5 Capitalization

6 Months Ended

Dec. 31, 2013

Notes to Financial Statements

5 Capitalization

Note 5 — Capitalization

Preferred stock

The Company has authorized 1,000,000 shares of preferred stock, with a par value of $0.01 per share. As of June 30, 2013 and 2012, the Company has -0- shares of preferred stock issued and outstanding.

Common stock

The Company has authorized 60,000,000 shares of common stock, with a par value of $0.01 per share.

On July 11, 2013,, the Company and IACE Investments Two Inc., (“IACE”) entered into stock cancellation agreement, whereby IACE agreed to cancel 74,550,000 shares it holds of the Company’s common stock in exchange for the commitment by the Company to acquire a suitable merger candidate that will produce earnings after taxes of $4,000,000 within 18 months of the Company’s next share exchange or merger as disclosed in a public filing. In addition, the Company is required to file the audited financial statements of the acquired company within the required 71 days. If the Company fails in either of the two indicated requirements, it is required to issue 10,000,000 shares of its common stock to IACE.

On August 21, 2013 the Company issued 300,000 shares of restricted common stock for legal services valued at $75,000. The company issued on

On October 11, 2013, the Company issued 25,939,542 shares of its common stock into escrow with Davisson & Associates, PA. The shares are issued in reserve to be used in a future potential merger or acquisition. These shares are considered issued by not outstanding.

Stock Dividend

Effective on August 20, 2012, the Company completed two shares for every existing share stock dividend. Per Para 25-3 of "ASC 505-20 Stock Dividend and Stock Split", the issuance of additional shares on account of 2:1 stock dividend is at least 20% or 25% of the number of previously outstanding shares, hence transaction has been accounted for as a "Forward Stock Split of 2:1".

All references in the accompanying consolidated financial statements and notes thereto have been retroactively restated to reflect the August 20, 2012 stock dividend in substance as a stock split.

Stock Warrants

On the June 27, 2008, pursuant to the terms of the DIP Loan and Plan, the Company issued 3,000,000 shares and granted warrants to purchase 15,000,000 shares to Venture Fund I, Inc., for providing the DIP Loan.  The warrants are exercisable at $8.33 per share at any time on or prior to November 30, 2016.  The number of shares called or exercised at any given time and the purchase price per share shall be subject to adjustment from time to time by the Board of Directors of the Company.

In October 2012, the Company's Board of Directors adjusted the warrant's exercise price to $0.001 per share and the holders of the warrants exercised their rights to acquire the 15,000,000 shares for an aggregate price of $5,000.

The warrant activity for the year ended June 30, 2013 is as follows:

	Warrants Outstanding			Weighted Average Exercise Price
Outstanding at June 30, 2012		15,000,000		$	8.33
Issued		-			-
Exercised		(15,000,000	)		(0.001	)
Expired or canceled		-			-
Outstanding at June 30, 2013		-		$	-

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