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Sale of Subsidiary
3 Months Ended
Sep. 30, 2013
Sale Of Subsidiary  
NOTE 5 - SALE OF SUBSIDIARY

On May 1, 2012, the Company entered into an asset purchase agreement with Respect Innovations, Inc. whereby the Company issued 100,000,000 common shares in return for patent pending technology. The Company later completed a patent search and found 10 different right-of-usage infringements that were not fully disclosed during the negotiations of the asset purchase agreement. The Company was forced to cancel the agreement with Respect Innovations, Inc. In the rescission agreement with Respect Innovations, Inc., the Company agreed to sell Respect American Glass (“RAG), a wholly owned subsidiary of the Company, to an officer of RAG for $100.

 

RAG was incorporated for the purpose of being a wholly owned subsidiary of the Company. Upon incorporation, RAG’s listed officers are the same as those of Respect Innovations, Inc. So when the asset purchase agreement with Respect Innovations was canceled, RAG was spun off to avoid conflict of interests.

 

In the rescission agreement with Respect Innovations, Inc., the Company agreed to sell RAG to a related officer for $100. On the date of the sale, October 8, 2012, RAG had $32,361 in assets, all of which was cash. RAG had $-0- in liabilities on the date of the sale which resulted in the Company recording a loss on the sale of subsidiary of $32,261. The Company sold RAG for less than the net book value in order to ensure a successful rescission agreement with Respect Innovations Inc. and, therefore, lower the risk of future litigation between the parties involved.