Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

FORM 10-Q

____________

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

For the quarterly period ended March 31, 2015

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

For the transition period from ______ to _______

Commission File Number 001-32984

MICROELECTRONICS TECHNOLOGY COMPANY

(Name of small business issuer in its charter)

Nevada	20-2675800
(State of incorporation)	(I.R.S. Employer Identification No.)

4264 Lady Burton Street, Las Vegas, NV 89119

(Address of principal executive offices)

(888) 681-9777 ext 5

(Registrant’s telephone number)

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

Yes [X]

No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]

No [ ]

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

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

Yes [ ]

No [X]

As of March 31, 2015 there were 7,034,916 shares of the registrant’s $0.00001 par value common stock issued and outstanding.

MICROELECTRONICS TECHNOLOGY COMPANY*

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	5
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	9
ITEM 4.	CONTROLS AND PROCEDURES	9

PART II. OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	10
ITEM 1A.	RISK FACTORS	10
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	10
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	10
ITEM 4.	MINE SAFETY DISCLOSURES	10
ITEM 5.	OTHER INFORMATION	10
ITEM 6.	EXHIBITS	11
	SIGNATURES	15

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Microelectronics Technology Company (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we,"”MELY,” "our," "us," the "Company," refers to Microelectronics Technology Company.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MICROELECTRONICS TECHNOLOGY COMPANY

(A Development Stage Company)

Condensed Consolidated Financial Statements

(Expressed in US dollars)

March 31, 2015 (unaudited)

Financial Statement Index

	Pages
Condensed Consolidated Balance Sheets (unaudited)	F-1

Condensed Consolidated Statements of Operations (unaudited)	F-2

Condensed Consolidated Statements of Cash Flows (unaudited)	F-3

Notes to the Condensed Consolidated Financial Statements (unaudited)	F-4 to F-34

Microelectronics Technology Company
(A Development Stage Enterprise)
Consolidated Balance Sheet
March 31, 2015 and June 30, 2014
		March 31, 2015 (Unaudited)			June 30, 2014
	ASSETS
Current Assets
Cash		$	23,325			5,592
Accounts receivable			79			18,171
Loan receivable			275,728			6,175
Total Current Assets			299,132			29,938
Non-Current Assets
Equipment			307,803			357,720
Intangible assets			251,673			303,920
Security deposit			3,465			3,465
Total Non-Current Assets			562,941			665,104

TOTAL ASSETS		$	862,074		$	695,042

	LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities		$	161,631			74,311
Related party loans			144,404			3,356
Stockholders' loans			4,540			4,540
Loan payable			4,975			4,975
Notes payable, net of discount			2,093,094			1,093,566
Derivative liabilities			1,707,940			420,092
Total Current Liabilities			4,116,584			1,600,839

Stockholders' Deficit
Preferred stock:
Authorized: 50,000,000 shares, $0.00001 par value
Series A Authorized: 110,000 shares, $0.00001 par value;
issued and outstanding: 110,000 and 110,000 shares
as of March 31, 2015 and June 30, 2014, respectively			1			1
Series B Authorized: 1,000 shares, $0.00001 par value;
issued and outstanding: 1,000 and 1,000 shares
as of March 31, 2015 and June 30, 2014, respectively			-			-
Series C Authorized: 1,500 shares, $0.00001 par value;
issued and outstanding: 66 and 0 shares
as of March 31, 2015 and June 30, 2014, respectively			-			-
Common stock:
Authorized: 7,500,000,000 shares, $0.00001 par value;
issued and outstanding: 7,034,916 and 1,111,868 shares
as at March 31, 2015 and June 30, 2014, respectively (1)			70,349			11,119
Additional paid-in capital			4,704,087			2,112,852
Stock subscriptions receivable			(38,400	)		(38,400	)
Deficit accumulated in the development stage			(7,990,548	)		(2,991,369	)
Total stockholders' Deficit			(3,254,511	)		(905,797	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	862,074		$	695,042

(1) All common share amounts and per share amounts in these financial statements, reflect the one thousand-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effective March 16, 2015, respectively, including retroactive adjustment of common share amounts. See Note 11.

The accompanying notes are an integral part of these financial statements

F-1

Microelectronics Technology Company
(A Development Stage Company)
Consolidated Statements of Operations
(Expressed in U.S. Dollars)

													Cumulative
													during the
													Development
													Stage
													from Inception
	For the three months ended						For the nine months ended						(April 11, 2011
	March 31,						March 31,						through
	2015			2014			2015			2014			March 31, 2015)
Revenue	$	19,896		$	5,167		$	84,526		$	13,534		$	128,759

Management Fee Income - Related Party		-			-			-			-			8,000

Expenses
Advertising		48,453			18,000			116,244			54,095			390,886
Amortization expense		17,161			-			52,246			-			138,327
Consulting fees		976,417			13,676			1,201,171			42,638			1,193,977
Depreciation expense		18,484			-			56,208			-			256,483
Impairment of mineral claims		-			-			-			-			124,911
Management fees		60,000			30,000			120,000			75,000			355,000
Professional fees		7,701			21,390			74,159			36,202			289,755
Other General & Administrative		52,109			35,276			306,979			68,361			539,821
Total Expenses		1,180,325			118,342			1,927,008			276,297			3,289,160

Loss from Operations		(1,160,429	)		(113,175	)		(1,842,482	)		(262,763	)		(3,152,401	)

Other Income (Expenses)
Other Income		-			-			-			-			162,723
Change in fair value of derivative		30,959			55,215			427,972			246,842			517,529
Convertible debt discount		-			(200,823	)		-			(292,681	)		(991,831	)
Interest expense		(1,576,366	)		(282,952	)		(3,584,668	)		(497,585	)		(4,526,567	)
Total Other Expenses		(1,545,407	)		(428,560	)		(3,156,697	)		(543,424	)		(4,838,147	)

Loss before Income Taxes		(2,705,837	)		(541,735	)		(4,999,179	)		(806,187	)		(7,990,548	)

Income Taxes		-			-			-			-			-

Net Loss		(2,705,837	)		(541,735	)		(4,999,179	)		(806,187	)		(7,990,548	)

Net Loss per share, basic and diluted	$	(0	)	$	(0	)	$	(1	)	$	(1	)

Weighted average number of shares
outstanding; basic and diluted (2)		6,435,459			408,553			3,428,497			255,582

(2) All common share amounts and per share amounts in these financial statements, reflect the one thousand-for-one reverse stock splits of the issued and outstanding shares of the common stock of the Company, effectiveMarch 16, 2015, respectively, including retroactive adjustment of common share amounts. See Note 11.

The accompanying notes are an integral part of these financial statements

F-2

Microelectronics Technology Company
(A Development Stage Enterprise)
Consolidated Statement of Cash Flow

							Cumulative
							during the
							Development
							Stage
	For the nine months						from Inception
	ended						(April 11, 2011)
	March 31,						to
	2015			2014			March 31, 2015)
Operating Activities
Net Loss		(4,999,179	)		(806,187	)		(7,990,548	)
Adjustments to reconcile net loss
to net cash provided by (used in) operations:
Convertible debt issued for services rendered		-			-			32,316
Amortization expense		52,246			-			138,326
Interest expense		1,495,648			497,585			2,437,145
Change in derivative liabilities		(427,972	)		(246,842	)		(517,529	)
Amortization of debt discount		2,089,020			292,681			3,080,851
Depreciation		56,208			3,616			66,994
Stock issued for services		149,500			-			149,500
Impairment of mineral claims		-			-			124,911
Adjustments in reorganization		-			-			61,475
Change in operating assets and liabilities:
Accounts receivable		18,092			134			307
Loan receivable		(269,553	)		(6,175	)		(275,728	)
Prepaid expenses		-			-			668
Accounts payable and accrued expenses		87,320			29,854			98,918
Net cash provided by (used in) Operating Activities		(1,748,669	)		(235,333	)		(2,592,393	)
Investing Activities
Acquisition of equipment		(6,291	)		(10,018	)		(374,797	)
Acquisition of mineral claims		-			-			(124,911	)
Acquisition of intangible assets		-			-			(390,000	)
Security deposits		-			-			(3,465	)
Net cash provided by (used in) Investing Activities		(6,291	)		(10,018	)		(893,173	)
Financing Activities
Proceeds of issuance of common stocks		-			-			1,584
Proceeds of notes payable		1,631,645			451,839			3,226,836
Payments to Shareholders' loans		-			-			4,540
Proceeds of loan from Drake Group		-			-			4,975
Proceeds of loan from related parties		141,048			(20,709	)		309,356
Former related party loan		-			(190,084	)		-
Stock subscriptions receivable		-			-			(38,400	)
Net cash provided by (used in) Financing Activities		1,772,693			241,046			3,508,891

Net increase (decrease) in cash		17,733			(4,305	)		23,325

Cash at beginning of period		5,592			4,683			-

Cash at end of period	$	23,325		$	378		$	23,325

Non-cash Investing and Financing Activities
Acquisition of intangible asset	$	-		$	-		$	140,000
Preferred stock issued for debt settlement	$	-		$	-		$	-
Net asset adjustment in reorganization	$	-		$	-		$	177,858

The accompanying notes are an integral part of these financial statements

F-3

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 1 –Basis of Presentation

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Cloud Data Corporation, a company incorporated in the State of Nevada. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year end is June 30, 2015 and 2014.

Note 2 – Nature of Operations and Continuance of Business

Microelectronics Technology Company (the “Company”) was incorporated in the State of Nevada on May 18, 2005 under the name Admax Resources Inc., which name was changed on February 9, 2007 to China YouTV Corp. and then to Microelectronics Technology Company on August 31, 2009. From May 18, 2005 to August 26, 2011, the Company’s business operations were limited to the acquisition and evaluation of mineral claims and the evaluation of an internet media venture in China.

On August 26, 2011, the Company entered into a Share Exchange Agreement with Cloud Data Corporation (“Cloud Data”). Pursuant to the agreement, the Company issued 70,000 shares of common stock in exchange for all of the issued and outstanding shares of Cloud Data. The acquisition was a capital transaction in substance and therefore has been accounted for as a recapitalization, which is outside the scope of Accounting Standards Codification (“ASC”) 805, Business Combinations. Under recapitalization accounting, Cloud Data was considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. These consolidated financial statements include the accounts of the Company since the effective date of the recapitalization and the historical accounts of the business of Cloud Data since inception on April 11, 2011. As a result of the transaction, the Company’s business operations have consisted of online marketing and advertising services since August 26, 2011, to the present.

On November 2, 2011 the President, Edward Manetta, resigned. He was replaced by Brett Everett as President, Secretary, Treasurer and a director.

On January 15, 2015, the Board of Directors authorized a 1,000:1 reverse stock split of the common shares. The reverse stock split received regulatory approval. The record date for the reverse stock split was March 16, 2015. The authorized number of common shares remained unchanged. All references in the accompanying financial statements to the number of common shares have been restated to reflect the reverse stock split.

Note 3 - Summary of Significant Accounting Policies

Use of Estimates.

The preparation of these financial statements in conformity with US 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to stock-based compensation and deferred income tax valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Basic and Diluted Loss Per Share.

The Company computes (loss) per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted per share (EPS) on the face of the income statement. Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

F-4

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents.

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Financial Instruments.

The Company’s financial instruments consist principally of cash, amounts receivable, and accounts payable, due to related parties and due to former related party. Pursuant to ASC 820, Fair Value Measurements and Disclosures, and ASC 825, Financial Instruments the fair value of the Company’s cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the Company’s other financial instruments approximate their current fair values because of their nature or respective relatively short maturity dates.

The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Mineral Property Costs.

Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Income Taxes.

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Interest and penalties on tax deficiencies recognized in accordance with ASC accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

Foreign Currency Translation.

The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 740 Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

F-5

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

Stock-based Compensation.

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.

ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

Recently Issued Accounting Pronouncements.

Recent Developed Accounting Pronouncements

Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position. Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013. The adoption of this update did not have a material impact on the consolidated financial statements.

Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on the consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements.

F-6

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 3 - Summary of Significant Accounting Policies (continued)

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in ASU No. 2013-05 resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this standard are effective prospectively for fiscal years, and interim reporting periods within those years, beginning December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-05 will have on our consolidated financial statements.

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our consolidated financial statements.

Development Stage Company

The Company is considered a development stage company, with no operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915. ACS 915 requires companies to report their operations, shareholders’ deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as April 11, 2011. Since inception, the Company has incurred an operating loss of $5,284,711. The Company’s working capital has been generated through advances from the principal of the Company and solicitation of subscriptions. Management has provided financial data since April 11, 2011 in the financial statements, as a means to provide readers of the Company’s financial information to be able to make informed investment decisions.

Going Concern

The Company is in the development stage and has generated $136,759 in revenues and has incurred a net loss of $7,990,548 since inception April 11, 2011. At March 31, 2015, the Company had $299,132 in current assets and $4,116,584 in current liabilities. Further, the Company incurred a loss of $4,999,179 for the nine months ended March 31, 2015. In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. To meet these objectives, the Company continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms, if at all. These financial statements do not give effect to any adjustments, which would be necessary should the Company be unable to continue as a going concern.

F-7

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 4 – Reverse Merger Transaction

Pursuant to a Share Exchange Agreement dated August 26, 2011, the Company agreed to acquire all of the issued and outstanding shares of Cloud Data in exchange for the issuance of 70,000 shares of the Company’s common stock. The share exchange was treated as a reverse acquisition with Cloud Data deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting, with the former shareholders of Cloud Data controlling approximately 52% of the voting rights after the closing of the transaction. The reverse merger is deemed a recapitalization and the consolidated financial statements represent the continuation of the financial statements of Cloud Data (the accounting acquirer/legal subsidiary) except for its capital structure, and the consolidated financial statements reflect the assets and liabilities of Cloud Data recognized and measured at their carrying value before the combination and the assets and liabilities of the Company (the legal acquiree/legal parent). The equity structure reflects the equity structure of the Company, the legal parent, and the equity structure of Cloud Data, the accounting acquirer, as restated using the exchange ratios established in the share exchange agreement to reflect the number of shares of the legal parent.

The allocation of the purchase price and adjustment to stockholders’ equity is summarized in the table below:

Net book value of the Company’s net assets acquired
Cash	$	505
Amounts receivable		386
Prepaid expenses		668
Mineral claims acquisition costs		124,912
Accounts payable		(47,403	)
Due to related parties		(73,734	)
Due to former related party		(190,084	)
Net assets	$	(184,750	)


Adjustment to stockholders’ equity
Reduction to additional paid-in capital	$	(177,858	)
Increase in common stock at par value		700
Adjustment to accumulated deficit		(7,592	)
Net asset adjustment to equity	$	(184,750	)

F-8

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 5 – Intangible Asset

On August 25, 2011, the Company acquired the right, title, and interest in software known as Domain Stutter with an estimated fair value of $140,000 in consideration for the issuance of 70,000 shares of common stock of the Company. Domain Stutter is a system that can auto-host thousands of domains per server and propagate them with unique content. The Company expects the initial software to bring value to the Company for the first five years of its service and as such the software is classified as a definitive asset and is amortized over a 5-year period. As of March 31, 2015, the accumulated amortization is $100,690 and the carrying value is $39,310.

On May 5, 2014, the Company purchased intellectual property assets related to Bitcoin mining, Bitcoin pool development and operation and Bitcoin server development for $250,000 from Classic Capital, Inc. The Company expects the intellectual property to bring value to the Company for the first six years of its service and as such the software is classified as a definitive asset and is amortized over a 6-year period. As of March 31, 2015, the accumulated amortization is $37,637 and the carrying value is $212,363.

Note 6 – Mineral Claims

On April 1, 2009, the Company acquired certain assets of First Light Resources, Inc. (“First Light”), namely nine mineral claims located near Wawa in northern Ontario, Canada. The purchase price for the assets was $114,000, payable in cash and/or Company common stock. No cash was paid to First Light and a total of 55 shares of Company common stock were issued to nine designated parties of First Light. The Company also assumed a $10,912 account payable of First Light in connection with this transaction. The total $124,911 purchase consideration in the First Light transaction was allocated to the nine mineral claims which represents First Light’s represented amount of exploration costs on the properties. Title to the mineral claims is being held in trust, on behalf of the Company, by Dog Lake Exploration Inc. (“Dog Lake”). Two of the nine mineral claims were allowed to lapse in fiscal 2009 and four claims remain in good standing as of March 31, 2014. After completion of the First Light transaction both Dog Lake and First Light are considered related parties with the Company due to significant stockholdings in the Company by a director in common between Dog Lake and First Light.

On April 1, 2010, Auric Mining Company (“Auric”) entered into an option agreement with the Company to acquire from the Company a fifty-two percent working interest in the mining claims held in trust, on behalf of the Company by Dog Lake Exploration Inc. Auric was to have completed its due diligence prior to the option expiring on September 15, 2011. An extension of the expiration date was granted by the Company pending further negotiations on timing, payment amounts and terms. At the time of the agreement, a director of the Company was also the President of Auric, therefore Auric was considered to be a related party and the option agreement was a related party transaction.

On March 22, 2013 the Company decided to no longer support mineral claims and therefore took an asset impairment charge equal to the amount of the mineral claims of $124,911.

Note 7 – Related Party Transactions

On August 25, 2011, the Company acquired 100% of the outstanding shares of Cloud Data Corporation in exchange for 70,000 common shares of the Company (Note 4). The acquisition was considered a related party transaction as the Company’s President and Director was also the President and Director of Cloud Data.

As of March 31, 2015, $144,404 is due to related parties as compared to $82,282 for the period ended March 31, 2014.

The Company is indebted to shareholders for $4,540 as of March 31, 2015 ($4,540 as of March 31, 2014), which is unsecured, non-interest bearing and is due on demand.

F-9

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 8 – Due to Former Related Party

As of September 30, 2013, $190,084 was due to the Company’s former President and Director who resigned in June 2007. This amount is non-interest bearing, unsecured and has no specific terms of repayment.

On October 11, 2013, Direct Capital acquired the debt and the Company executed an unsecured promissory note.

As of March 31, 2015, $0 is due to Former Related Parties (March 31, 2014 - $0).

Note 9 – Convertible Notes Payable

	March 31,			June 30,
	2015			2014
112 BIT Note #1		50,000			-
Adar Bays Note #1		26,654			50,000
Adar Bays Note #2		150,000			150,000
Adar Bays Note #3		33,333			-
Aladdin Trading Note #1		33,140			-
Classic Capital Note #1		150,000			150,000
Classic Capital Note #2		50,000			50,000
Classic Capital Note #3		50,000			50,000
Coventry Note #2		-			-
Direct Capital Note #3		-			11,000
Direct Capital Note #4		-			11,000
Direct Capital Note #5		-			11,000
Direct Capital Note #6		-			46,215
Direct Capital Note #7		69,889			75,089
Direct Capital Note #10		-			16,000
Direct Capital Note #11		-			16,000
Direct Capital Note #12		-			16,000
Direct Capital Note #13		-			16,000
Direct Capital Note #14		-			48,000
Direct Capital Note #15		71,237			71,237
Direct Capital Note #16		61,722			-
Direct Capital Note #17		27,000			-
Direct Capital Note #18		82,150			-
Direct Capital Note #19		16,000			-
Direct Capital Note #20		150,000			-
Direct Capital Note #21		150,000			-
Direct Capital Note #22		150,000			-
Direct Capital Note #23		150,000			-
Direct Capital Note #24		360,000			-
Direct Capital Note #25		75,000			-
Gel Properties Note #3		-			60,600
JMJ Note #1		-			33,300
JMJ Note #2		40,279			83,250
KBM Worldwide Note #1		5,460			37,500
KBM Worldwide Note #2		32,500			-
LG Capital Note #1		30,000			30,000
LG Capital Note #3		-			27,000
LG Capital Note #4		40,000			40,000
LG Capital Note #5		-			-
LG Capital Note #6		55,000			-
New Venture Note #1		50,000			50,000
Prolific Note #1		20,000			20,000
Union Capital Note #1		-			28,516
Union Capital Note #2		81,405			97,000
Union Capital Note #3		-			-
Union Capital Note #4		110,000			-
Union Capital Note #5		32,333			-
Union Capital Note #6		32,333			-
Union Capital Note #7		-			-
	$	2,435,435		$	1,294,708
Debt discount		(528,682	)		(263,546	)
Accrued interest		186,341			62,404
	$	2,093,094		$	1,093,566

F-10

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

112BIT, LLC Note #1

On November 24, 2014, the Company issued a convertible promissory note to 112BIT, LLC. Under the terms of the note, the Company has borrowed a total of $50,000 from 112 BIT, LLC, which accrues interest at an annual rate of 6% and has a maturity date of June 1, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,044 (nine months ended March 31, 2014 - $0) in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the five prior trading days including the day upon which a Notice of Conversion is received by the Company.”

As of March 31, 2015, principal balance of $50,000 (March 31, 2014 - $0) and accrued interest of $1,044 (March 31, 2014 - $0) was recorded.

Adar Bays, LLC Note #1

On May 19, 2014, the Company issued a convertible promissory note to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $50,000 from Adar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of May 19, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $2,522 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $142,413, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $55,360 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $45,266 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 550,100 common shares upon the conversion of $23,346 of the principal balance, and $42,629 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $26,654 (March 31, 2014 - $0), accrued interest of $2,982 (March 31, 2014 - $0), a debt discount of $4,734 (March 31, 2014 - $0) and a derivative liability of $44,424 (March 31, 2014 - $0) was recorded.

Adar Bays, LLC Note #2

On May 27, 2014, the Company issued a convertible promissory note to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $150,000 from Adar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of May 27, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $9,008 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $453,113, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

F-11

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

During the nine months ended March 31, 2015, the Company recorded a gain of $203,113 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $112,877 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $10,126 (March 31, 2014 - $0), a debt discount of $37,123 (March 31, 2014 - $0) and a derivative liability of $250,000 (March 31, 2014 - $0) was recorded.

Adar Bays, LLC Note #3

On May 27, 2014, the Company issued a convertible promissory note to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $33,333 from Adar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of May 27, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $2,309 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $94,941, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $39,386 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $26,627 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $33,333 (March 31, 2014 - $0), accrued interest of $2,309 (March 31, 2014 - $0), a debt discount of $6,706 (March 31, 2014 - $0) and a derivative liability of $55,555 (March 31, 2014 - $0) was recorded.

Aladdin Trading, LLC Note #1

On November 25, 2014, the Company arranged a debt swap under which a Direct Capital note was transferred to Aladdin Trading, LLC in the amount of $48,000. Under the terms of the note, the Company has borrowed a total of $50,240 from Aladdin Trading, LLC, which includes $2,240 in legal fees, accrues interest at an annual rate of 8% and has a maturity date of November 25, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $973 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $151,692, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $56,881 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $30,681 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

F-12

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

During the nine months ended March 31, 2015, the Company issued 285,000 common shares upon the conversion of $17,100 of the principal balance, and $39,578 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $33,140 (March 31, 2014 - $0), accrued interest of $973 (March 31, 2014 - $0), a debt discount of $19,559 (March 31, 2014 - $0) and a derivative liability of $55,233 (March 31, 2014 - $0) was recorded.

Classic Capital Note #1

On May 5, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $150,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of May 5, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $9,008 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $314,959, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $100,673 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $130,616 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $10,849 (March 31, 2014 - $0), a debt discount of $19,384 (March 31, 2014 - $0) and a derivative liability of $214,286 (March 31, 2014 - $0) was recorded.

Classic Capital Note #2

On May 31, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $50,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of May 31, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $3,003 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $60,909, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $10,520 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $36,397 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $50,000 (March 31, 2014 - $0), accrued interest of $3,332 (March 31, 2014 - $0), debt discount of $13,603 March 31, 2014 - $0) and a derivative liability of $71,429 (March 31, 2014 - $0) was recorded.

F-13

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Classic Capital Note #3

On June 30, 2014, the Company issued a convertible promissory note to Classic Capital Inc. Under the terms of the note, the Company has borrowed a total of $50,000 from Classic Capital Inc., which accrues interest at an annual rate of 8% and has a maturity date of June 30, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $3,003 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $74,524 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $3,095 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $25,675 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $50,000 (March 31, 2014 - $0), accrued interest of $3,003 (March 31, 2014 - $0), a debt discount of $24,325 (March 31, 2014 - $0) and a derivative liability of $71,429 (March 31, 2014 - $0) was recorded.

Coventry Enterprises, LLC Note #2

On November 25, 2014, the Company arranged a debt swap under which a Direct Capital note was transferred to Coventry Enterprises, LLC in the amount of $32,000. Under the terms of the note, the Company has borrowed a total of $34,240 from Coventry Enterprises, LLC, which includes $2,240 in legal fees, accrues interest at an annual rate of 8% and has a maturity date of November 25, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $167 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $113,390, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $38,497 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $34,240 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 622,545 common shares upon the conversion of $34,240 of the principal balance, and $74,893 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $0), accrued interest of $167 (March 31, 2014 - $0), a debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $0 (March 31, 2014 - $0) was recorded.

F-14

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #3

On July 31, 2013, the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $756 (March 31, 2014 - $581) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $11,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $0 (nine months ended March 31, 2014 - $11,000) was accreted to the statement of operations.

On October 22, 2014, the Company transferred the note balance of $11,000 to Union Capital, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $11,000), accrued interest of $2,185 (March 31, 2014 - $581) and a debt discount of $0 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #4

On August 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $524 (March 31, 2014 - $506) in interest expense.

On September 17, 2014, the Company transferred the note balance of $11,000 to LG Capital Funding, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $11,000), accrued interest of $1,760 (March 31, 2014 - $506) and a debt discount of $0 (March 31, 2014 - $0) was recorded.

F-15

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #5

On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $524 (March 31, 2014 - $434) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $11,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $0 (nine months ended March 31, 2014 - $10,970) was accreted to the statement of operations.

On September 17, 2014, the Company transferred the note balance of $11,000 to LG Capital Funding, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $11,000), accrued interest of $1,554 (March 31, 2014 - $434) and debt discount of $0 (March 31, 2014 - $30) was recorded.

Direct Capital Group Note #6

On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $46,215. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $501 (March 31, 2014 - $1,824) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $46,215 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $0 (nine months ended March 31, 2014 - $46,090) was accreted to the statement of operations.

On July 18, 2014, the Company transferred the note balance of $46,215 to Union Capital, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $46,215), accrued interest of $4,831 (March 31, 2014 - $1,824) and a debt discount of $0 (March 31, 2014 - $125) was recorded.

F-16

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #7

On October 11, 2013, the Company arranged a debt swap whereas Direct Capital Group acquired the debt from a former related party in the amount $190,084. The promissory note is unsecured, bears interest at 6% per annum. During the nine months ending March 31, 2015, the Company accrued $6,402 (nine months ended March 31, 2014 - $4,359) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $218,091 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $30,923 (nine months ended March 31, 2014 – gain of $97,156) due to the change in value of the derivative liability during the period, and a debt discount of $0 (nine months ended March 31, 2014 - $151,338) was accreted to the statement of operations.

On January 31, 2014, the Company transferred $50,000 of the note to Coventry Enterprises, LLC and $25,000 of the note to Prolific Group, LLC.

During the nine months ended March 31, 2015, the Company issued 628,000 common shares upon the conversion of $5,200 of the principal balance, and $10,669 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $69,889 (March 31, 2014 - $82,504), accrued interest of $11,929 (March 31, 2014 - $4,359), debt discount of $0 (March 31, 2014 - $38,746) and a derivative liability of $107,521 (March 31, 2014 - $95,550) was recorded.

Direct Capital Group Note #10

On December 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $164 (March 31, 2014 - $312) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $16,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $44 (nine months ended March 31, 2014 - $7,912) was accreted to the statement of operations.

F-17

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

On July 18, 2014, the Company transferred the note balance of $16,000 to Union Capital, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $16,000), accrued interest of $795 (March 31, 2014 - $312) and debt discount of $0 (March 31, 2014 - $8,088) was recorded.

Direct Capital Group Note #11

On January 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $63 (March 31, 2014 - $207) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $16,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $1,901 (nine months ended March 31, 2014 - $5,187) was accreted to the statement of operations.

On July 18, 2014, the Company transferred the note balance of $16,000 to Union Capital, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $16,000), accrued interest of $589 (March 31, 2014 - $207) and debt discount of $0 (March 31, 2014 - $10,813) was recorded.

Direct Capital Group Note #12

On February 28, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $501 (March 31, 2014 - $109) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $16,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $4,536 (nine months ended March 31, 2014 - $2,681) was accreted to the statement of operations.

On September 17, 2014, the Company transferred the note balance of $16,000 to LG Capital Funding, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $16,000), accrued interest of $929 (March 31, 2014 - $501) and debt discount of $0 (March 31, 2014 - $13,319) was recorded.

F-18

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #13

On March 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $323 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $16,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $8,087 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

On September 17, 2014, the Company transferred the note balance of $11,000 to LG Capital Funding, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $16,000), accrued interest of $642 (March 31, 2014 - $0) and debt discount of $0 (March 31, 2014 - $16,000) was recorded.

Direct Capital Group Note #14

On April 30, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $1,557 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $48,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $32,173 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

On November 25, 2014, the Company transferred the note balance of $48,000 to Aladdin Trading, LLC.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $0), accrued interest of $2,199 (March 31, 2014 - $0) and debt discount of $0 (March 31, 2014 - $0) was recorded.

F-19

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #15

On June 1, 2014 the Company entered into a Promissory Note with Direct Capital Group in the sum of $71,237. The promissory note is unsecured, bears interest at 8% per annum, and is due on demand or in increments. During the nine months ended March 31, 2015, the Company accrued $4,278 (March 31, 2014 - $0) in interest expense.

As of March 31, 2015, principal balance of $71,237 (March 31, 2014 - $0) and accrued interest of $4,731 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #16

On July 1, 2014 the Company entered into a Promissory Note with Direct Capital Group in the sum of $61,722. The promissory note is unsecured, bears interest at 8% per annum, and is due on demand or in increments. During the nine months ended March 31, 2015, the Company accrued $3,693 (March 31, 2014 - $0) in interest expense.

As of March 31, 2015, principal balance of $61,722 (March 31, 2014 - $0) and accrued interest of $3,693 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #17

On July 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $2,421 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $48,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $48,000 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

On October 22, 2014, the Company transferred the note balance of $21,000 to Union Capital, LLC.

As of March 31, 2015, principal balance of $27,000 (March 31, 2014 - $0), accrued interest of $2,421 (March 31, 2014 - $0) and debt discount of $0 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #18

On August 1, 2014 the Company entered into a Promissory Note with Direct Capital Group in the sum of $82,150. The promissory note is unsecured, bears interest at 8% per annum, and is due on demand or in increments. During the nine months ended March 31, 2015, the Company accrued $4,357 (March 31, 2014 - $0) in interest expense.

As of March 31, 2015, principal balance of $82,150 (March 31, 2014 - $0) and accrued interest of $4,357 (March 31, 2014 - $0) was recorded.

F-20

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #19

On October 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $1,021 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $48,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $47,956 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

On November 25, 2014, the Company transferred the note balance of $32,000 to Coventry Enterprises, LLC.

As of March 31, 2015, principal balance of $16,000 (March 31, 2014 - $0), accrued interest of $1,021 (March 31, 2014 - $0) and debt discount of $44 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #20

On October 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $5,951 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $150,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $149,588 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $5,951 (March 31, 2014 - $0) and debt discount of $412 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #21

On October 2, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 2, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $5,918 (March 31, 2014 - $0) in interest expense.

F-21

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $150,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $149,167 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $5,918 (March 31, 2014 - $0) and debt discount of $833 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #22

On October 3, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 3, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $5,885 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $150,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $148,737 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $5,885 (March 31, 2014 - $0) and debt discount of $1,263 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #23

On October 4, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 4, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $5,852 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $150,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $148,297 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $150,000 (March 31, 2014 - $0), accrued interest of $5,852 (March 31, 2014 - $0) and debt discount of $1,703 (March 31, 2014 - $0) was recorded.

F-22

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Direct Capital Group Note #24

On January 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $7,022 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $360,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $177,017 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $360,000 (March 31, 2014 - $0), accrued interest of $7,022 (March 31, 2014 - $0) and debt discount of $182,983 (March 31, 2014 - $0) was recorded.

Direct Capital Group Note #25

On January 2, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 2, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the nine months ended March 31, 2015, the Company accrued $1,447 (March 31, 2014 - $0) in interest expense.

On the date of issuance, interest expense relating to the beneficial conversion feature of this convertible note of $75,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the nine months ended March 31, 2015, a debt discount of $36,464 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $75,000 (March 31, 2014 - $0), accrued interest of $1,447 (March 31, 2014 - $0) and debt discount of $38,536 (March 31, 2014 - $0) was recorded.

Gel Properties Note #3

On May 27, 2014, the Company arranged a debt swap under which a Direct Capital note for $75,000 was transferred to Gel Properties, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on May 27, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $363 (nine months ended March 31, 2014 - $0) in interest expense.

F-23

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Upon the holder’s option to convert becoming active, the Company recorded a debt discount and derivative liability of $161,019, being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $3,810 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $54,955 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 84,686 common shares upon the conversion of $60,600 of the principal balance and $874 in interest, and $81,200 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $0), accrued interest of $0 (March 31, 2014 - $0), debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $0 (March 31, 2014 - $0) was recorded.

JMJ Financial Note #1

On July 18, 2013, the Company issued a convertible promissory note to JMJ Financial, LLC. Under the terms of the note, the Company borrowed $27,750 on July18, 2013 and $33,300 on February 20, 2014 for a total of $61,050 from JMJ Financial. In the event the Company does not repay note on or within 90 days of the date the funds were distributed, a one-time interest charge of 12% will be applied to the principal balance. The note has a maturity date of July 18, 2014 for the first payment and February 20, 2015 for the second payment. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $0 (nine months ended March 31, 2014 - $3,300) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $76,527 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $3,648 (nine months ended March 31, 2014 - $13,577) due to the change in value of the derivative liability during the period, and a debt discount of $21,440 (nine months ended March 31, 2014 - $28,130) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 97,653 common shares upon the conversion of $33,300 of the principal balance and $3,996 of interest, and $41,380 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $0), accrued interest of $0 (March 31, 2014 - $3,300), debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $0 (March 31, 2014 - $0) was recorded.

F-24

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

JMJ Financial Note #2

On April 16, 2014, the Company issued a convertible promissory note to JMJ Financial, LLC. Under the terms of the note, the Company borrowed $49,950 on April 16, 2014 and $33,300 on June 23, 2014 for a total of $83,250 from JMJ Financial. In the event the Company does not repay note on or within 90 days of the date the funds were distributed, a one-time interest charge of 12% will be applied to the principal balance. The note has a maturity date of April 16, 2015 for the first payment and June 23, 2015 for the second payment. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $9,990 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $414,278 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $36,543 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $69,189 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 619,415 common shares upon the conversion of $42,971 of the principal balance, and $81,981 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $40,279 (March 31, 2014 - $0), accrued interest of $9,990 (March 31, 2014 - $0), debt discount of $3,158 (March 31, 2014 - $0) and a derivative liability of $67,132 (March 31, 2014 - $0) was recorded.

KBM Worldwide Note #1

On April 11, 2014, the Company issued a convertible promissory note to KBM Worldwide, Inc. Under the terms of the note, the Company has borrowed a total of $37,500 from KBM Worldwide, Inc., which accrues interest at an annual rate of 8% and has a maturity date of January 15, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,561 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $42,549 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $35,273 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $37,500 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 412,200 common shares upon the conversion of $32,040 of the principal balance, and $70,762 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $5,460 (March 31, 2014 - $0), accrued interest of $2,219 (March 31, 2014 - $0), debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $7,060 (March 31, 2014 - $0) was recorded.

F-25

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

KBM Worldwide Note #2

On July 15, 2014, the Company issued a convertible promissory note to KBM Worldwide, Inc. Under the terms of the note, the Company has borrowed a total of $32,500 from KBM Worldwide, Inc., which accrues interest at an annual rate of 8% and has a maturity date of April 17, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,845 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $55,795 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $13,770 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $26,684 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $32,500 (March 31, 2014 - $0), accrued interest of $1,845 (March 31, 2014 - $0), debt discount of $5,816 (March 31, 2014 - $0) and a derivative liability of $42,025 (March 31, 2014 - $0) was recorded.

LG Capital Note #1

On February 26, 2014, the Company executed an Unsecured Promissory Note to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $30,000, which accrues interest at an annual rate of 8% and has a maturity date of February 26, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $2,236 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $44,287 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $10,258 (nine months ended March 31, 2014 - $5,558) due to the change in value of the derivative liability during the period, and a debt discount of $30,000 (nine months ended March 31, 2014 - $11,808) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $30,000 (March 31, 2014 - $0), accrued interest of $3,051 (March 31, 2014 - $0), debt discount of $0 (March 31, 2014 - $18,192) and a derivative liability of $54,545 (March 31, 2014 - $23,162) was recorded.

LG Capital Note #3

On June 12, 2014, the Company arranged a debt swap under which two Direct Capital notes for $16,000 each was transferred to LG Capital Funding, LLC for a total amount of $32,000. The promissory note is unsecured, bears interest at 8% per annum and matures on June 12, 2015. The note also contains customary events of default.

During the nine months ended March 31, 2015, the Company accrued $390 (nine months ended March 31, 2014 - $188) in interest expense.

F-26

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $53,930 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $3,897 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $30,422 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 67,300 common shares upon the conversion of $27,000 of the principal balance and $496 in interest, and $42,073 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $0 (March 31, 2014 - $0), accrued interest of $0 (March 31, 2014 - $121), debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $0 (March 31, 2014 - $0) was recorded.

LG Capital Note #4

On June 12, 2014, the Company executed an Unsecured Promissory Note to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $40,000, which accrues interest at an annual rate of 8% and has a maturity date of June 12, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $2,402 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $71,475 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $1,252 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $25,942 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $40,000 (March 31, 2014 - $0), accrued interest of $2,560 (March 31, 2014 - $0), debt discount of $14,058 (March 31, 2014 - $0) and a derivative liability of $72,727 (March 31, 2014 - $0) was recorded.

LG Capital Note #5

On September 17, 2014, the Company arranged a debt swap under which Direct Capital notes were transferred to LG Capital Funding, LLC for a total amount of $54,000. The promissory note is unsecured, bears interest at 8% per annum and matures on September 17, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,030 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $68,325 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

F-27

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

During the nine months ended March 31, 2015, the Company recorded a loss of $68,655 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $54,000 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 922,479 common shares upon the conversion of $54,000 of the principal balance and $1,030 in interest, and $136,980 of the derivative liability was re-classified as additional paid in capital upon conversion.

LG Capital Note #6

On September 17, 2014, the Company executed an Unsecured Promissory Note to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $55,000, which accrues interest at an annual rate of 8% and has a maturity date of September 17, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $2,351 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $100,000 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $0 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $4,185 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $55,000 (March 31, 2014 - $0), accrued interest of $2,351 (March 31, 2014 - $0), debt discount of $50,815 (March 31, 2014 - $0) and a derivative liability of $100,000 (March 31, 2014 - $0) was recorded.

New Venture Attorneys Note #1

On April 1, 2014, the Company executed an Unsecured Promissory Note to New Venture Attorneys PC. Under the terms of the note, the Company has borrowed a total of $50,000, which accrues interest at an annual rate of 8% and has a maturity date of April 1, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $3,003 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $61,389 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

F-28

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

During the nine months ended March 31, 2015, the Company recorded a loss of $29,519 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $49,866 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $50,000 (March 31, 2014 - $0), accrued interest of $3,989 (March 31, 2014 - $0), debt discount of $134 (March 31, 2014 - $0) and a derivative liability of $90,909 (March 31, 2014 - $0) was recorded.

Prolific Group Note #1

On January 31, 2014, the Company arranged a debt swap under which a Direct Capital note for $25,000 was transferred to Prolific Group, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on January 31, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,483 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $85,981 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $7,525 (nine months ended March 31, 2014 – gain of $41,050) due to the change in value of the derivative liability during the period, and a debt discount of $11,781 (nine months ended March 31, 2014 - $5,718) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $20,000 (March 31, 2014 - $0), accrued interest of $2,018 (March 31, 2014 - $0), debt discount of $0 (March 31, 2014 - $19,282) and a derivative liability of $30,769 (March 31, 2014 - $26,637) was recorded.

Union Capital Note #1

On May 27, 2014, the Company arranged a debt swap under which a Direct Capital note for $48,516 was transferred to Union Capital, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on May 27, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $0 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $104,160 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $6,937 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $25,860 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 23,026 common shares upon the conversion of $28,516 of the principal balance and $178 in interest, and $43,353 of the derivative liability was re-classified as additional paid in capital upon conversion.

F-29

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Union Capital Note #2

On May 27, 2014, the Company executed an Unsecured Promissory Note to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $97,000, which accrues interest at an annual rate of 8% and has a maturity date of May 27, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $5,642 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $293,012 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $127,266 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $77,824 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 790,000 common shares upon the conversion of $15,595 of the principal balance and $863 in interest, and $30,071 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of March 31, 2015, principal balance of $81,405 (March 31, 2014 - $0), accrued interest of $5,502 (March 31, 2014 - $0), debt discount of $19,176 (March 31, 2014 - $0) and a derivative liability of $135,675 (March 31, 2014 - $0) was recorded.

Union Capital Note #3

On July 18, 2014, the Company arranged a debt swap under which three Direct Capital notes for $46,215, $16,000 and $16,000 was transferred to Union Capital, LLC for a total amount of $82,450. The promissory note is unsecured, bears interest at 8% per annum and matures on July 18, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,017 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $161,503 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $58,410 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $82,450 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 190,011 common shares upon the conversion of $82,450 of the principal balance and $1,017 in interest, and $103,094 of the derivative liability was re-classified as additional paid in capital upon conversion.

F-30

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

Union Capital Note #4

On July 18, 2014, the Company executed an Unsecured Promissory Note to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $110,000, which accrues interest at an annual rate of 8% and has a maturity date of July 18, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $6,172 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $182,842 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $491 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $44,837 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $110,000 (March 31, 2014 - $0), accrued interest of $6,172 (March 31, 2014 - $0), debt discount of $65,163 (March 31, 2014 - $0) and a derivative liability of $183,333 (March 31, 2014 - $0) was recorded.

Union Capital Note #5

On August 28, 2014, the Company executed an Unsecured Promissory Note to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $32,333, which accrues interest at an annual rate of 8% and has a maturity date of August 28, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,524 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $53,888 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a gain of $0 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $13,179 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

As of March 31, 2015, principal balance of $32,333 (March 31, 2014 - $0), accrued interest of $1,524 (March 31, 2014 - $0), debt discount of $19,154 (March 31, 2014 - $0) and a derivative liability of $53,888 (March 31, 2014 - $0) was recorded.

Union Capital Note #6

On October 22, 2014, the Company executed an Unsecured Promissory Note to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $32,333, which accrues interest at an annual rate of 8% and has a maturity date of October 22, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $1,290 (nine months ended March 31, 2014 - $0) in interest expense.

F-31

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 9 – Convertible Notes Payable (continued)

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.”

As of March 31, 2015, principal balance of $32,333 (March 31, 2014 - $0), accrued interest of $1,290 (March 31, 2014 - $0), debt discount of $0 (March 31, 2014 - $0) and a derivative liability of $0 (March 31, 2014 - $0) was recorded.

Union Capital Note #7

On October 22, 2014, the Company arranged a debt swap under which two Direct Capital notes were transferred to Union Capital, LLC in the amount of $32,000. Under the terms of the note, the Company has borrowed a total of $34,560 from Union Capital, LLC, which includes $2,560 in legal fees, accrues interest at an annual rate of 8% and has a maturity date of October 22, 2015. The note also contains customary events of default. During the nine months ended March 31, 2015, the Company accrued $304 (nine months ended March 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $45,103 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the nine months ended March 31, 2015, the Company recorded a loss of $26,524 (nine months ended March 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $34,560 (nine months ended March 31, 2014 - $0) was accreted to the statement of operations.

During the nine months ended March 31, 2015, the Company issued 522,725 common shares upon the conversion of $34,560 of the principal balance and $304 in interest, and $71,627 of the derivative liability was re-classified as additional paid in capital upon conversion.

Note 10 – Derivative Liabilities

The Company issued financial instruments in the form of convertible notes with embedded conversion features. The convertible notes payable have conversion rates which are indexed to the market value of the Company’s common stock price.

During the nine months ended March 31, 2015, $490,918 of principal and $8,758 in interest of convertible notes payable were converted into common stock of the Company.

These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP. The valuation assumptions are classified within Level 3 inputs.

F-32

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 10 – Derivative Liabilities (continued)

The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above:

	March 31,
	2015
Balance, beginning of year	$	420,092
Initial recognition of derivative liability		2,586,109
Conversion of derivative instruments to Common Stock		(870,289	)
Mark-to-Market adjustment to fair value		(427,972	)
Balance as of March 31, 2015	$	1,707,940

Note 11 – Common Stock

On August 26, 2011, the Company issued 70,000 shares at $0.002 per share pursuant to a Share Exchange Agreement with Cloud Date Corporation. An intangible asset of $140,000 was recorded.

From January 1, 2013 to March 31, 2013, the holders of a convertible notes converted a total of $39,000 of principal and interest into 6,246 shares of common stock.

On March 13, 2013, the Company issued 6,000 shares of common stock to settle debt of $60. These shares were then retired on April 23, 2013

On May 22, 2013, the Company issued 10,000 shares of common stock to settle debt of $100. Of the shares issued, 5 were retired on June 27, 2013.

From April 1, 2013 to June 30, 2013, the holders of convertible notes converted a total of $12,000 of principal into 3,636 shares of common stock.

From September 19, 2013 to September 26, 2013, partial conversion of 1 Convertible Preferred share was converted to 45,000 shares of common stock. This 1 Convertible Preferred share was cancelled and the remaining value of $165,000 was reinstated.

On May 12, 2014, the Company issued 30,000 shares to Rancho Capital Management.

From July 1, 2013 to June 30, 2014, the holders of convertible notes converted a total of $391,649 of principal and interest into 897,851 shares of common stock.

On December 15, 2014, pursuant to a consulting agreement, the Company issued 105,833 shares of common stock for $149,500 in fees owed to the President, Brett Everett.

From July 1, 2014 to March 31, 2015, the holders of convertible notes converted a total of $499,676 in principal and interest into 5,815,140 shares of common stock.

As of March 31, 2015 the Company has authorized 7,500,000,000 shares of common stock, of which 7,034,916 shares are issued and outstanding.

F-33

Microelectronics Technology Company

(A Development Stage Company)

Notes to Financial Statements as of March 31, 2015

(Expressed in US Dollars)

Note 12 –Preferred Stock

As of March 31, 2015, the Company has authorized 50,000,000 shares of preferred stock, of which 110,000 Shares of Series A Preferred, 1,000 shares of Series B Preferred, and 66 Shares Series C Preferred are issued and outstanding.

Note 13 – Income Taxes

The Company had no income tax expense during the reported period due to net operating losses. A reconciliation of income tax expense to the amount computed at the statutory rates is as follows:

	March 31,
	2015			2014
Operating profit (loss) for the nine month period ended March 31	$	(4,999,179	)	$	(806,187	)
Average statutory tax rate		34	%		34	%
Expected income tax provisions	$	(1,699,721	)	$	(274,104	)
Unrecognized tax gains (loses)		(1,699,721	)		(274,104	)
Income tax expense	$	-		$	-

The Company has net operating losses carried forward of approximately $7,990,548 for tax purposes which will expire in 2025 if not utilized beforehand.

Note 14 – Subsequent Events

None.

F-34

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors, which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital

	March 31, 2015 $			June 30, 2014 $
Current Assets		299,132			29,938
Current Liabilities		4,116,584			1,600,839
Working Capital (Deficit)		(3,817,452	)		(1,570,901	)

Cash Flows

	March 31, 2015 $			March 31, 2014 $
Cash Flows from (used in) Operating Activities		(1,748,669	)		(235,333	)
Cash Flows from (used in) Financing Activities		1,772,693			241,046
Cash Flows from (used in) Investing Activities		(6,291	)		(10,018	)
Net Increase (decrease) in Cash During Period		17,733			(4,305	)

Results for the Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014

Operating Revenues

The Company’s revenues for the three months ended March 31, 2015, and March 31, 2014, were $19,896 and $5,167, respectively.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2015, and March 31, 2014, were $1,180,325 and $118,342, respectively. General and administrative expenses consisted primarily of business development costs, consulting fees, management fees, rent and professional fees. The increase was primarily attributable to an increase in business development and consulting expenses.

Net Loss from Operations

The Company’s net loss from operations for the three months ended March 31, 2015, and March 31, 2014, was $1,160,429 and $113,175, respectively.

Other Income (Expense):

Other income (expense) for the three months ended March 31, 2015, and March 31, 2014, were $(1,545,407) and $(428,560). Other income (expense) consisted of gain on derivative valuation and interest expense. The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms.

Net Loss

Net loss for the three months ended March 31, 2015, was $2,705,837 compared with a net loss of $541,735 for the three months ended March 31, 2014. The increased loss is due to normal operating expenses but with minimal sales.

Results for the Nine months Ended March 31, 2015 Compared to the Nine months Ended March 31, 2014

Operating Revenues

The Company’s revenues for the nine months ended March 31, 2015, and March 31, 2014, were $84,526 and $13,534, respectively.

General and Administrative Expenses

General and administrative expenses for the nine months ended March 31, 2015, and March 31, 2014, were $1,927,008 and $276,297, respectively. General and administrative expenses consisted primarily of business development costs, consulting fees, management fees, rent and professional fees. The increase was primarily attributable to an increase in business development and consulting expenses.

Net Loss from Operations

The Company’s net loss from operations for the nine months ended March 31, 2015, and March 31, 2014, was $1,842,482 and $262,763, respectively.

Other Income (Expense):

Other income (expense) for the nine months ended March 31, 2015, and March 31, 2014, were $(3,156,697) and $(543,424). Other income (expense) consisted of gain on derivative valuation and interest expense. The gain on derivative valuation is directly attributable to the change in fair value of the derivative liability. Interest expense is primarily attributable the initial interest expense associated with the valuation of derivative instruments at issuance and the accretion of the convertible debentures over their respective terms.

Net Loss

Net loss for the nine months ended March 31, 2015, was $4,999,179 compared with a net loss of $806,187 for the nine months ended March 31, 2014. The increased loss is due to normal operating expenses but with minimal sales.

Results for the Period from April 11, 2011 (inception of development stage) Through March 31, 2015.

Operating Revenues

The Company’s revenues for the period from April 11, 2011 (inception of development stage) through March 31, 2015 were $136,759.

General and Administrative Expenses

General and administrative expenses for the period from April 11, 2011, (inception of development stage) through March 31, 2015, were $3,289,160. General and administrative expenses consist primarily of business development costs, consulting fees, management fees, and professional fees appropriate for being a public company.

Net Loss from Operations

The Company’s net loss from operations for the period from April 11, 2011, (inception of development stage) through March 31, 2015, was $3,152,401.

Other Income (Expense):

Other income (expenses) for the period from April 11, 2011 (inception of development stage) through March 31, 2015 was $(4,838,147).

Net Loss

Net loss for the period from April 11, 2011, (inception of development stage) through March 31, 2015, was $(7,990,548).

Liquidity and Capital Resources

As at March 31, 2015, the Company had a cash balance and asset total of $23,325 and $862,074 respectively, compared with $5,592 and $695,042 of cash and total assets, respectively, as at June 30, 2014. The increase in cash was due to normal operating activities and the increase in total assets was due to the purchase of inventory for operations and loans.

As at March 31, 2015, the Company had total liabilities of $4,116,584 compared with $1,600,839 as at June 30, 2014. The increase in total liabilities was attributed to the increase in accounts payable, notes payable and loans to related parties.

The overall working capital decreased from $1,570,901 deficit at June 30, 2014, to $3,817,452 deficit at March 31, 2015.

Cash Flow from Operating Activities

During the nine months ended March 31, 2015, cash used in operating activities was $(1,748,669) compared to $(235,333) for the nine months ended March 31, 2014. The increase in the amounts of cash used for operating activities was primarily due to interest expense, an increase in convertible debentures and the net loss.

Cash Flow from Investing Activities

During the nine months ended March 31, 2015, cash used in investing activities was $(6,291) compared to $(10,018) for the nine months ended March 31, 2014.

Cash Flow from Financing Activities

During the nine months ended March 31, 2015, cash provided by financing activity was $1,772,693 compared to $241,046 for the nine months ended March 31, 2014. The increase in cash provided by financing activities is due to increase in notes payable and loans from related parties.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2015, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on October 15, 2013, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

Changes in Internal Control over Financial Reporting

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

1. Quarterly Issuances:

From July 1, 2014 to March 31, 2015, the holders of convertible notes converted a total of $499,676 of principal and interest into 5,815,140 shares of our common stock.

On December 15, 2014, pursuant to a consulting agreement, the Company issued 105,833 shares of common stock for $149,500 in fees owed to the President, Brett Everett.

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.

2. Subsequent Issuances:

None.

Other than above, we did not issue any unregistered securities other than as previously disclosed.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit	Filing
3.1	Articles of Incorporation	Filed with the SEC on December 12, 2005 as part of our Registration of Securities on Form SB-2.
3.1(a)	Amended and Restated Articles of Incorporation, as of March 12, 2014.
3.1(b)	Amended and Restated Articles of Incorporation, as of May 27, 2014.
3.2	Bylaws	Filed with the SEC on December 12, 2005 as part of our Registration of Securities on Form SB-2.
10.01	Joint Venture Agreement by and between the Company and Beijing HuaJu Net Media Technology Co., Ltd., dated March 16, 2007	Filed with the SEC on March 19, 2007 as part of our Current Report on Form 8-K.
10.02	Share Purchase Agreement, by and between the Company and 722868 Ontario Ltd., dated October 5, 2009.	Filed with the SEC on October 9, 2009 as part of our Current Report on Form 8-K.
10.03	Share Exchange Agreement, by and among the Company and Cloud Data Corporation and its shareholders,, dated August 25, 2011	Filed with the SEC on August 30, 2011 as part of our Current Report on Form 8-K.
10.04	Debt Settlement Agreement, by and between the Company and Direct Capital Group, Inc., dated December 31, 2013	Filed with the SEC on February 14, 2013 as part of our Quarterly Report on Form 10-Q.
10.05	Unsecured Promissory note entered into between the Company and Asher Enterprises, dated July 17, 2012	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.06	Unsecured Promissory note entered into between the Company and Asher Enterprises, dated Dec 12, 2012	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.07	Unsecured Promissory note entered into between the Company and Direct Capital Group, Inc., dated Dec 31, 2012	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.08	Unsecured Promissory note entered into between the Company and Asher Enterprises, dated Jan 30, 2013	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.09	Unsecured Promissory note entered into between the Company and Asher Enterprises, dated April 12, 2013	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.1	Convertible Redeemable Note Agreement by and between the Company and Direct Capital Group, Inc., dated May 16, 2013.	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.11	Debt Settlement Agreement by and between the Company and Direct Capital Group, Inc., dated June 5, 2013.	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.12	Contract Agreement by and between Cloud Data Corporation our wholly-owned subsidiary and James Oakley, dated Feb 1, 2012	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.13	Contract Agreement by and between Cloud Data Corporation our wholly-owned subsidiary and Shone Anstey, dated Feb 1, 2012	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.14	Convertible Promissory Note entered into by and between the Company and Direct Capital dated July 31, 2013	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.15	Convertible Promissory Note entered into by and between the Company and Direct Capital dated August 31, 2013	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.

ITEM 6. EXHIBITS (continued)

10.16	Convertible Promissory Note entered into by and between the Company and Direct Capital dated September 30, 2013	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.17	Convertible Promissory Note entered into by and between the Company and Direct Capital dated September 30, 2013	Filed with the SEC on October 15, 2013 as part of our Annual Report on Form 10-K.
10.18	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.19	Convertible Promissory Note entered into by and between the Company and Direct Capital dated November 30, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.2	Convertible Promissory Note entered into by and between the Company and Direct Capital dated December 31, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.21	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 11, 2013	Filed with the SEC on February 19, 2014 as part of our Quarterly Report on Form 10-Q.
10.22	Asset/Intellectual Property Purchase Agreement entered into dated May 5, 2014, the effective date.	Filed with the SEC on May 8, 2014 as part of our Current Report on Form 8-K.
10.23	Convertible Promissory Note entered into by and between the Company and Classic Capital, Inc., dated May 5, 2014	Filed with the SEC on May 8, 2014 as part of our Current Report on Form 8-K.
10.24	Employment Agreement by and between the Company and Brett Everett, dated May 15, 2014.	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.25	Convertible Promissory Note entered into by and between the Company and Direct Capital dated January 31, 2014	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.26	Convertible Promissory Note entered into by and between the Company and Coventry Enterprises, LLC dated January 31, 2014	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.27	Convertible Promissory Note entered into by and between the Company and Prolific Group, LLC dated January 31, 2014	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.28	Convertible Promissory Note entered into by and between the Company and LG Capital Funding, LLC dated February 26, 2014.	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.29	Convertible Promissory Note entered into by and between the Company and Direct Capital dated February 28, 2014	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.3	Convertible Promissory Note entered into by and between the Company and Direct Capital dated March 31, 2014	Filed with the SEC on May 20, 2014 as part of our Quarterly Report on Form 10-Q.
10.31	Convertible Promissory Note entered into by and between the Company and New Venture Attorneys, PC dated April 1, 2014
10.32	Convertible Promissory Note entered into by and between the Company and KBM Worldwide, Inc. dated April 11, 2014
10.33	Convertible Promissory Note entered into by and between the Company and JMJ Financial dated April 16, 2014
10.34	Convertible Promissory Note entered into by and between the Company and Direct Capital dated April 30, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.

ITEM 6. EXHIBITS (continued)

10.35	Convertible Promissory Note entered into by and between the Company and Classic Capital, Inc., dated May 5, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.36	Convertible Promissory Note entered into by and between the Company and Adar Bays, LLC, dated May 19, 2014
10.37	Convertible Promissory Note entered into by and between the Company and Adar Bays, LLC, dated May 27, 2014
10.38	Convertible Promissory Note entered into by and between the Company and Union Capital, LLC, dated May 27, 2014
10.39	Convertible Promissory Note entered into by and between the Company and Union Capital, LLC, dated May 27, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.40	Convertible Promissory Note entered into by and between the Company and Gel Properties, LLC dated May 27, 2014
10.41	Convertible Promissory Note entered into by and between the Company and Direct Capital dated June 1, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.42	Convertible Promissory Note entered into by and between the Company and LG Capital Funding, LLC, dated June 12, 2014
10.43	Convertible Promissory Note entered into by and between the Company and LG Capital Funding, LLC, dated June 12, 2014
10.44	Convertible Promissory Note entered into by and between the Company and Direct Capital dated March 31, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.45	Convertible Promissory Note entered into by and between the Company and Classic Capital dated June 30, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.46	Convertible Promissory Note entered into by and between the Company and Asher Enterprises dated October 4, 2013
10.47	Convertible Promissory Note entered into by and between the Company and Direct Capital dated December 15, 2012
10.48	Convertible Promissory Note entered into by and between the Company and Gel Properties dated June 28, 2013
10.49	Convertible Promissory Note entered into by and between the Company and LG Capital dated February 26, 2014
10.50	Convertible Promissory Note entered into by and between the Company and Adar Bays, LLC dated May 19, 2014
10.51	Convertible Promissory Note entered into by and between the Company and Direct Capital dated June 1, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.52	Convertible Promissory Note entered into by and between the Company and Direct Capital dated July 1, 2014	Filed with the SEC on November 14, 2014 as part of our Quarterly Report on Form 10-Q.
10.53	Convertible Promissory Note entered into by and between the Company and KBM Worldwide dated July 15, 2014
10.54	Convertible Promissory Note entered into by and between the Company and Union Capital, LLC dated July 18, 2013
10.55	Convertible Promissory Note entered into by and between the Company and Union Capital, LLC dated July 18, 2013
10.56	Convertible Promissory Note entered into by and between the Company and LG Capital Funding, LLC, dated September 17, 2014
10.57	Convertible Promissory Note entered into by and between the Company and LG Capital Funding, LLC, dated September 17, 2014
10.58	Convertible Promissory Note entered into by and between the Company and Direct Capital dated July 31, 2014
10.59	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 1, 2014
10.60	Convertible Promissory Note entered into by and between the Company and Union Capital dated October 22, 2014
10.61	Convertible Promissory Note entered into by and between the Company and Union Capital dated October 22, 2014
10.62	Convertible Promissory Note entered into by and between the Company and 112BIT, LLC dated November 24, 2014
10.63	Convertible Promissory Note entered into by and between the Company and Aladdin Trading, LLC dated November 25, 2014
10.64	Convertible Promissory Note entered into by and between the Company and Coventry Enterprises, LLC dated November 25, 2014

ITEM 6. EXHIBITS (continued)

10.65	Consulting Agreement by and between the Company and Zoom Companies, dated October 1, 2014.	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.66	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 1, 2014	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.67	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 1, 2014	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.68	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 2, 2014	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.69	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 3, 2014	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.70	Convertible Promissory Note entered into by and between the Company and Direct Capital dated October 4, 2014	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.71	Convertible Promissory Note entered into by and between the Company and Direct Capital dated January 1, 2015	Filed with the SEC on February 17, 2015 as part of our Quarterly Report on Form 10-Q.
10.72	Convertible Promissory Note entered into by and between the Company and Direct Capital dated January 2, 2015	Filed herewith.
14.01	Code of Ethics	Filed with the SEC on August 11, 2006 as part of our Annual Report on Form 10-KSB.
16.01	Representative Letter from John Kinross-Kennedy	Filed with the SEC on February 14, 2013 as part of our Quarterly Report on Form 10-Q.
16.02	Representative Letter from Anton & Chia, LLP	Filed with the SEC on October 23, 2013 as part of our Current Report on Form 8-K.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Furnished herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Furnished herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Furnished herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Furnished herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Furnished herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Furnished herewith.

SIGNATURES

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

MICROELECTRONICS TECHNOLOGY COMPANY


Date: May 15, 2015	By:	/s/ Brett Everett
	Name:	BRETT EVERETT
	Title:	President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.


Date: May 15, 2015	By:	/s/ Brett Everett
	Name:	BRETT EVERETT
	Title:	Director

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Brett Everett, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Microelectronics Technology Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 15, 2015	By:	/s/ Brett Everett
	Name:	Brett Everett
	Title:	Principal Executive Officer

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14

I, Brett Everett, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Microelectronics Technology Company;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 15, 2015	By:	/s/ Brett Everett
	Name:	Brett Everett
	Title:	Principal Executive Officer

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Microelectronics Technology Company (the “Company”) on Form 10-Q for the period ending March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brett Everett, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


Date: May 15, 2015	By:	/s/ Brett Everett
	Name:	Brett Everett
	Title:	Principal Executive Officer and Principal Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $75,000.00 Issue Date: January 2, 2015

Debt Settlement Price: $75,000.00

CONVERTIBLE PROMISSORY NOTE

Microelectronics Technology Corporation, a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of Direct Capital Group Inc, a Nevada corporation, or registered assigns (the “Holder”) the sum of $75,000.00 together with any interest as set forth herein, on July 1, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note, which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into Common free trading stock, $0.00001par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of Las Vegas, Nevada are authorized or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Debt Settlement Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Debt Settlement Agreement”).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

The following terms shall apply to this Note:

ARTICLE I. CONVERSION RIGHTS

1.1 Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning on the date, which is one hundred eighty (180) days, following the dates listed for each invoice listed in Exhibit B. The Maturity Date for invoice in the amount of $75,000.00, July 1, 2015 (i) the Maturity Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., Las Vegas, Nevada time on such conversion date (the “Conversion Date”).

The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Borrower’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Borrower’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

1.2 Conversion Price.

(a) Calculation of Conversion Price. The conversion price (the“Conversion Price”) shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Conversion Price" shall mean par .00001 multiplied by the number of Common Stock converted at the time.

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to Purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

1.3 Authorized Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued pursuant to the Debt Settlement Agreement. The Borrower is required at all times to have authorized and reserved two times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the “Reserved Amount”).

The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 4(g) of the Debt Settlement Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

If, at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

1.4 Method of Conversion.

(a) Mechanics of Conversion. Subject to Section 1.1, this Note maybe converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., Las Vegas, Nevada time) and (B) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Debt Settlement Agreement.

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., Las Vegas, Nevada time, on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.

(g) Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section 1.4(g) are justified.

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Debt Settlement Agreement). Except as otherwise provided in the Debt Settlement Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIESREPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.1.6

Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder,the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter

deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to Purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of

Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

(e) Share Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to Common stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Share Purchase Rights, the aggregate Share Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Debt Settlement Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Debt Settlement Rights.

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7 Trading Market Limitations. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion of or otherwise pursuant to this Note and the other Notes issued pursuant to the Debt Settlement Agreement more than the maximum number of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Debt Settlement Agreement), subject to equitable adjustment from time to time

for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3 of the Note.

1.8 Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.

1.9 Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the Issue Date and ending on the date which is ninety (90) days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Optional Prepayment Amount”) equal to 140%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus

(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment

Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the date of the invoices listed on Exhibit B, which is ninety-one (91) days following the issue date and ending on the date of the invoices listed on Exhibit B, which is one hundred fifty (150) days following the issue date, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Second Optional Prepayment Amount”) equal to 145%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

Notwithstanding anything to the contrary contained in this Note, at any time during the period beginning on the date of the invoices listed on Exhibit B, which is one hundred fifty-one (151) days following the issue date and ending on the date which is one hundred eighty (180) days following the issue date of the invoices listed on Exhibit B, the Borrower shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Third Optional Prepayment Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the “Third Optional Prepayment Amount”) equal to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay the Third Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

ARTICLE II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

2.2 Restriction on Stock Repurchase. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.

2.4 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

2.5 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $500,000.

ARTICLE III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

3.2 Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.

3.3 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Debt Settlement Agreement and such breach continues for a period of ten (10) days after written notice thereof to the Borrower from the Holder.

3.4 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Debt Settlement Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Debt Settlement Agreement.

3.5 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of

twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.8 Delisting of Stock. The Borrower shall fail to maintain the listing of the Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

3.9 Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets, which are necessary to conduct its business (whether now or in the future).

3.13 Financial Statement Restatement.The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Debt Settlement Agreement.

3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

3.15 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Debt Settlement Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.16 Cross-Default. Notwithstanding anything to the contrary contained in thisNote or the other related or companion documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs,

including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

If the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

ARTICLE IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

Microelectronics Technology Company

1155 Camino Del Mar #172

Del Mar, CA 92014

If to the Holder:

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Debt Settlement Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement.

4.5 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts of Nevada or in the federal courts located in the state and county of Clark. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.

Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Debt Settlement Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Debt Settlement Agreement.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

4.10 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this January 2, 2015

	Microelectronics Technology Company
	By: _______________________________
	Brett Everett

EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Force Minerals Corporation, a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of January 2, 2015 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system(“DWAC Transfer”).

Name of DTC Prime Broker: Account Number:

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

Direct Capital Group Inc

1401 Camino Del Mar #202

Del Mar, CA 92014

Attention: Certificate Delivery

Date of Conversion: _____________

Applicable Conversion Price: $.00001

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Notes: ______________

Amount of Principal Balance Due remaining

Under the Note after this conversion: ______________

By:_____________________________

Title: President.

Date: ______________

Boards:

Quotes:

Boards

News

Market Data

Markets

Discover

Your Recent History