Mucinno Holding Inc. (MCNO)

[cayaboxing]

I think you might be right on this! Below is what was said on CTLE's latest 10-Q report:

LIQUIDITY AND CAPITAL RESOURCES


As of September 30, 2013, our current assets were $6,798 and our current liabilities were $21,990,042, which resulted in a working capital deficit of $21,983,244. As of September 30, 2013, current assets were comprised of $6,798 in cash. As of September 30, 2013, current liabilities were comprised of: (i) $2,568 in accounts payable; (ii) $916,000 in convertible notes payable; and (iii) $21,071,474 in derivative liability. See " -- Material Commitments".

As of September 30, 2013, our total assets were $6,798 comprised of current assets. The decrease in total assets during the three month period ended September 30, 2013 from fiscal year ended June 30, 2013 was primarily due to a decrease in cash.

As of September 30, 2013, our total liabilities were $21,990,042 comprised entirely of current liabilities. The increase in liabilities during the three month period ended September 30, 2013 from fiscal year ended June 30, 2013 was primarily due to the increase in the derivative liability of $11,623,033.

Stockholders’ deficit increased from ($10,194,010) as of June 30, 2013 to ($21,983,244) as of September 30, 2013.


Cash Flows from Operating Activities


We have not generated positive cash flows from operating activities. For the three month period ended September 30, 2013, net cash flows used in operating activities was ($171,398) compared to ($-0-) for the three month period ended September 30, 2012. Net cash flows used in operating activities consisted primarily of a net loss of $11,789,234 (2012: ($10,092), which was adjusted by $11,623,033 (2012: $-0-) of derivative interest calculated from the outstanding convertible notes. Net cash flows used in operating activities was further changed by ($5,197) (2012: $-0-) of accounts payable and accrued expenses and $-0- (2012: $10,092) in related party payables.


Cash Flows from Investing Activities


For the three month period ended September 30, 2013 and September 30, 2012, net cash flows used in investing activities was $0.


Cash Flows from Financing Activities


We have financed our operations primarily from debt or the issuance of equity instruments. For the three month period ended September 30, 2013, net cash flows provided from financing activities was $150,000 compared to $0 for the three month period ended September 30, 2012. Cash flows from financing activities for the three month period ended September 30, 2013 consisted of $150,000 in proceeds from convertible notes payable.


PLAN OF OPERATION AND FUNDING


We expect that future working capital requirements will to be funded through a combination of our existing funds, debt and equity, and potential generation of revenues. Our working capital requirements are expected to increase in line with the growth of our business.

Our principal demands for liquidity are to increase research and development, capacity for developing products, inventory purchase, potential sales distribution, and general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to the purchase of equipment and/or inventory, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. We may finance expenses with further issuances of securities and debt issuances. Any additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.



8
--------------------------------------------------------------------------------



MATERIAL COMMITMENTS


Convertible Note Payable


On December 30, 2012, the Company entered into a convertible promissory note with Globe Financial Corp. for $201,000 bearing no interest and convertible at a 50% discount to market. The note is payable on demand. Since the conversion rate is discounted to market, the Company calculated a derivative liability of $2,455,751 at June 30, 2013 using the Black Scholes Model, plus for the three months ended September 30, 2013 an additional $2,870,684.

On December 31, 2012, the Company entered into a convertible promissory note with Globe Financial Corp. for $90,000 bearing no interest and convertible at a 50% discount to market. The note is payable on demand. Since the conversion rate is discounted to market, the Company calculated a derivative liability of $1,175,578 at June 30, 2013 using the Black Scholes Model and recorded an additional $1,374,256 for the three months ended September 30, 2013.

On January 5, 2013, the Company entered into a convertible promissory note with Asus Global Holdings Inc. for $475,000 bearing no interest and convertible at a 50% discount to market. The note is payable on demand. Since the conversion rate is discounted to market, the Company calculated a derivative liability of $5,817,112 at June 30, 2013 using the Black Scholes Model and recorded an additional $6,800,150 for the three months ended September 30, 2013.

In the three months ended September 30, 2013 the Company entered into a new convertible note agreement with Asus Global Holdings for $150,000 with the same terms as previously noted. The Company recorded a derivative liability of $577,943 using the Black Scholes Model.

At September 30, 2013, the balance due against these four convertible notes was $916,000. In connection with the issuance of these convertible notes the Company recorded a derivative liability of $21,071,474 as of September 30, 2013.


PURCHASE OF SIGNIFICANT EQUIPMENT


We do not intend to purchase any significant equipment during the next twelve months.


OFF-BALANCE SHEET ARRANGEMENTS


As of the date of this Quarterly Report, we do not have any 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 investors.


GOING CONCERN


The independent auditors' report accompanying our June 30, 2013 and June 30, 2012 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations, have a working capital deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about our ability to continue as a going concern.


reference: http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001477932%2D13%2D005488%2Etxt&FilePath=%5C2013%5C11%5C14%5C&CoName=NANO+LABS+CORP%2E&FormType=10%2DQ&RcvdDate=11%2F14%2F2013&pdf=