Related Party Transactions with Multichip Assembly, Inc. (MAI)

12 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 5 - Related Party Transactions with Multichip Assembly, Inc. (MAI)

Acquisition of Multichip Assembly, Inc. Assets

In connection with the purchase of the MAI inventory on March 1, 2013, the Company acquired inventory valued at $250,000 and assumed a convertible note payable to an initial minority shareholder of the Company totaling $250,000. Inventory was recorded at the value of the note. The convertible note payable bore an interest rate of 8%, matures on December 31, 2014, and converts into shares of common stock at a rate of $0.01 at the option of the lender. On March 21, 2013, the note payable was converted to 2,500,000 shares of restricted common stock. Since the fair market value of the Company’s common stock was not readily determinable, there was no gain or loss recognized on the conversion.

Donation of property and equipment

MAI contributed equipment of $12,500 to the Company. The amount is recorded as an increase in additional paid-in capital on the statement of shareholders’ equity.