various platforms, reliability, attractive price and are high in quality. We also believes our intellectual property provides an advantage over current competitors. However we cannot be sure that there is not intellectual property that is more advanced. Although we believe that our products will be well received because of its innovative features, performance characteristics and cost-effective pricing, there can be no assurance that comparable or superior products incorporating more advanced technology or other features or having better price or performance characteristics will not be introduced by competitors.

Because we do not have exclusive agreements with the third party manufacturers that will manufacture our products, we may be unable to effectively manufacture and distribute our products or distribute them at all, which would adversely affect our reputation and materially reduce our revenues.

We do not own or operate any manufacturing facilities. However, there are a number of manufacturers that are capable of manufacturing the types of products we have sold and yet plan to sell. We have no written agreement with any manufacturer to manufacture our products.

We plan to use other manufacturers for our screening products. Moreover, our disease screening products require compliance with Good Manufacturing Practices. As such, we plan to pursue and establish relationships with third party manufacturers to manufacture our products and ship them directly to our customers and later to our own warehouse if we decide that is a feasible option. If we lose the services of our third party manufacturers, we may be unable to secure the services of replacement manufacturers in a manner that would not harm or disrupt our business. In addition, because we do not have written agreements with all of these manufacturers, they could refuse to supply some or all of our products, reduce the number of products that they supply or change the terms and prices under which they normally supply our products. The occurrence of any such conditions will have a materially negative effect upon our reputation and our ability to distribute our products, which will cause a material reduction in our revenues.

If the healthcare industry limits coverage or reimbursement levels, the acceptance of our products could suffer.

The healthcare industry is subject to changing political, economic and regulatory influences that may affect the procurement practices and operations of healthcare facilities. During the past several years, the healthcare industry has been subject to increased government regulation of reimbursement rates and capital expenditures. Among other things, third party payers are increasingly attempting to contain or reduce healthcare costs by limiting both coverage and levels of reimbursement for healthcare products and procedures. Because the price of our screening products may exceed the price of alternative available products, cost control policies of third party payers, including government agencies, may adversely affect acceptance and use of our products. In addition, on March 23, 2010 the Patient Protection and Affordable Care Act was signed into law and, beginning in 2013, the legislation imposes a 2.3% excise tax on sales of medical devices, which may negatively affect our business.

We will rely in part upon sales reps, retailers and distribution partners to distribute our products, and we may be adversely affected if those parties do not actively promote our products or pursue customers who would have a potential demand for our products.

We estimate that a significant portion of our revenue will come from sales to partners including reps, retailers, distributors and resellers. None of these relationships have not been formalized in a detailed contract. Even where these relationships are formalized in a detailed contract, the agreements are often terminable with little or no notice and subject to periodic amendment. We cannot control the amount and timing of resources that our partners devote to activities on our behalf.

We intend to continue to seek strategic relationships to distribute, license and sell certain of our products. We, however, may not be able to negotiate acceptable relationships in the future and cannot predict whether current or future relationships will be successful.

If our products cause harm, we could be subject to substantial product liability, which could cause our business to suffer.

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Producers of medical devices may face substantial liability for damages if a product fails or is alleged to have caused harm. We intend to carry product liability insurance, but do not currently have any coverage. Coverage we may secure in the future may not be adequate to cover potential claims. Our business could be adversely affected by product liability claims or by the cost of insuring against those claims.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and new SEC regulations, are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed.

If we fail to adequately manage the size of our business, it could have a severe negative effect on our financial results or stock price.

Our management believes that in order to be successful we must appropriately manage the size of our business. This may mean reducing costs and overhead in certain economic periods, and selectively growing in periods of economic expansion. In addition, we will be required to implement operational, financial and management information procedures and controls that are efficient and appropriate for the size and scope of our operations. The management skills and systems currently in place may not be adequate and we may not be able to manage any significant cost reductions or effectively provide for our growth.

If we fail to attract and retain qualified senior executive and key technical personnel, our business will not be able to expand.

We are dependent on the continued availability of the services of our employees, many of whom are individually key to our future success, and the availability of new employees to implement our business plans. We rely heavily on the experience of our officers and directors move our products into distribution for sales. As we move forward we will need to engage professionals with various specific experience. We will need engineers with specific knowledge in designing and developing screening products and there are limited resources available that have this specific experience. We will also need to hire professionals who understand the process of selling product through CMS (Centers for Medicare and Medicaid Services) as well as people familiar with working with medical devices as it relates to reimbursement by private insurance companies. We will also need to identify sales and marketing professionals with specific experience in selling into certain channels of distribution such as mass merchant retail, hospitals, doctors and healthcare facilities.

The market for skilled employees is highly competitive, especially for employees in technical fields. There can be no assurance that we will be able to retain the services of all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.

Our personnel may voluntarily terminate their relationship with us at any time, and competition for qualified personnel, especially engineers, is intense. The process of locating additional personnel with the combination of skills and attributes required to carry out our strategy could be lengthy, costly and disruptive.

If we lose the services of key personnel, or fail to replace the services of key personnel who depart, we could experience a severe negative effect on our financial results and stock price. In addition, there is intense competition for highly qualified engineering and marketing personnel in the locations where we principally operate. The failure to acquire the services of any key engineering, marketing or other personnel or our failure to attract, integrate, motivate and retain additional key employees could have a material adverse effect on our business, operating and financial results and stock price.

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If we fail to comply with the new rules under the Sarbanes-Oxley Act related to accounting controls and procedures, or if material weaknesses or other deficiencies are discovered in our internal accounting procedures, our stock price could decline significantly.

Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent auditors addressing these assessments. We are in the process of documenting and testing our internal control procedures, and we may identify material weaknesses in our internal control over financial reporting and other deficiencies. If material weaknesses and deficiencies are detected, it could cause investors to lose confidence in our Company and result in a decline in our stock price and consequently affect our financial condition. In addition, if we fail to achieve and maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our Common Stock could drop significantly. In addition, we cannot be certain that additional material weaknesses or significant deficiencies in our internal controls will not be discovered in the future.

Risks Related to Our Securities

If a market for our common stock does not develop, shareholders may be unable to sell their shares.

Our common stock is quoted under the symbol “VNTH” on the OTCQB operated by OTC Markets Group, Inc, an electronic inter-dealer quotation medium for equity securities. We do not currently have an active trading market. There can be no assurance that an active and liquid trading market will develop or, if developed, that it will be sustained.

Our securities are very thinly traded. Accordingly, it may be difficult to sell shares of our common stock without significantly depressing the value of the stock. Unless we are successful in developing continued investor interest in our stock, sales of our stock could continue to result in major fluctuations in the price of the stock.

Our common stock price may be volatile and could fluctuate widely in price, which could result in substantial losses for investors.

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including:

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technological innovations or new products and services by us or our competitors;

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government regulation of our products and services;

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the establishment of partnerships with other technology companies;

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intellectual property disputes;

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additions or departures of key personnel;

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sales of our common stock;

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our ability to integrate operations, technology, products and services;

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our ability to execute our business plan;

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operating results below expectations;

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loss of any strategic relationship;

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industry developments;

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economic and other external factors; and

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period-to-period fluctuations in our financial results.

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Because we have no revenue to date, you should consider any one of these factors to be material. Our stock price may fluctuate widely as a result of any of the above.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

We have not paid cash dividends in the past and do not expect to pay cash dividends in the future on our common stock. Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of cash dividends on our common stock will depend on earnings, financial condition and other business and economic factors at such time as the board of directors may consider relevant. If we do not pay cash dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

As a new investor, you will experience substantial dilution as a result of future equity issuances.

In the event we are required to raise additional capital it may do so by selling additional shares of common stock thereby dilution the shares and ownership interests of existing shareholders.

Because we are subject to the “Penny Stock” rules, the level of trading activity in our stock may be reduced.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any listed, trading equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty Purchasers may experience in attempting to liquidate such securities.

Provisions in the Delaware law and our Bylaws could make it very difficult for an investor to bring any legal actions against our directors or officers for violations of their fiduciary duties or could require us to pay any amounts incurred by our directors or officers in any such actions.

Members of our board of directors and our officers will have no liability for breaches of their fiduciary duty of care as a director or officer, except in limited circumstances, pursuant to provisions in the Delaware law and our Bylaws. Accordingly, you may be unable to prevail in a legal action against our directors or officers even if they have breached their fiduciary duty of care. In addition, our Bylaws allow us to indemnify our directors and officers from and against any and all costs, charges and expenses resulting from their acting in such capacities with us. This means that if you were able to enforce an action against our directors or officers, in all likelihood, we would be required to pay any expenses they incurred in defending the lawsuit and any judgment or settlement they otherwise would be required to pay. Accordingly, our indemnification obligations could divert needed financial resources and may adversely affect our business, financial condition, results of operations and cash flows, and adversely affect prevailing market prices for our common stock.

Item 2. Properties

We neither own nor lease any real or personal property. We maintain our offices at 3 Columbus Circle, 15th Floor New York, NY 10019 and Nanobeak leases the space.

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Item 3. Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

Item 4. Mine Safety Disclosures

N/A

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is quoted under the symbol “VNTH” on the OTCQB operated by OTC Markets Group, Inc. Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell his securities in our company.

The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Fiscal Year Ending June 30, 2016
Quarter Ended		High $		Low $
	June 30, 2016		.049		.001
	March 31, 2016		.1265		.002
	December 31, 2015		.032		.005
	September 30, 2015		.40		.0135

Fiscal Year Ending June 30, 2015
Quarter Ended		High $		Low $
	June 30, 2015		.05		.019
	March 31, 2015		.052		.0284
	December 31, 2014		.155		.0345
	September 30, 2014		.2501		.055

On May 1, 2017, the sales price per share of our common stock on the OTCQB was $0.0006.

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to

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the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Holders of Our Common Stock

As of May 4, 2017, we had 787,698,074 shares of our common stock issued and outstanding, held by 70 shareholders of record, with others holding shares in street name.

Dividends

Securities Authorized for Issuance under Equity Compensation Plans

We do not have any equity compensation plans.

Unregistered Sales of Equity Securities

During the year ended June 30, 2016, we issued 215,820,752 shares of common stock with a fair value of $380,966 for the conversion of notes payable and accrued interest.

During the year ended June 30, 2016, we issued 400,000 shares of common stock for services with a fair value of $9,600.

On October 6, 2016, we entered into an exchange agreement with John E. Groman Group (“Groman”) pursuant to which we agreed with Groman to exchange his 811,938,579 shares of our common stock into 16,238,772 shares of Series B Convertible Preferred Stock.

Subsequent to year end June 30, 2016, we issued 530,366,966 shares of common stock in settlement of notes payable.

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

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Item 6. Selected Financial Data

A smaller reporting company is not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Results of Operations for the years ended June 30, 2016 and 2015

Revenues

We have not generated revenues since our inception. We do not expect to earn any revenues until we complete our technology and bring it to market.

Operating Expenses

Operating expenses decreased to $1,686,466 for the year ended June 30, 2016 from $2,458,154 for the year ended June 30, 2015. Our operating expenses for the year ended June 30, 2016 consisted mainly of consulting expenses of $704,113, general and administrative expenses of approximately $346,000, professional fees in the amount of $515,672, which includes $378,919 in NASA related expenses, travel expenses of $123,779 and officer and director compensation of $120,189. In comparison, our operating expenses for the year ended June 30, 2015 consisted mainly of consulting expenses of $997,357, general and administrative expenses of $443,982, professional fees in the amount of $475,855, warrant compensation to our officers and directors of $321,669, royalty expenses of $133,684 and officer and director compensation of $85,607.

For 2017, we anticipate our operating expenses will increase over 2016 as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with developing and commercializing our technology and our continued reporting obligations with the Securities and Exchange Commission.

Other Income/Expenses

Other expenses was $2,911,825 for the year ended June 30, 2016, as compared with other income of $4,090,344 for the year ended June 30, 2015. Other expenses in 2016 were mainly attributable to interest expenses of $2,473,300 and derivative loss of $442,496. Other income in 2015 was mainly attributable to a gain in the change in fair value due to derivative warrant liability of $4,775,161, offset mainly by interest expense of $665,217.

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We expect that our other expenses will increase in 2017 as a result of increased interest expenses from our outstanding debt securities.

Net Loss

We incurred a net loss of $4,598,291 for the year ended June 30, 2016, compared to net income of $1,632,190 for the year ended June 30, 2015.

Liquidity and Capital Resources

As of June 30, 2016, we had total current assets of $969, consisting of prepaid expenses. We had current liabilities of $6,154,769 as of June 30, 2016. Accordingly, we had negative working capital of $6,153,800 as of June 30, 2016.

Operating activities used $1,592,653 in cash for year ended June 30, 2016, as compared with $1,807,072 for the year ended June 30, 2015. Our negative operating cash flow for the year ended June 30, 2016 was mainly attributable to our net loss for the period and offset mainly by a derivative gain and the amortization of debt discount.

Investing activities used $0 in cash for the year ended June 30, 2016, as compared with $12,149 cash used in investing activities for the year ended June 30, 2015, associated with the purchase of fixed assets.

Financing activities for the year ended June 30, 2016 provided $1,342,667 in cash, as compared with cash flows provided by financing activities of $1,834,134 for the year ended June 30, 2015. Our positive cash flow for the year ended June 30, 2016 was mainly the result of proceeds from related party debt, convertible notes and loans payable offset by payments on related party debt and loans payable.

To date, we have relied on related party advances and convertible notes for our immediate financing needs. We will need to find a more suitable arrangement to raise the money we need to implement our business plan. If we raise less than what we need, we will have to scale back our operations commensurate with the funding, if any, that we receive. Our efforts are ongoing but we can provide no assurance that we will be able to raise the optimal amount needed to implement our business plan.

We have been strategizing and outlining a plan to meet the requirements for making our company more attractive to the capital markets and to maintain our eligibility requirements on the OTCQB. As part of that process, we have approved a 10 for 1 reverse split of our common stock and an increase in our authorized common stock from 500,000,000 to 1,000,000,000 shares.

As of June 30, 2016, we had $0 in cash. Until we are able to sustain our ongoing operations through sales revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

Going Concern

We have incurred cumulative net losses of $11,572,957 since our inception and require capital for our contemplated operational and marketing activities to take place. Our ability to continue as a going concern is dependent on us generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts. The ability to successfully resolve these factors raise substantial doubt about our ability to continue as a going concern.

Off Balance Sheet Arrangements

As of June 30, 2016, there were no off balance sheet arrangements.

Recent Accounting Pronouncements

We do not expect any recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

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Item 8. Financial Statements and Supplementary Data

Index to Financial Statements Required by Article 8 of Regulation S-X:

Financial Statements:

F-1	Report of Independent Registered Public Accounting Firm
F-2	Balance Sheets as of June 30, 2016 and 2015
F-3	Statements of Operations for the years ended June 30, 2016 and 2015
F-4	Statement of Stockholders’ Deficit for years ended June 30, 2016 to June 30, 2015
F-5	Statements of Cash Flows for the years ended June 30, 2016 and 2015
F-6	Notes to Financial Statements

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Nano Mobile Healthcare, Inc.

New York, NY

We have audited the accompanying balance sheets of Nano Mobile Healthcare, Inc. (the “Company”) as of June 30, 2016 and 2015, and the related statements of operations, stockholders’ deficit and cash flows for each of the years 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 audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company 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 audits provide 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 Nano Mobile Healthcare, Inc. as of June 30, 2016 and 2015 and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred losses from operations and has a working capital deficit. These conditions raise significant doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

May 5, 2017

F- 1

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NANO MOBILE HEALTHCARE, INC.

BALANCE SHEETS

AS OF JUNE 30, 2016 AND 2015

	June 30, 2016			June 30, 2015
ASSETS
Current assets
Cash and cash equivalents	$	—		$	249,986
Prepaid expenses and other current assets		969			41,637
Total current assets		969			291,623
Fixed Assets		8,936			10,670
Securities-available for sale		400			400
Total assets		10,305			302,693
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	572,043		$	366,918
Convertible notes payable		1,463,796			341,585
Due to related parties		1,166,419			400,450
Derivative liabilities		2,952,511			2,494,236
Total current liabilities		6,154,769			3,603,189
Convertible debt		—			160,386
Total liabilities		6,154,769			3,763,575
Stockholders' deficit
Preferred stock; $0.001 par value; 50,000,000 shares authorized; 23,473,368 and 0 shares issued and outstanding as of June 30, 2016 and June 30, 2015, respectively		23,473			—
Common stock; $0.001 par value; 900,000,000 shares authorized; 227,331,108 and 22,772,040 shares issued and outstanding as of June 30, 2016 and June 30, 2015, respectively		227,331			22,772
Additional paid-in capital		5,177,689			3,491,012
Accumulated deficit		(11,572,957	)		(6,974,666	)
Total stockholders' deficit		(6,144,464	)		(3,460,882	)
Total liabilities and stockholders' deficit	$	10,305		$	302,693

See accompanying notes to financial statements

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NANO MOBILE HEALTHCARE, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

	For the years ended
	June 30, 2016			June 30, 2015
Operating expenses
Professional fees		515,672			475,855
General and administrative expenses		346,492			443,982
Officer and director compensation		120,189			407,276
Consulting		704,113			997,357
Royalty expenses		—			133,684
Total operating expenses		1,686,466			2,458,154
Loss from operations		(1,686,466	)		(2,458,154	)
Other income (expense)
Interest income (expense)		(2,473,300	)		(665,217	)
Gain (loss) on derivative		(442,496	)		4,775,161
Gain (loss) on note settlement		3,971			—
Unrealized loss on investment		—			(19,600	)
Total other income (expense)		(2,911,825	)		4,090,344
Net (loss) income	$	(4,598,291	)	$	1,632,190
Net (loss) income per common share: basic	$	(0.10	)	$	0.08
Net (loss) income per common share: diluted	$	(0.10	)	$	0.06
weighted average common shares outstanding:
basic		47,016,765			20,100,561
diluted		47,016,765			27,374,576

See accompanying notes to financial statements

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NANO MOBILE HEALTHCARE, INC.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

	Preferred Stock				Common Stock
	Shares		Amount		Shares			Amount			Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
Balance, June 30, 2014		—		—		18,942,372			18,942			7,918,407			(8,606,856	)		(669,507	)
Stock issued to settle debt		—		—		2,053,289			2,053			337,592			—			339,645
Stock issued to settle related party debt		—		—		461,684			462			461,222			—			461,684
Stock issued for services		—		—		204,043			204			83,973			—			84,177
Shares issued for Nano beak shares		—		—		1,110,651			1,111			(1,111	)		—			—
Warrants issued for services		—		—		—			—			321,669			—			321,669
Conversion of deriviative liability		—		—		—			—			526,870			—			526,870
Reclassifaction of tainted warrants to derivitive liability		—		—		—			—			(6,157,610 )			—			(6,157,610)
Net income		—		—											1,632,190			1,632,190
Balance, June 30, 2015		—		—		22,772,040			22,772			3,491,012			(6,974,666	)		(3,460,882	)
Shares issued for services		—		—		400,000			400			9,200						9,600
Stock issued to settle debt		—		—		215,820,752			215,821			165,145			—			380,966
Settlement of derivative liabilty		—		—		—			—			1,524,143			—			1,524,143
Preferred shares issued for Nano beak shares		23,473,368		23,473		(11,661,684	)		(11,662	)		(11,811	)		—			—
Net loss		—		—		—			—			—			(4,598,291)			(4,598,291)
Balance, June 30, 2016		23,473,368		23,473		227,331,108			227,331			5,177,689			(11,572,957	)		(6,144,464	)

See accompanying notes to financial statements

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NANO MOBILE HEALTHCARE, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2016 AND 2015

	For the years ended
	June 30, 2016			June 30, 2015
Cash Flows from Operating Activities
Net (loss) income	$	(4,598,291	)	$	1,632,190
Adjustments to reconcile net loss to net cash used in operating activities:
Unrealized loss on investment		—			19,600
Amortization of debt discount		2,306,015			495,185
Loss (Gain) on derivative liability		442,496			(4,775,161	)
Warrants issued for services		—			321,669
Shares issued for services		9,600			84,177
Depreciation		1,734			1,479
Changes in assets and liabilities
Prepaid expense		40,668			150,747
Accounts payable and accrued expenses		205,125			263,042
Net cash used in operating activities		(1,592,653	)		(1,807,072	)

Cash Flows from Investing Activities
Purchase of fixed assets		—			(12,149	)
Net cash used in investing activities		—			(12,149	)

Cash Flows from Financing Activities
Proceeds from related party debt		1,323,902			1,285,136
Payments on related party debt		(557,933	)		(423,002	)
Proceeds from convertible notes payable		592,931			972,000
Proceeds on loans payable		32,500			—
Payments on loans payable		(48,733	)		—
Net cash from financing activities		1,342,667			1,834,134

Net change in cash		(249,986	)		14,913

Cash, beginning of period		249,986			235,073

Cash, end of period		—		$	249,986

Supplemental disclosure of cash flow information
Cash paid for interest	$	—		$	49,125
Cash paid for tax	$	—		$	—

Non-Cash investing and financing transactions
Common stock issued to settle related party debt	$	—		$	461,684
Common stock issued for for coversion of parent company stock	$	11,662		$	11,106
Common stock issued to settle convertible debt	$	380,966		$	339,645
Recognition of derivative debt discount	$	1,539,922		$	978,723
Conversion of derivative liability	$	1,524,143		$	526,870
Reclassifaction of tainted warrants to derivitive liability	$	—		$	978,723

See accompanying notes to financial statements

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

Nature of Business

Nano Mobile Healthcare, Inc, formally Vantage mHealthcare, Inc (the “Company”) was incorporated in Nevada on April 21, 2010.

Effective as of February 20, 2014, our majority shareholder sublicensed to the Company rights acquired under a license agreement with the National Aeronautics and Space Administration (“NASA”) to certain inventions and patent rights owned by NASA relating to chemical sensing nanotechnology, for use within the United States and its territories.

As a result of the sublicense, the Company is now a mobile health technology company that is developing personalized and point-of-care screening using applications based upon chemical sensing methods.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"). In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The Company has adopted a June 30 year end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had $0 and $249,986 of cash as of June 30, 2016, and 2015, respectively.

Property and Equipment

Property and equipment are recorded at historical cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:

Furniture and fixtures			5 - 7 Years
Computer equipment			5 - 7 Years

The Company recognized $1,734 and $1,479 of depreciation expense for the year ended June 31, 2016 and 2015, respectively. The accumulated depreciation as of June 30, 2016, and 2015 are $3,213 and $1,479 respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses and shareholder loans. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Financial assets and liabilities recorded at fair value in our balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Fair Value of Financial Instruments, continued

Level 1— Quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2— Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3— Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended June 30, 2016:

	Level 1		Level 2		Level 3		Total
Assets
Securities -available for sale	$	400	$	—	$	—	$	400
Liabilities
Derivative Financial Instruments	$	—	$	—	$	2,952,511	$	2,952,511

Financial assets and liabilities measured at fair value on a recurring basis are summarized below for the year ended June 30, 2015:

	Level 1		Level 2		Level 3		Total
Assets
Securities -available for sale	$	400	$	—	$	—	$	400
Liabilities
Derivative Financial Instruments	$	—	$	—	$	2,494,236	$	2,494,236

The following table presents details of the Company’s level 3 derivative liabilities as of June 30, 2016, and 2015:

	Amount
Balance June 30, 2014	$	659,934
Debt discount originated from derivative liabilities		978,723
Initial loss recorded		579,360
Reclassification of tainted warrants to derivative liability		6,157,610
Adjustment to derivative liability due to debt conversion		(526,870)
Change in fair market value of derivative liabilities		(5,354,521)
Balance June 30, 2015	$	2,494,236

Debt discount originated from derivative liabilities		1,539,922
Initial loss recorded		10,411,656
Adjustment to derivative liability due to debt conversion		(1,524,143	)
Change in fair market value of derivative liabilities		(9,969,160	)
Balance June 30, 2016	$	2,952,511

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Investment Securities

Under Accounting Standards Codification (ASC) 320-10, Investments – Debt and Equity Securities, investment securities must be classified as held-to-maturity, available-for-sale, or trading. Management has determined the appropriate classification at the time of purchase to be available-for-sale. The classification of investment securities is significant since it directly impacts the accounting for unrealized gains and losses on securities. Investment securities not classified as held-to-maturity are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses, net of tax, reported in other comprehensive income and do not affect earnings until realized. Investment in stock is carried at cost. The Company has no trading account investment securities. The fair values of the Company’s investment securities are generally determined by reference to quoted prices from reliable independent sources utilizing observable inputs.

The Company evaluates all the securities in its investment securities portfolio on a quarterly basis, and more frequently when economic conditions warrant additional evaluations, to determine if an other-than-temporary impairment (OTTI) exists pursuant to guidelines established in ASC 320-10. In evaluating for possible impairment, consideration is given to many factors including the length of time and the extent to which the fair value has been less than cost, whether the market decline was affected by macroeconomic conditions, the financial condition and near-term prospects of the issuer, and the Company’s ability and intent to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company may consider whether the investment securities are issued by the federal government or its agencies or government sponsored agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

If management determines that an investment experienced an OTTI, management must then determine the amount of the OTTI to be recognized in earnings. If management does not intend to sell the investment security and it is more likely than not that the Company will not be required to sell the investment security before recovery of its amortized cost basis less any current period loss, the OTTI will be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the OTTI related to other factors will be recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings will become the new amortized cost basis of the investment. If management intends to sell the investment security or it is more likely than not the Company will be required to sell the investment security before recovery of its amortized cost basis less any current period credit loss, the OTTI will be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. Any recoveries related to the value of these investment securities are recorded as an unrealized gain (as other comprehensive income [loss] in shareholders’ equity) and not recognized in income until the investment security is ultimately sold. From time to time, management may dispose of an impaired investment security in response to asset/liability management decisions, market movements, business plan changes, or if the net proceeds can be reinvested at a rate of return that is expected to recover the loss within a reasonable period of time.

Management evaluates all investment securities on a quarterly basis, and more frequently when economic conditions warrant additional evaluations, for determining if an OTTI exists pursuant to guidelines established in ASC 320-10, Investments – Debt and Equity Securities. Current accounting guidance generally provides that if a marketable security is in an unrealized loss position, whether due to general market conditions or industry or issuer-specific factors, the holder of the investment securities must assess whether the impairment is other-than-temporary.

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Because the Company has no net income, the tax benefit of the accumulated net loss has been fully offset by an equal valuation allowance.

Use of Estimates

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

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

Other Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting stockholder’s equity that, under GAAP, are excluded from net income (loss), including foreign currency translation adjustments, gains and losses related to certain derivative contracts, and gains or losses, prior service costs or credits, and transition assets or obligations associated with pension or other postretirement benefits that have not been recognized as components of net periodic benefit cost.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “ Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services ,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Recent Accounting Pronouncements

The Company does not expect any recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 2 – LIQUIDITY AND GOING CONCERN

The Company has incurred losses since inception, and has not yet received any revenues from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be successful in these efforts.

NOTE 3 – PREPAID EXPENSES

During the year ended June 30, 2016, the Company has prepaid interest of $57,375 on convertible notes payable. As of June 30, 2016 and 2015, the balance that remained capitalized as prepaid expenses is $969 and $41,637, respectively.

NOTE 4 – SECURITIES AVAILABLE FOR SALE

On January 16, 2014, the Company acquired 2,000,000 restricted common shares of a publicly traded company. (See Note 6 for more details) The investment was acquired at market value of $0.03 per share, and is held for future trade. The value of the investment will be adjusted quarterly to reflect the change in market value of the holding. The investment does not represent a controlling interest in the publicly traded company. The company has elected the fair value option under ASC 825 allowing gains and losses to be recorded in earnings each period. From receipt of the shares on January 16, 2014 through June 30, 2016 the securities were reduced in value from $60,000 to $400 due to a change in the publicly traded company’s stock price. These securities are measured under level 1 of ASC 820.

NOTE 5 – RELATED PARTY TRANSACTIONS

During the years ended June 30, 2016 and 2015, the Company received cash advances from a shareholder in the amount of 1,323,902 and $1,285,136, of which $557,933 and $432,002 was repaid during the same period, respectively. As of June 30, 2016 and 2015, there was a balance due to the shareholder of $1,166,419 and $400,450, respectively. All amounts advanced to the Company are unsecured, non-interest bearing and due upon demand.

NOTE 6 - CONVERTIBLE NOTES PAYABLE

Convertible notes payable consist of the following as of June 30, 2016 and 2015:

			2016	2015
Convertible notes payable		1,615,708				1,149,744
Less: Discounts		(151,912)				(647,773)
Convertible notes net of discount	$	1,463,796			$	501,971

On April 18, 2014, the Company issued a convertible promissory note in which the Company will be taking tranche payments on pre-defined dates, the total of these payments cannot exceed $650,000. There is an original discount component of 10% per tranche and an additional expense fee of $5,000. Therefore, the funds available to the Company will be $650,000 and the liability (net of interest) will be $750,000 when all disbursements have been received by the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 18 months after receipt. Each tranche bears interest at 8% per annum. The loan is secured by shares of the Company’s common stock. Each portion of the loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015, the Company received six additional tranche disbursements of $50,000 on July 15, 2014, $100,000 on September 30, 2014, $50,000 on November 3, 2014, $50,000 on December 1, 2014, $50,000 on December 29, 2014, and $50,000 on February 2, 2015.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

On July 20, 2015, the Company entered into a settlement agreement with the holder of the convertible note. Under the agreement the note holder agreed not to seek to enforce its rights or remedies under the Note in relation to the notice of conversion issued to convert a balance of the note amounting to $57,933; to not to exercise its rights of conversion pursuant to the Note, and if an event of default occurs, the Holder agrees not to sell any shares of common stock of the Company having an aggregate conversion value of $30,000 or more per week until such time as it has sold all of the Company’s common stock that it owns.

Under the agreement the Company agreed to a penalty in relation to the issuance of a note in the amount of $95,000; to release the holder from its obligation to advance additional funds to the Company; and to pay or refinance the amount due under the note plus accrued interest in four installment payments due on July 20, 2015, August 10, 2015, September 14, 2015 and October 12, 2015. In accordance with the agreement, the Company made the payments due on July 20, 2015 and August 10, 2015.

In respect of prepayment penalties payable to the Holder pursuant to the Note, the Company agreed to issue to the Holder additional convertible promissory notes with each having the same form, terms, and conditions as the original note. The value of the notes, which are due by each installment payment date, are equal to 30% of the payment delivered. During the three months ended September 30, 2015, the Company issued two notes related to the prepayment penalties of the installments due on July 20, 2015 and August 10, 2015 of $35,399 and $35,610, respectively.

After the payment was made on August 10, 2015, the Company and the note holder agreed to forgo the final two payments, cancel the settlements agreement, and therefore allow the noteholder to convert the notes as agreed to in the original note agreement. During the year ended December 31, 2016, the Company has converted $27,059 of the penalty note issued on July 20, 2015 into 20,900,000 (post split) shares of common stock.

There were no tranches taken during the year ended June 30, 2016

The following details the disbursements as of June 30, 2016:

Tranche Date	Principal with OID		Accrued Interest		Converted to Stock		Balance -June 30, 2016
April 21, 2014	$	110,776	$	6,167	$	116,943		-
May 6, 2014		55,384		4,443	$	59,827		-
June 11, 2014		55,384		5,147	$	60,531		-
July 16, 2014		55,384		4,236	$	59,620		-
September 30, 2014		110,768		14,192	$	16,221		108,739
November 3, 2014		55,384		7,332		None		62,716
December 1, 2014		55,384		6,743		None		62,127
December 29, 2014		55,384		6,436		None		61,820
February 2, 2015		55,384		6,227		None		61,611
Unamortized Original Issue Discount		(325)		-				(325	)
	$	608,907	$	60,923				356,688

During the year ended June 30, 2015, $20,223 of the debt discount related to the outstanding trances was amortized.

The Note is shown net of an unamortized debt discount of $325.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

The Company analyzed the conversion options embedded in the Convertible Promissory Notes for derivative accounting consideration under ASC 815, Derivatives and Hedging, and determined that the tranches received on September 30, 2014, November 3, 2014, December 1, 2014, and December 29, 2014, and February 2, 2015 were convertible during the year ended June 30, 2016.

On March 29, 2015, the Note issued on September 30, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $110,768 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $182,755 and initial interest expense of $71,987 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $16,221 of the note balance into 3,375,481 (post split) shares of common stock with a fair value of $34,753

As of June 30, 2016, $110,768 of the debt discount has been amortized. The fair value of the derivative liability at June, 30 2016 is $189,074 resulting in a loss on the change in fair value of the derivative of $6,319. The Note is shown net of a debt discount of $0 at June 30, 2016.

On May 2, 2015, the Note issued on November 3, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $100,842 and initial interest expense of $45,458 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $55,384 of the debt discount has been amortized. The fair value of the derivative liability at June, 30 2016 is $110,756 resulting in a gain on the change in fair value of the derivative of $9,914. The Note is shown net of a debt discount of $0 at June 30, 2016.

On May 30, 2015, the Note issued on December 1, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $89,695 and initial interest expense of $34,311 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $55,384 of the debt discount has been amortized. The fair value of the derivative liability at June, 30 2016 is $110,756 resulting in a loss on the change in fair value of the derivative of $21,061. The Note is shown net of a debt discount of $0 at June 30, 2016.

On June 29, 2015, the Note issued on December 29, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $90,811 and initial interest expense of $35,427 based on the Black Scholes Merton pricing model.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

As of June 30, 2016, $55,384 of the debt discount has been amortized. The fair value of the derivative liability at June, 30 2016 is $110,756 resulting in a loss on the change in fair value of the derivative of $19,945. The Note is shown net of a debt discount of $0 at June 30, 2016.

On August 1, 2015, the Note issued on February 2, 2014 became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $55,384 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $93,642 and initial interest expense of $38,258 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $50,404 of the debt discount has been amortized. The fair value of the derivative liability at June, 30 2016 is $74,470 resulting in a gain on the change in fair value of the derivative of $19,172. The Note is shown net of a debt discount of $4,980 at June 30, 2016.

On October 1, 2014, the Company issued a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $12,500, and prepaid interest of $7,500. The note was due on March 30, 2015 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2015, $12,500 of the debt discount has been amortized. The note matured on March 30, 2015.

During the years ended June 30, 2016 and 2015, the holder of the note exercised his right to convert $14,000 and $56,000 for full settlement of the note balance into 222,222 and 378,930 shares of common stock (post split) respectively.

On November 17, 2014, the Company issued a short-term convertible promissory note in the amount of $70,000, which consisted of cash proceeds of $50,000, a debt discount of $12,500 and prepaid interest of $7,500. The note is due on November 14, 2015 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2016, $4,731 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $34,950 of the note balance into 3,474,111 (post split) shares of common stock.

During the year ended June 30, 2015, the Company elected to prepay the entire term’s interest of $7,500. This payment was capitalized as a prepaid asset and has been amortized over the term of the note. The interest expense related to this loan was $2,849 and $4,651 for the years ending June 30, 2016 and 2015. As of June 30, 2016 and 2015 the remaining prepaid interest balance was $0 and $2,849, respectively.

On May 16, 2015, the Note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $70,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $93,179 and initial loss of $23,179 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $52,692 of the debt discount has been amortized. The fair value of the derivative liability at June, 30, 2016 is $40,094 resulting in a gain on the change in fair value of the derivative of $8,761.

On December 23, 2014, the Company issued a short-term convertible promissory note in the amount of $70,000, which consisted of cash proceeds of $50,000, a debt discount of $12,500 and prepaid interest of $7,500. The note is due on December 18, 2015 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2016, $5,938 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $7,100 of the note balance and accrued interest into 16,435,041 (post split) shares of common stock.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

The Company elected to prepay the entire term’s interest of $7,500. This payment was capitalized as a prepaid asset and has been amortized over the term of the note. The interest expense related to this loan was $3,573 and $3,927 for the year ending June 30, 2016 and 2015. As of June 30, 2015, the remaining prepaid interest balance was $0.

On June 21, 2015, the Note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $70,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $104,711 and initial loss of $34,711 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $70,000 of the debt discount has been amortized. The fair value of the derivative liability at June, 30, 2016 is $99,985 resulting in a loss on the change in fair value of the derivative of $94,425.

On January 13, 2015, the Company issued a short-term convertible promissory note in the amount of $74,000. The note is due on October 15, 2015 and bears interest at 8% per annum. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 58% multiplied by the market price, which is the average of the lowest three quoted prices for the common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date.

On July 12, 2015, the Note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $59,654 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $59,654 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $76,960 of the note balance and accrued interest into 1,517,526 (post split) shares of common stock.

As of June 30, 2016, $59,654 of the debt discount has been amortized. The fair value of the derivative liability at June, 30, 2016 is $0.

On January 26, 2015, the Company issued a convertible promissory note in which the Company will be taking tranche payments based on amounts determined by the note holder for total payments of not more than $250,000. There is an original discount component of $25,000. Therefore, the funds available to the Company will be $225,000 and the liability (net of interest) will be $250,000 when all disbursements have been received by the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 24 months after receipt. Each tranche bears interest at 12% per annum. The loan is secured by shares of the Company’s common stock. Each portion of the loan becomes convertible immediately upon issuance. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of the lesser of $0.045 per share or 60% multiplied by the market price per share, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion The Company has received two tranche disbursements of $75,000 on January 26, 2015 and 25,000 on April 28, 2015.

During the year ended June 30, 2016, $5,014 of the debt discount has been amortized. The Notes are shown net of an unamortized debt discount of $3,178 at June 30, 2016.

On January 26, 2015, the first trance became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $82,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $135,740 and initial loss on derivative liabilities of $53,240 based on the Black Scholes Merton pricing model.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

During the year ended June 30, 2016, the holder of the note exercised his right to convert $63,285 of the note balance into 32,953,300 shares of common stock.

As of June 30, 2016, $58,880 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $40,860 resulting in a gain on the change in fair value of the derivative of $1,873. The Note is shown net of a debt discount of $23,620 at June 30, 2016.

On April 28, 2015, the second trance became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $27,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $44,209 and initial loss on derivative liabilities of $16,709 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $16,191 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $45,823 resulting in a loss on the change in fair value of the derivative of $862. The Note is shown net of a debt discount of $11,339 at June 30, 2016.

On April 15, 2015, the Company issued a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $9,500, and prepaid interest of $10,500. The note is due on April 15, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2016, $7,527 of the debt discount has been amortized and the note is shown net $0 in unamortized debt discount.

On October 12, 2015, the second trance became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $60,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $248,055 and initial loss on derivative liabilities of $187,555 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $2,850 of the note balance and accrued interest into 6,088,888 shares of common stock.

As of June 30, 2016, $60,500 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $139,980 resulting in a gain on the change in fair value of the derivative of $47,575. The Note is shown net of a debt discount of $11,339 at June 30, 2016.

On May 20, 2015, the Company issued a convertible promissory note in the amount of $43,000 for $43,000 cash. The note is due on February 22, 2016 and bears interest at 8% per annum. The loan becomes convertible 180 days after date of the note. The loan can then be converted into shares of the Company’s common stock at a rate of 58% multiplied by the market price, which is the average of the lowest three (3) quoted price for the common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date.

On November 16, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $43,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $52,875 and initial loss on derivative liabilities of $9,875 based on the Black Scholes Merton pricing model.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

During the year ended June 30, 2016, the holder of the note exercised his right to convert $19,510 of the note balance and accrued interest into 9,030,880 shares of common stock.

As of June 30, 2016, $43,000 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $27,757 resulting in a gain on the change in fair value of the derivative of $57,979. The Note is shown net of a debt discount of $0 at June 30, 2016.

On June 7, 2015, the Company issued a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $9,500, and prepaid interest of $10,500. The note is due on June 8, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s comm on stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2016, $8,905 of the debt discount has been amortized and the note is shown net $0 in unamortized debt discount.

On December 4, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $60,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $121,252 and initial loss on derivative liabilities of $60,752 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $60,500 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $139,980 resulting in a gain on the change in fair value of the derivative of $18,979. The Note is shown net of a debt discount of $0 at June 30, 2016.

On June 19, 2015, the Company issued a short-term convertible promissory note in the amount of $37,500 for $25,000 cash, an original issue discount of $6,875, and prepaid interest of $5,625. The note is due on June 19, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $6,875 of the debt discount has been amortized and the note is shown net $0 in unamortized debt discount.

On December 16, 2015, the Note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $30,625 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $122,955 and an initial loss on derivative liabilities of $92,330 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $30,625 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 and June 30, 2015 was $74,989 and $0, respectively resulting in a loss on the change in fair value of the derivative of $47,966. The Note is shown net of a debt discount of $0 at June 30, 2016.

On June 28, 2015, the Company issued a convertible promissory note in the amount of $150,000 for $100,000 cash, an original issue discount of $50,000. The note is due on December 28, 2016 and bears interest at 15% per annum. The loan becomes convertible 180 days after date of the note. The loan can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day to the conversion date. As of June 30, 2016, $33,515 of the debt discount has been amortized and the note is shown net $16,485 in unamortized debt discount.

On December 25, 2015, the Note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $100,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $624,135 and an initial loss on derivative liabilities of $524,135 based on the Black Scholes Merton pricing model.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

During the year ended June 30, 2016, the holder of the note exercised his right to convert $4,250 of the note balance and accrued interest into 13,268,375 (post split) shares of common stock.

As of June 30, 2016, $50,949 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 and June 30, 2015 was $299,882 and $0, respectively resulting in a gain on the change in fair value of the derivative of $199,083. The Note is shown net of a debt discount of $49,051 at June 30, 2016.

On June 29, 2015, the Company issued a convertible promissory note in which the Company will be taking tranche payments based on amounts determined by the note holder for total payments of not more than $100,000. There is an original discount component of $10,000. Therefore, the funds available to the Company will be $90,000 and the liability (net of interest) will be $100,000 when all disbursements have been received by the Company. Each tranche is accounted for separately with each principal and OID balance becoming due 24 months after receipt. Each tranche bears interest at 15% per annum. Each portion of the loan becomes convertible immediately upon issuance. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of the lesser of $0.02 per share or 50% multiplied by the market price per share, which is the lowest quoted price for the common stock during the 25 trading days immediately preceding the conversion date. During the period ended June 30, 2015, the Company has received one tranche disbursements of $30,000 on June 29, 2015.As of June 30, 2016, $1,508 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $1,492 at June 30, 2016.

On June 29, 2015, the first trance became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $33,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $67,818 and initial loss on derivative liabilities of $34,818 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $4,375 of the note balance and accrued interest into 2,500,000 (post split) shares of common stock.

As of June 30, 2016, $16,568 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 and June 30, 2015 is $57,242 and $79,497, respectively resulting in a gain on the change in fair value of the derivative of $22,255 The Note is shown net of a derivative debt discount of $16,432 at June 30, 2016.

On July 7, 2015, the Company issued a convertible promissory note in the amount of $40,000 for $38,000 cash. The note is due on June 30, 2016 and bears interest at 8% per annum. The loan is secured by shares of the Company’s common stock. The loan becomes convertible as of the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 60% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2016, $2,000 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

On July 7, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $40,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $60,307 and initial loss on derivative liabilities of $20,307 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $7,634 of the note balance and accrued interest into 25,806,701 (post split) shares of common stock.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

As of June 30, 2016, $40,000 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016, was $63,989 resulting in a loss on the change in fair value of the derivative of $214,842. The Note is shown net of a derivative discount of $0 at June 30, 2016.

On July 24, 2015, the Company issued a convertible promissory note in the amount of $56,250 for $50,000 cash. The note is due on April 24, 2016 and bears interest at 10% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible as of the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

On July 24, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $56,250 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $101,339 and initial loss on derivative liabilities of $45,089 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $3,919 of the note balance into 7,072,292 shares of common stock.

As of June 30, 2016, $56,250 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016, was $108,924 resulting in a loss on the change in fair value of the derivative of $95,189. The Note is shown net of a derivative discount of $0 at June 30, 2016.

On August 3, 2015, the Company issued a convertible promissory note in the amount of $75,000 for $50,000 cash, an original issue discount of $13,750 and prepaid interest of $11,250. The note is due on January 29, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $13,750 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

On January 30, 2016, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $61,250 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $300,208 and initial loss on derivative liabilities of $238,958 based on the Black Scholes Merton pricing model.

During the year ended June 30, 2016, the holder of the note exercised his right to convert $9,144 of the note balance into 23,169,420 shares of common stock.

As of June 30, 2016, $61,250 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016, was $149,857 resulting in a gain on the change in fair value of the derivative of $26,331. The Note is shown net of a derivative discount of $0 at June 30, 2016.

On August 5, 2015, the Company issued a convertible promissory note in the amount of $37,500 for $25,000 cash, an original issue discount of $6,875 and prepaid interest of $5,625. The note is due on January 29, 2017 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $4,178 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $2,697 at June 30, 2016.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

On February 1, 2016, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $30,625 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $183,481 and initial loss on derivative liabilities of $152,856 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $12,655 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016, was $74,974 resulting in a gain s on the change in fair value of the derivative of $108,507. The Note is shown net of a derivative discount of $17,970 at June 30, 2016.

On August 12, 2015, the Company issued a convertible promissory note in the amount of $50,000 for $44,000 cash, an original issue discount of $6,000. The note is due on February 12, 2016 and bears interest at 12% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible as of the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lesser of lowest quoted price for the common stock during the previous 20 trading day period ending on the conversion date and the lowest trading price on the 30th trading day after the funding of the note. As of June 30, 2016, $6,000 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $0 at June 30, 2016.

On August 12, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $50,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $358,250 and initial loss on derivative liabilities of $308,250 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $50,000 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $99,961 resulting in a gain on the change in fair value of the derivative of $258,289. The Note is shown net of a derivative discount of $0 at June 30, 2016.

On August 12, 2015, the Company issued a convertible promissory note in the amount of $115,000 for $115,000 cash. The note is due on August 12, 2016 and bears interest at 12% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible as of the date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lesser of lowest quoted price for the common stock during the previous 20 trading day period ending on the conversion date and the lowest trading price on the 30th trading day after the funding of the note.

On August 12, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $115,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $215,932 and initial loss on derivative liabilities of $100,932 based on the Black Scholes Merton pricing model.

As of June 30, 2016, the holder of the note exercised his right to convert $89,183 of the note balance and accrued interest into 50,006,582 shares of common stock (post split). The fair value of the derivative liability related to the converted debt as of June 30, 2016 was $208,716.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

As of June 30, 2016, $101,767 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $59,112 resulting in a loss on the change in fair value of the derivative of $51,896. The Note is shown net of a derivative discount of $13,233 at June 30, 2016.

On September 8, 2015, the Company issued a short-term convertible promissory note in the amount of $70,000 for $50,000 cash, an original issue discount of $9,500, and prepaid interest of $10,500. The note is due on September 9, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $7,662 of the debt discount has been amortized and the note is shown net $1,838 in unamortized debt discount.

On September 8, 2015, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $60,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $406,912 and initial loss on derivative liabilities of $346,412 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $37,529 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $133,706 resulting in a gain on the change in fair value of the derivative of $273,206. The Note is shown net of a derivative discount of $22,971 at June 30, 2016.

On October 29, 2015, the Company issued a convertible promissory note in the amount of $37,500 for $25,000 cash, an original issue discount of $7,500 and prepaid interest of $2,500. The note is due on October 28, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $5,034 of the debt discount has been amortized. The Note is shown net of an unamortized debt discount of $2,466 at June 30, 2016.

On April 26, 2016, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $37,500 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $62,469 and initial loss on derivative liabilities of $31,844 based on the Black Scholes Merton pricing model.

As of June 30, 2016, $13,035 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $18,706 resulting in a gain on the change in fair value of the derivative of $43,763. The Note is shown net of a derivative discount of $24,465 at June 30, 2016.

On November 25, 2015, the Company issued two short-term convertible promissory note in the amount of $300,000 for $200,000 cash, an original issue discount of $75,000, and prepaid interest of $25,000. The notes are due on May 22, 2016 and bears interest at 15% per annum, which was prepaid by the Company and is being amortized over the life of the loan. The loan is secured by shares of the Company’s common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Company’s common stock at a rate of 50% multiplied by the market price, which is the lowest quoted price for the common stock during the 25 trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2016, $75,000 of the debt discount has been amortized and the note is shown net $21,788 in unamortized debt discount.

On May 21, 2016, the note became convertible at the option of the holder. On this date the Company recorded a debt discount in the amount of $300,000 in connection with the initial valuation of the derivative liability of the note to be amortized utilizing the effective interest method of accretion over the term of the note. Further, the Company recognized a derivative liability of $8,700,201 and initial loss on derivative liabilities of $8,455,201 based on the Black Scholes Merton pricing model.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

As of June 30, 2016, $300,000 of the debt discount has been amortized. The fair value of the derivative liability at June 30, 2016 was $389,817 resulting in a gain on the change in fair value of the derivative of $8,310,384. The Note is shown net of a derivative discount of $0 at June 30, 2016.

Derivative liability for these notes were valued under the Black-Scholes model, with the following assumptions:

Fair value assumptions – derivative notes:	June 30, 2016
Risk free interest rate		0.20-0.52	%
Expected term (years)		0.09-1.50
Expected volatility		456-605	%
Expected dividends		0	%

Fair value assumptions – derivative notes:	June 30, 2015
Risk free interest rate		0.09-0.64	%
Expected term (years)		0.45-1.01
Expected volatility		198-288	%
Expected dividends		0	%

NOTE 7 – COMMON STOCK

On March 21, 2016, the “Company filed (i) a Certificate of Amendment to its Certificate of Incorporation (the “Charter”), with the Secretary of State of the State of Delaware, to effect a 10:1 reverse stock split of the Company’s shares of common stock, $0.001 par value and (ii) a Certificate of Amendment to its Charter with the Secretary of State of the State of Delaware, to increase its authorized capital stock from 500,000,000 to 1,000,000,000 shares. The effect of the stock split has been retroactively reflected in the financial statements.

On August 24, 2015, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designations of Rights, Preferences, Privileges and Restrictions of Series A Convertible Preferred Stock.

Under the terms of the Certificate of Designation, 24,000,000 shares of the Company’s preferred stock will be designated as Series A Convertible Preferred. Each share of the Series A Convertible Preferred shall be convertible into five (5) shares of Common Stock without the payment of additional consideration by the holder thereof, subject to certain terms, conditions and adjustments as described in the Certificate of Designation. The holders of Series A Convertible Preferred shall be entitled to receive any dividends before the holders of the Common Stock, in an amount at least equal to the product of (x) the dividend payable on each share of Common Stock and (y) the number of shares of Common Stock issuable upon conversion of a share of Series A Convertible Preferred, in each case calculated on the record date for determination of holders entitled to receive such dividend. Each holder of outstanding Series A Convertible Preferred shall be entitled to vote with the holders of the Common Stock, as a single class, on all matters presented to the holders of Common Stock an as-converted basis calculated as of the record date for such vote.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

During the year ended June 30, 2015, the Company issued 368,353 shares of common stock (post split) with a fair value of $71,875 for the conversion of a $71,875 note payable. The note also had an associated derivative liability with a fair value on the date of conversion of $90,476. The conversion of the derivative liability has been recorded through additional paid-in capital.

During the year ended June 30, 2015, the Company issued 371,197 (post split) shares of common stock with a fair value of $116,943 for the conversion of a $116,943 note payable. The note also had an associated derivative liability with a fair value on the date of conversion of $209,614. The conversion of the derivative liability has been recorded through additional paid-in capital.

During the year ended June 30, 2015, the Company issued 166,667 (post-split) shares of common stock with a fair value of $25,000 for the partial conversion of a note payable issued on May 6, 2014 The note also had an associated derivative liability with a fair value on the date of conversion of $40,350. The conversion of the derivative liability has been recorded through additional paid-in capital.

During the year ended June 30, 2015, the Company issued 54,043 (post-split) shares of common stock for services with a fair value of $21,077.

During the year ended June 30, 2015, the Company issued 461,684 (post-split) shares of common stock for the settlement of related party debt with a fair value of $461,684.

During the year ended June 30, 2015, the Company issued 50,000 (post-split) shares of common stock for services with a fair value of $20,500.

During the year ended June 30, 2015, the Company issued 327,692 (post-split) shares of common stock with a fair value of $34,827 for the partial conversion of a note payable issued on May 6, 2014 The note also had an associated derivative liability with a fair value on the date of conversion of $52,643. The conversion of the derivative liability has been recorded through additional paid-in capital.

On February 27, 2015, the Company issued 600,000 (post-split) common shares for the conversion of the Parent Company common shares of stock when a Parent Company shareholder exercised their stock warrant and converted their holdings into Vantage mHealthcare common stock in a cashless transaction. The fair value of the common shares is $300,000. The fair value of the common shares is considered to be the excess value from the carry over cost basis of $0 and is recorded as a pass through to additional paid in capital.

During the year ended June 30, 2015, the Company issued 378,930 (post split) shares of common stock with a fair value of $56,000 for the partial conversion of a note payable issued on September 30, 2014. The note also had an associated derivative liability with a fair value on the date of conversion of $79,464. The conversion of the derivative liability has been recorded through additional paid-in capital.

During the year ended June 30, 2015, the Company issued 440,451 (post split) shares of common stock with a fair value of $35,000 for the partial conversion of a note payable issued on November 17, 2014. The note also had an associated derivative liability with a fair value on the date of conversion of $54,353. The conversion of the derivative liability has been recorded through additional paid-in capital.

On August 25, 2015, the Company entered into an exchange agreement with its majority shareholder, Nanobeak, LLC, pursuant to which Nanobeak exchanged 11,736,684 (post split) shares of the Company’s common stock in exchange for 23,473,368 shares of the Company’s Series A Convertible Preferred Stock.

During the year ended June 30, 2016, the Company issued 400,000 (post split) shares of common stock for services with a fair value of $9,600.

During the year ended June 30, 2016, the Company issued 215,820,752 (post split) shares of common stock with a fair value of $380,966 for the conversion of a notes payable and accrued interest. The notes also had an associated derivative liability with a fair value on the date of conversion of $1,524,143. The conversion of the derivative liability has been recorded through additional paid-in capital.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 8 – STOCK WARRANTS

On July 15, 2014, the Company granted stock warrants for 29,149 shares of common stock (post-split) in association with a long-term loan at no cost to the lender. These warrants have an expiration date of July 15, 2019, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.24/share, the exercise price is $0.0143/share, the value of the issuance is $69,956.

On October 1, 2014, the Company granted stock warrants for 32,012 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.164/share, the exercise price is $0.123/share, the value of the issuance is $52,498.

On November 17, 2014, the Company granted stock warrants for 80,769 shares of common stock (post-split) in association with a long-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.065/share, the exercise price is $0.049/share, the value of the issuance is $52,498.

On December 23, 2014, the Company granted stock warrants for 115,894 shares of common stock (post-split) in association with a long-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.045/share, the exercise price is $0.034/share, the value of the issuance is $52,152.

On April 15, 2015, the Company granted stock warrants for 256,098 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0443/share, the exercise price is $0.017/share, the value of the issuance is $113,438.

On June 7, 2015, the Company granted stock warrants for 437,500 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.024/share, the exercise price is $0.009/share, the value of the issuance is $104,985.

On June 19, 2015, the Company granted stock warrants for 255,682 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.025/share, the exercise price is $0.009/share, the value of the issuance is $63,911.

On June 28, 2015, the Company granted stock warrants for 1,184,211 shares of common stock (post-split) in association with a long-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.021/share, the exercise price is $0.008/share, the value of the issuance is $278,251.

On September 8, 2015, the Company granted stock warrants for 3,500,000 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0034/share, the exercise price is $0.001/share, the value of the issuance is $118,985.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

On October 29, 2015, the Company granted stock warrants for 4,687,500 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0012/share, the exercise price is $0.0045/share, the value of the issuance is $60,930.

On November 23, 2015, the Company granted stock warrants for 75,000,000 shares of common stock (post-split) in association with a short-term loan at no cost to the lender. These warrants have a term of five years, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0012/share, the exercise price is $0.0045/share, the value of the issuance is $524,937.

We issued warrants to purchase 3,887,500 shares of common stock (post-split) to non-employees during the year ended June 30, 2014, during such time the warrants were accounted for as equity. During the year end June 30, 2016, the Company issued convertible notes payable that provide for the issuance of shares of common stock that became convertible. The conversion term for the convertible notes are variable based on certain factors. As of June 30, 2016, the number of shares to be issued under the notes are indeterminate. Due to the fact that the number of shares issuable are indeterminate, the equity environment is tainted and the warrants are included in the value of the derivative. On the date the equity environment became tainted, the Company recorded a reduction to additional paid in capital in the amount of $6,157,610 in connection with the initial valuation of the derivative liability of the warrants based on the Black Scholes Merton pricing model. The derivative liability related to these warrants was $1,165 and $913,168 as of June 30, 2016, and 2015, respectively. During the year ended June 30, 2016 and 2015, the Company recorded a gain of $912,003 and $0, respectively, related to the change in fair value on the warrants.

In total the derivative liability related to the warrants as of June 30, 2016, and 2015 was $26,911 and $1,270,470, respectively and the Company recorded a gain in the change in fair value due to derivative warrant liability of $1,243,559 and $5,547,074 during the years ended June 30, 2016 and 2015, respectively. The Company also recorded a debt discount associated with the warrants in the amount of $275,000 and an initial loss of $429,852. As of June 30, 2016, $257,108 of the debt discount has been amortized. The associated notes are shown net of the $17,892 discount

Fair value assumptions – derivative warrants:	Grant Date
Risk free interest rate		1.59%- 1.88	%
Expected term (years)		5-7
Expected volatility		206-362	%
Expected dividends		0	%

Fair value assumptions – derivative warrants:	June 30, 2016
Risk free interest rate		0.71-1.01	%
Expected term (years)		5-7
Expected volatility		437-474	%
Expected dividends		0	%

Fair value assumptions – derivative warrants:	June 30, 2015
Risk free interest rate		1.63	%
Expected term (years)		5-7
Expected volatility		206.48	%
Expected dividends		0	%

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

Summary of warrant activity for the two years ended June 30, 2016 and 2015 is presented below:

			Weighted		Weighted Average
	Number of		Average		Remaining		Aggregate
	Shares		Exercise		Contractual Life		Intrinsic
	Granted		Price		(years)		Value

June 30, 2015	$	6,395,225	$	0.05		5	$	13,393

Grants		83,187,500	$	0.003		4.31		(254,569)
Expired
June 30, 2015	$	89,582,725	$	0.05		9.31	$	(241,176)

Exercise		Shares		Shares		Weighted Contractual Life		Weighted Average
Price Range		Outstanding		Exercisable		Remaining (in Years)		Exercise Price
$	0.009		1,045,213		1,045,213		4.92	$	0.009
$	0.030		228,675		228,675		4.37	$	0.030
$	.047-.050		4,387,500		4,387,500		3.98	$	0.05
$	0.059-0.070		273,576		273,576		6.5	$	0.0685
$	0.1		500,000		500,000		6.3	$	0.1

NOTE 9 – COMMITMENTS

On January 1, 2014, the Company entered into a Sub-License Agreement affiliated with the National Aeronautics and Space Administration (“NASA”) pursuant to which the Company was granted a royalty-bearing, non-transferable license to certain inventions and patent rights owned by NASA relating to chemical sensing nanotechnology, for use within the United States and its territories. The License is effective as of December 31, 2013 and subject to an initial five year term, during which the License will be exclusive to the Company. Following the initial five-year term, the License shall automatically convert to a non-exclusive license. The License may be terminated by NASA following a 30 day cure period, among other reasons, upon a breach of the License Agreement or upon its determination that the Company has failed to adequately develop or commercialize the licensed patents. Specific milestones and commercialization requirements are set forth in the License Agreement. NASA provides no warranties under the License Agreement and assumes no responsibility for our use, sale or other disposition of the licensed technology. We agree to indemnify NASA against all liabilities arising from such use, sale or other disposition. We must pay certain royalties in connection with the License as set forth in the License Agreement. The Company expensed $378,919 and $491,403 in cost related to the agreement, during the years ended June 30, 2016 and 2015, respectively.

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NANO MOBILE HEALTHCARE, INC

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

NOTE 10 – INCOME TAXES

For the year ended June 30, 2016, the cumulative net operating loss carry-forward from continuing operations is approximately $10,424,192 at June 30, 2016, and will expire beginning in the year 2030.

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of June 30, 2016 and 2015:

	2016			2015
Deferred tax asset attributable to:
Net operating loss carryover	$	3,545,000		$	2,142,000
Valuation allowance		(3,545,000	)		(2,142,000	)
Net deferred tax asset	$	—		$	—

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $10,424,192 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

NOTE 11 – SUBSEQUENT EVENTS

Subsequent to year end, the Company issued 30,000,000 shares of common stock for services.

Subsequent to year end, the Company issued 530,366,966 shares of common stock in settlement of notes payable.

On October 6, 2016, the Company entered into an exchange agreement with John E. Groman Group (“Groman”) pursuant to which the Company agreed with Groman to exchange his 811,938,579 shares of our common stock into 16,238,772 shares of Series B Convertible Preferred Stock.

On November 11, 2016, the Company’s Board of Directors voted to designate a class of preferred stock entitled Series B Convertible Preferred Stock, consisting of up to twenty million (20,000,000) shares, par value $0.001. Under the Certificate of Designation, the holders of Series B Convertible Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to the shareholders on at as converted basis, at a rate of fifty (50) vote for each share held. The holders are further entitled to convert each share of their Series B Convertible Preferred Stock into fifty (50) shares of common.

On November 14, 2016, we entered into a letter agreement with Kineret Kallman, the owner of certain promissory notes in our company. Under the agreement, we agreed to pay Kallman $101,500 in 29 equal monthly installments of $3,500 starting on December 1, 2016. We are current in our payment obligations.

On March 10, 2017, we entered into a settlement agreement with JDF Capital, Inc. and agreed to pay a total of $300,000, with $50,000 monthly installments at the time of execution through August 1, 2017. We issued a convertible promissory note to JDF in the principal amount of $100,000 with interest at 4% per annum and maturing on September 1, 2017. The note is convertible into shares of our common stock at a price per share equal to 70% of our lowest trading price for the 20 trading days prior to JDF's notice of conversion. In addition, we agreed to sign a confession of judgment for $693,952.88, which will be reduced to $392,952.88 upon payment of $300,000, and will thereafter remain outstanding until the note is paid off or fully converted. All outstanding warrants held by JDF will be returned to us upon fulfillment of the terms of the settlement agreement. Finally, we agreed to pay JDF's counsel $14,000. Other than the initial $50,000 payment and the $5,000 legal fee payment made upon execution of the settlement agreement, we have not made any subsequent payments under the settlement agreement. There can be no assurance that we are not declared in default of the settlement agreement and subject to the default provisions of the settlement agreement.

On April 24, 2017, we entered into a settlement agreement with Phoenix Worldwide Holdings, Inc. ("Phoenix"), Navesink River Capital LLC ("Navesink") and Adam 2 LLC ("Adam"), concerning convertible promissory notes we issued in favor of Phoenix in the aggregate amount of $275,000. Under the settlement agreement, we agreed to pay Navesink and Adam, on behalf of Phoenix $275,000 as follows: monthly installments of $7,500 for six months starting May 1, 2017 (which initial payment has been 2016 made); monthly installments of $10,000 for six months starting November 1, 2017; and a final balloon payment of $170,000 on or before May 1, 2018. Pursuant to the terms of the Phoenix notes, we will owe Phoenix a balance of $135,700 following the above payout.

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Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

No events occurred requiring disclosure under Item 304 of Regulation S-K during the fiscal year ending June 30, 2016.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being June 30, 2016. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.

Management’s Annual Report on Internal Control over Financing Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of June 30, 2016 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of June 30, 2016, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending June 30, 2017: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Changes in Internal Control Over Financial Reporting.

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There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

On November 2, 2016, Edward Rollins resigned as a member of our board of directors. There was no known disagreement with Mr. Rollins on any matter relating to our operations, policies or practices.

On November 11, 2016, pursuant to our Certificate of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series B Convertible Preferred Stock, consisting of up to twenty million (20,000,000) shares, par value $0.001. Under the Certificate of Designation, the holders of Series B Convertible Preferred Stock are entitled to vote together with the holders of our common stock on all matters submitted to the shareholders on at as converted basis, at a rate of fifty (50) vote for each share held. The holders are further entitled to convert each share of their Series B Convertible Preferred Stock into fifty (50) shares of common.

These rights of the holders of Series B Convertible Preferred Stock and other rights are set forth in the relevant Certificate of Designation filed with the Delaware Secretary of State on November 11, 2016, attached to this annual report as Exhibit 3.1, and incorporated by reference herein.

On March 10, 2017, we entered into a settlement agreement with JDF Capital, Inc. and agreed to pay a total of $300,000, with $50,000 monthly installments at the time of execution through August 1, 2017. We issued a convertible promissory note to JDF in the principal amount of $100,000 with interest at 4% per annum and maturing on September 1, 2017. The note is convertible into shares of our common stock at a price per share equal to 70% of our lowest trading price for the 20 trading days prior to JDF's notice of conversion. In addition, we agreed to sign a confession of judgment for $693,952.88, which will be reduced to $392,952.88 upon payment of $300,000, and will thereafter remain outstanding until the note is paid off or fully converted. All outstanding warrants held by JDF will be returned to us upon fulfillment of the terms of the settlement agreement. Finally, we agreed to pay JDF's counsel $14,000. Other than the initial $50,000 payment and the $5,000 legal fee payment made upon execution of the settlement agreement, we have not made any subsequent payments under the settlement agreement. There can be no assurance that we are not declared in default of the settlement agreement and subject to the default provisions of the settlement agreement. A copy of the settlement agreement is attached to this Annual Report on Form 810-K as Exhibit 10.1.

The settlement agreement is attached to this Annual Report on Form 10-K as Exhibit 10.2.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following information sets forth the name of our current directors and executive officers, their ages as of June 30, 2016 and their present positions.

Name	Age	Position Held with the Company
Joseph C. Peters	59	President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director
Tony van Bijleveld	57	Director
Dr. Steven R. Steinhubl	57	Chairman and Director

Set forth below is a brief description of the background and business experience of our executive officers and directors.

Joseph C. Peters was the former White House Drug Policy Office’s Acting Deputy Director for State and Local Affairs under both Presidents Clinton and Bush from December 1998 to October 2003. Since August 2014, Mr. Peters has been a senior research associate at the Institute for Intergovernmental Research in Tallahassee, Florida. Prior to that, from July 2013 to April 2014, he was Communications Director at the Pennsylvania Office of Attorney General. Mr. Peters earned a Juris Doctor from Dickinson School of Law in Pennsylvania, and a Bachelor’s Degree from King’s College, also in Pennsylvania.

Tony van Bijleveld is currently the General Manager for Patheon/DPX and was formerly General Manager for Alliance Boots in Europe, which is also an affiliate of Walgreens. Patheon is a leading global provider of contract drug development and manufacturing services. Up until this past spring 2014, Mr. van Bijleveld was the General

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Manager of Europe for Alliance Boots which is 45% owned by Walgreens. In this capacity he was responsible for European country operations and logistics. Mr. van Bijleveld has been instrumental in the development of top-performing global businesses in diagnostics, pharmaceuticals and biotechnology industries in over 30 countries, reflecting his experience in general management, marketing and sales management, acquisitions, operational excellence, and licensing and business development.

Over the past 30 years he has served in a variety of senior executive capacities in the pharmaceutical and biotech industry including: Managing Director of United Drug PLC, President/General Manager Russia for Schering Plough/MSD, SVP of Organon Biosciences, and Managing Director of KCL Foundation Labs. A native Australian, Mr. van Bijleveld has earned advanced degrees in Pharmacology, Biochemistry, Engineering and an MBA, from colleges in Australia, Holland and Candean.

Dr. Steven R. Steinhubl is Director of Digital Medicine at the Scripps Translational Science Institute, and a practicing cardiologist at the integrated Scripps Health System. Dr. Steinhubl is working to lead the clinical transformation of healthcare by enabling the evidence driven adoption of mobile health technologies through the design and management of pragmatic clinical trials.

Before joining Scripps Health, Dr. Steinhubl, a cardiologist, clinical researcher and former pharmaceutical company executive, served as director of cardiovascular wellness and a clinician-scientist at the Geisinger Health System based in Danville, PA. Among his many accolades with over 25 years in medicine, Dr. Steinhubl served in the U.S. Air Force from 1991-2002 as a staff internist in Alaska and afterwards as a Lt. Colonel staff cardiologist, Lackland Air Force Base, Texas. He has led many funded research projects and trials in the areas of cardiovascular science. His copious works in medical research and cardiology have been published over 400 abstracts, peer-reviewed manuscripts and book chapters.

He held several academic positions, starting as an Assistant Professor of Medicine from 1998-2008 at Wilford Hall Medical Center, Lackland Air Force Base, TX, Associate Professor at University of North Carolina and University of Kentucky, and now a Professor at Scripps Translational Science Institute.

Dr. Steinhubl attended Purdue University earning a B.S. in Chemical Engineering; Georgetown University with a M.S. in Physiology and attended St Louis University School of Medicine where he graduated Cum Laude in 1988. He continued post doctorate training in Internal Medicine completing his internship and residency at David Grant Medical Center in conjunction with University of California, Davis School of Medicine and Fellowship training in Cardiology and Interventional Cardiology at the Cleveland Clinic.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past ten years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

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Committees of the Board

Our company currently does not have nominating, compensation or audit committees or committees performing similar functions nor does our company have a written nominating, compensation or audit committee charter. Our directors believe that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the board of directors.

Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our CEO and director, Joseph Peters , at the address appearing on the first page of this annual report.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent beneficial shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To the best of our knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments thereof) received by us, the following persons have failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act during fiscal year ended June 30, 2016:

Name and principal position	Number of late reports	Transactions not timely reported	Known failures to file a required form
Joseph Peters President CEO and Director	0	0	0
Tony van Bijleveld Director	0	0	0
Steven Steinhubl Director	0	0	0
Edward Rollins Director	0	0	0
NanoBeak, LLC 10% Holder	0	0	0

Code of Ethics

We have not adopted a Code of Ethics that applies our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Item 11. Executive Compensation

The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended June 30, 2016 and 2015.

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SUMMARY COMPENSATION TABLE

Name

and

principal

position

Year

Salary ($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings ($)

All Other

Compensation

($)

Total

($)

Joseph Peters, President, Chief Executive Officer, Principal Executive Officer,

Chief Financial Officer, Principal Financial Officer,

Principal Accounting Officer, and Director

2016

2015

10,000

$50,000

65,917.25

10,000

115,917.25

Narrative Disclosure to the Summary Compensation Table

We have not entered into any employment agreement or consulting agreement with our executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.

Although we do not currently compensate our officers, we reserve the right to provide compensation at some time in the future. Our decision to compensate officers depends on the availability of our cash resources with respect to the need for cash to further our business purposes.

On January 15, 2015, we granted stock warrants to Mr. Peters for 2,000,000 shares of common stock for services. These warrants have an expiration date of January 15, 2020, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0332/share, the exercise price is $0.05/share, the value of the issuance was $65,917.25.

Stock Option Grants

We have not granted any stock options to the executive officers or directors since our inception.

Outstanding Equity Awards at Fiscal Year-End

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of June 30, 2016.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS	STOCK AWARDS

Name

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)

Option

Exercise

Price

($)

Option

Expiration

Date

Number

or Units

Stock That

Have

Not

Vested

(#)

Market

Value

Units

Stock

That

Have

Not

Vested

($)

Equity

Incentive

Plan

Awards:

Number

Unearned

Shares,

Units or

Other

Rights

That Have

Not

Vested

(#)

Equity

Incentive

Plan

Awards:

Market or

Payout

Value of

Unearned

Shares,

Units or

Other

Rights

That

Have Not

Vested

(#)

Joseph Peters

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Director Compensation

The table below summarizes all compensation of our directors for the fiscal year ended June 30, 2016.

DIRECTOR COMPENSATION
Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Tony van Bijleveld	-	-	-	-	-	-	-
Steven R. Steinhubl	-	-	-	-	-	-	-
Edward Rollins	-	-	-	-	-	-	-

Narrative Disclosure to the Director Compensation Table

On September 22, 2014 the Board of Directors approved the appointment of Tony van Bijleveld as a director of the Company. On January 15, 2015, we granted stock warrants to Mr. van Bijleveld for 2,000,000 shares of common stock for services. These warrants had an expiration date of January 15, 2020, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0332/share, the exercise price is $0.05/share, the value of the issuance was $65,917.25.

On September 22, 2014 the Board of Directors approved the appointment of Steven R. Steinhubl as a director of the Company. On January 15, 2015, we granted stock warrants to Mr. Steinhubl for 2,000,000 shares of common stock for services. These warrants had an expiration date of January 15, 2020, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0332/share, the exercise price is $0.05/share, the value of the issuance was $65,917.25.

On September 29, 2014 the Board of Directors approved the appointment of Edward Rollins as a director of the Company. On January 15, 2015, we granted stock warrants to Mr. Rollins for 2,000,000 shares of common stock for services. These warrants had an expiration date of January 15, 2020, and were valued using the Black Scholes Valuation Model, the stock price at the grant date was $0.0332/share, the exercise price is $0.05/share, the value of the issuance was $65,917.25.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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The following table sets forth, as of May 4, 2017 , certain information as to shares of our common stock and Series A Preferred Stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group.

Except as otherwise indicated, all shares are owned directly and the shareholders listed possesses sole voting and investment power with respect to the shares shown. Unless otherwise indicated below, each entity or person listed below maintains an address of 3 Columbus Circle, 15th Floor New York, NY 10019.

	Common Stock			Series A Convertible Preferred Stock			Series B Convertible Preferred Stock
Name and Address of Beneficial Owner	Number of Shares Owned (1)	Percent of Class (2)		Number of Shares Owned (1)	Percent of Class (2)		Number of Shares Owned (1)	Percent of Class (2)
Joseph Peters(3)	2,000,000	*	%	-	-	%	-	-	%
Edward Rollins(4)	2,000,000	*	%	-	-	%	-	-	%
Tony van Bijleveld(5)	2,000,000	*	%	-	-	%	-	-	%
Steven R. Steinhubl(6)	2,000,000	*	%	-	-	%	-	-	%
All Directors and Executive Officers as a Group (4 persons)	8,000,000	1.1	%	-	-	%	-	-	%
5% Holders
Nanobeak, LLC(7)	11,811,684	1.5	%	23,473,368	100	%	-	-	%
John E. Groman(8)	811,938,579	53.8	%	-	-	%	16,238,772	100	%

Less than 1%

(1)

Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table.

	(2)	Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. The percent of class of common stock is based on 787,698,074 shares of common stock as of May 4, 2017. The percent of class of Series A Convertible Preferred Stock is based on 23,473,368 shares of Series A Preferred Stock outstanding as of May 4, 2017. The percent of class of Series B Convertible Preferred Stock is based on 16,238,772 shares of Series B Preferred Stock outstanding as of May 4, 2017.
	(3)	Includes a warrant to purchase 2,000,000 shares of common stock exercisable at $0.05 per share until January 15, 2020.
	(4)	Includes a warrant to purchase 2,000,000 shares of common stock exercisable at $0.05 per share until January 15, 2020.
	(5)	Includes a warrant to purchase 2,000,000 shares of common stock exercisable at $0.05 per share until January 15, 2020.
	(6)	Includes a warrant to purchase 2,000,000 shares of common stock exercisable at $0.05 per share until January 15, 2020.

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(7)

Nanobeak, LLC holds 75,000 shares of common stock and 23,473,368 shares of Series A Convertible Preferred Stock, which may be presently converted into a total of 11,736,684 shares of common stock. Jeremy Barbera is the beneficial owner of a majority of the outstanding units of Nanobeak LLC.

(8)

Includes 16,238,772 shares of Series B Convertible Preferred Stock, which may be presently converted into a total of 811,938,579 shares of common stock.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Other than the transactions described below and under the heading “Executive Compensation” (or with respect to which such information is omitted in accordance with SEC regulations), for the past two fiscal years there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were or will be a participant in which the amount involved exceeded or will exceed $120,000, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

We entered into an exchange agreement (the “Exchange Agreement”) with our majority shareholder, Nanobeak, LLC (“Nanobeak”), pursuant to which Nanobeak exchanged 117,366,840 shares of our common stock in exchange for 23,473,368 shares of our Series A Convertible Preferred Stock, par value $0.001 (the “Series A Convertible Preferred”).

Each share of the Series A Convertible Preferred shall be convertible into five (5) shares of Common Stock without the payment of additional consideration by the holders. The holders of Series A Convertible Preferred shall be entitled to receive any dividends before the holders of the common stock, in an amount at least equal to the product of (x) the dividend payable on each share of common stock and (y) the number of shares of common stock issuable upon conversion of a share of Series A Convertible Preferred, in each case calculated on the record date for determination of holders entitled to receive such dividend. Each holder of outstanding Series A Convertible Preferred shall be entitled to vote with the holders of the Common Stock, as a single class, on all matters presented to the holders of Common Stock an as-converted basis calculated as of the record date for such vote.

During the years ended June 30, 2016 and 2015, we received cash advances from Nanobeak in the amount of $911,631 and $1,323,902, of which $551,558 and $557,933 was repaid during the same period, respectively. As of June 30, 2016 and 2015, there was a balance due to Nanobeak of $1,166,419 and $400,450, respectively. All amounts advanced to us are unsecured, non-interest bearing and due upon demand.

During the year ended June 30, 2015, we received the rights to the sensor’s nanotechnology that has been internally developed by Nanobeak. We have issued 7,875,000 shares of common stock with a market value of $630,000 in exchange for the exclusive rights to this technology. In addition, we issued 9,030,000 common shares for the conversion of Nanobeak’s common shares and issued 4,999,998 common stock warrants, exercisable at $0.10 per share and expiring in 7 year from the date of issuance.

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Accordingly, we do not have an independent director as of June 30, 2016.

Item 14. Principal Accounting Fees and Services

Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:

Financial Statements for the Year Ended June 30	Audit Services	Audit Related Fees	Tax Fees	Other Fees
2016	$39,500	$0	$0	$0
2015	$31,200	$0	$0	$0

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PART IV

Item 15. Exhibits, Financial Statements Schedules

(a)

Financial Statements and Schedules

The following financial statements and schedules listed below are included in this Form 10-K.

Financial Statements (See Item 8)

(b)

Exhibits

Exhibit Number	Description
3.1	Certificate of Designation
10.1	Global Settlement & Mutual Release
10.2	Settlement Agreement
10.3	November 14, 2016 Letter Agreement
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 formatted in Extensible Business Reporting Language (XBRL).

**Provided herewith

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SIGNATURES

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

Nano Mobile Healthcare, Inc.

By: /s/ Joseph C. Peters

Joseph C. Peters

President, Chief Executive Officer, Principal Executive Officer,

Chief Financial Officer, Principal Financial Officer,

Principal Accounting Officer, and Director

May 5, 2017

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 the capacities and on the dates indicated.

By: /s/ Joseph C. Peters

Joseph C. Peters

President, Chief Executive Officer, Principal Executive Officer,

Chief Financial Officer, Principal Financial Officer,

Principal Accounting Officer, and Director

May 5, 2017

By: /s/ Tony van Bijleveld

Tony van Bijleveld

Director

May 5, 2017

By: /s/ Dr. Steven R. Steinhubl

Steven R. Steinhubl