10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended November 30, 2017

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 333-146404

MICROCHANNEL TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	98-0539775
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1919 NW 19th Street, Suite 302
Fort Lauderdale, FL	33311
(Address of principal executive offices)	(Zip Code)

(954) 551-7701

(Registrant’s telephone number, including area code)

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  ¨    No  x

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 (Do not check if a smaller reporting company)	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act.)  Yes  ¨  No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 53,864,600 shares of common stock, par value $0.0001, were outstanding on , March 5, 2018.

MICROCHANNEL TECHNOLOGIES CORPORATION

FORM 10-Q

For the Period Ended November 30, 2017

Table of Contents

PART I  FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets	3
Statements of Operations	4
Statements of Cash Flows	5
Notes to Financial Statements	6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	9
Item 4.  Controls and Procedures	11
PART II  OTHER INFORMATION
Item 1. Legal Proceedings	12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3. Defaults Upon Senior Securities	12
Item 4. Mine Safety Disclosures	12
Item 5. Other Information	12
Item 6. Exhibits	12
Signatures	13
Certifications

2

PART I — FINANCIAL INFORMATION

Microchannel Technologies Corporation
BALANCE SHEETS
		(Unaudited)
		November 30,			August 31,
		2017			2017
ASSETS
Current Assets:
Cash	$	4,787		$	4,832
Total Current Assets		4,787			4,832
TOTAL ASSETS	$	4,787		$	4,832
LIABILITIES & SHAREHOLDER'S DEFICIT
Current Liabilities:
Accounts Payable	$	13,527		$	2,586
Accounts Payable - Related Party		8,000			—
Accrued Interest		23,052			21,307
Note Payable - Related Party		5,218			—
Note Payable to Shareholder		70,000			70,000
Total Current Liabilities		119,797			93,893
Total Liabilities		119,797			93,893
Stockholder's Deficit
Common Stock, par value $0.0001, 300,000,000 shares       Authorized,53,864,600 shares Issued and Outstanding at       November 30, 2017 and August 31, 2017		5,386			5,386
Additional Paid-In Capital		556,711			556,711
Accumulated Deficit		(677,107	)		(651,158	)
Total Stockholder's Deficit		(115,010	)		(89,061	)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT	$	4,787		$	4,832
The accompanying notes are an integral part of these unaudited financial statements

3

Microchannel Technologies Corporation
STATEMENTS OF OPERATIONS
(Unaudited)
	For the Three Months Ended
	November 30,
	2017			2016
Revenues:	$	—		$	—
Expenses:
Director and Officer fees		—			—
Professional fees		16,564			—
General and administrative expense		7,640			225
Total Operating Expenses		24,204			225
Operating Loss		(24,204	)		(225	)
Other  Expense
Interest expense		1,745			1,745
Net Loss	$	(25,949	)	$	(1,970	)
Basic & Diluted Loss per Common Share	$	(0.00	)	$	(0.00	)
Weighted Average Common Shares
Outstanding		53,864,600			53,864,600
The accompanying notes are an integral part of these unaudited financial statements

4

Microchannel Technologies Corporation
STATEMENT OF CASH FLOWS
(Unaudited)
	For the Three Months Ended
	November 30,
	2017			2016
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss	$	(25,949	)	$	(1,970	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes In:
Accounts Payable		10,941			180
Accounts Payable - Related Party		8,000			—
Accrued Interest		1,745			1,745
Net Cash Used in Operating Activities		(5,263	)		(45	)
CASH FLOWS FROM FINANCING
Proceeds from Note Payable - Related Party		5,218			—
Net Cash Provided by Financing Activities		5,218			—
Net (Decrease) Increase in Cash		(45	)		(45	)
Cash at Beginning of Period		4,832			5,012
Cash at End of Period	$	4,787		$	4,967
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	—		$	—
Franchise Taxes	$	—		$	—
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
None.
The accompanying notes are an integral part of these unaudited financial statements

5

MICROCHANNEL TECHNOLOGIES CORPORATION

NOTES TO FINANCIAL STATEMENTS

November 30, 2017

(Unaudited)

Note 1. Organization and Description of Business

MicroChannel Technologies Corporation (the “Company”) was formed as a wholly-owned subsidiary of New Energy Technologies, Inc. (“New Energy”). New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. The Company was incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to its existing name on April 4, 2005.

The Company is not currently engaged in any business operations. It is, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

Note 2. Going Concern Uncertainties

The Company has not generated any revenues, has an accumulated deficit of $677,107 as of November 30, 2017, and does not have positive cash flows from operating activities. The Company expects to incur additional losses as it continues to identify and develop new commercial opportunities. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements.

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to identify commercial opportunities and to obtain necessary funding from outside sources. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. Based on the Company’s current level of expenditures, management believes that cash on hand is adequate to fund operations for at least the next twelve months.

Note 3.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim financial statements have been prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended August 31, 2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted..

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from the estimates as additional information becomes known

Cash and Cash Equivalents

Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. On occasion, the Company has amounts deposited with financial institutions in excess of federally insured limits.

6

 Fair Value of Financial Instruments

The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying value of cash and cash equivalents and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of the previous years ended August 31, 2017 and August 31, 2016, the Company has not recorded any unrecognized tax benefits.

Segment Reporting

The Company’s business currently operates in one segment.

Net Loss per Share

The computation of basic net loss per common share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. See Note 4. Net Loss Per Share.

Recently Issued Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows.

Note 4. Net Loss Per Share

During the three months ended November 30, 2017 and November 30, 2016, the Company recorded a net loss. The Company does not have any potentially dilutive securities outstanding. Therefore, basic and diluted net loss per share is the same for those periods.

Note 5. Note Payable to Shareholder

On January 9, 2014, the Company issued a $70,000 note payable to a shareholder of the Company. The note payable bears interest at an annual rate of 7%. Principal and accrued interest on the note payable were due on January 9, 2016, with a default annual rate of 10% interest after that date. The outstanding balance of principal and accrued interest may be prepaid without penalty. During the three months ended November 30, 2017 and November 30, 2016, the Company recorded an interest expense of $1,745 for both periods respectively, related to the note payable. Accrued interest at November 30, 2017 related to the note payable was $23,052. At November 30, 2017, the original principal balance of $70,000 on the note payable remained outstanding. The note payable was not repaid on January 9, 2016 and is thus in default as of the date of this filing.

7

Note 6. Related Party

On October 10, 2017, the Company incurred a related party debt in the amount of $8,000 to an entity related to the legal custodian of the Company for professional fees . As of November 30, 2017, the balance of $8,000 remained outstanding.

On November 30, 2017, the Company issued a $5,218 note payable to an entity related to the legal custodian of the Company. The note payable bears interest at an annual rate of 10% and is convertible to common shares of the Company at $0.0001 per share. At November 30, 2017, the accrued interest was $0 and the original principal balance of $5,218 on the note payable remained outstanding.

Note 7. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at November 30, 2017 and August 31, 2017 are as follows:

	November 30, 2017			August 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	183,374			174,156
Capitalized research and development		603			998
Research and development credit carry forward		1,963			1,963
Total deferred tax assets		185,940			177,117
Less: valuation allowance		(185,940	)		(177,117	)
Net deferred tax asset	$	—		$	—

The net increase in the valuation allowance for deferred tax assets was $8,823 for the three months ended November 30, 2017. The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at November 30, 2017 available to offset future federal taxable income, if any, of $539,335, which will fully expire by the fiscal year ended August 31, 2035.  Accordingly, there is no current tax expense for the three months ended November 30, 2017 and 2016. In addition, the Company has research and development tax credit carry forwards of $1,963 at November 30, 2017, which are available to offset federal income taxes and fully expire by August 31, 2028.

The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The effects of state income taxes were insignificant for the three months ended November 30, 2017 and 2016.

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the three months ended November 30, 2017:

Income tax benefit at statutory rate	$	8,823
Change in valuation allowance		(8,823	)
	$	—

The fiscal years 2012 through 2017 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted. This law substantially amended the Internal Revenue Code, including reducing the U.S. corporate tax rates. Upon enactment, the Company’s deferred tax asset and related valuation allowance decreased by $70,344 to $115,596. As the deferred tax asset is fully allowed for, this change in rates had no impact on the Company’s financial position or results of operations. 

8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Except for the historical information presented in this document, the matters discussed in this Form 10-Q for the quarter ended November 30, 2017, contain forward-looking statements which involve assumptions and our future plans, strategies, and expectations. These statements are generally identified by the use of words such as “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 statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

Such forward-looking statements include statements regarding, among other things, (a) our potential profitability and cash flows, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

Except where the context otherwise requires and for purposes of this Form 10-Q only, “we,” “us,” “our,” “Company,” “our Company,” and “MicroChannel” refer to MicroChannel Technologies Corporation.

Overview

The following discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with our financial statements and the accompanying notes to the financial statements included in this Form 10-Q.

The MD&A is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions .

9

Background

We were formed as a wholly-owned subsidiary of New Energy Technologies, Inc. New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. We were incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to our existing name, MicroChannel Technologies Corporation, on April 4, 2005.

We are not currently engaged in any business operations. We are, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

Results of Operations

For the Three Months Ended November 30, 2017 and November 30, 2016

There were $16,564 in professional fees, in the three months ended November 30, 2017 and $0, in the three months ended November 30, 2016. This was due to an increase in accounting fees in 2017. General & Administrative expenses, which includes stock transfer fees and filing fees,were $7,640 and $225, for the three months ended November 30, 2017 and November 30, 2016, respectively.

The interest expense of $1,745 for the three months ended November 30, 2017 and November 30, 2016, respectively, is related to the note payable that the Company issued on January 9, 2014, in the amount of $70,000, to a shareholder of the Company. The note payable bears interest at an annual rate of 10% as it is in default and has cumulative interest due of $23,052 as of November 30, 2017. The outstanding balance of principal and accrued interest may be prepaid without penalty.

Net cash used in operating activities was $5,263 for the three months ended November 30, 2017 and $45 for the prior three months ended November 30, 2016. Based on our current level of expenditures, additional funding is required to cover our operations for at least the next twelve months. The company is in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

Liquidity and Capital Resources

As of the year ended August 31, 2017, we had an accumulated deficit of $651,158 and cash and cash equivalents of $4,832. As of the current quarter ended November 30, 2017, we had an accumulated deficit of $677,107 and cash and cash equivalents of $4,787. In January 2014, we received funding by issuing a $70,000 note payable, which is still outstanding at November 30, 2017. The note payable was due on January 9, 2016 and has not been repaid as of the date of this filing and is thus in default. In November 2017, the Company issued a $5,218 note payable to a related party of the Company, which is still outstanding at November 30, 2017.

Other Contractual Obligations

As of the three months ended November 30, 2017 and year ended August 31, 2017, we do not have any contractual obligations other the $70,000 note payable and $5,318 note payable and related accrued interest on both respectively. Neither of the notes have been repaid as of the date of this filing. The $70,000 note payable was due on January 9, 2016 and thus in default.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to the Company, we have not identified any standards that we believe merit further discussion. We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our financial position, results of operations, or cash flows.

We adopted Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements during the year ended August 31, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

10

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Garry McHenry, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, Garry McHenry, our Chief Executive Officer and Chief Financial Officer concluded that as of November 30, 2017, our disclosure controls and procedures were not effective such that the information required to be disclosed in our United States Securities and Exchange Commission (the “SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The material weakness identified relates to the lack of proper segregation of duties. The Company believes that the lack of proper segregation of duties is due to the Company’s limited resources.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with our evaluation of these controls as of the end of our last fiscal quarter as covered by this report on November 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls 

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error or all fraud and is not effective. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

11

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description of Exhibit
3.1	Articles of Incorporation, as amended. (1)
3.2	By Laws. (2)
31.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13(a)-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *
32.1	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 USC. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

*Filed herewith.

⁽¹⁾ Incorporated by reference to the exhibits filed as part of the report on Form 10-Q filed by MicroChannel Technologies Corporation on April 8, 2010.

⁽²⁾ Incorporated by reference to the exhibits filed as part of the report on Form SB-2 filed by MicroChannel Technologies Corporation on October 1, 2007.

12

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MicroChannel Technologies Corporation
	(Registrant)
March 2, 2018	By:	/s/ Garry McHenry
		Garry McHenry
		President, Chief Executive Officer,
		Chief Financial Officer, and Director

13

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Garry McHenry, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MicroChannel Technologies Corporation (the “registrant”);

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. As the registrant’s certifying officer I am 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 me 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 my 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 my 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. As the registrant's certifying officer I have disclosed, based on my 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:  March 2, 2018	/s/ Garry McHenry
	Garry McHenry
	Chief Executive Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MicroChannel Technologies Corporation (the “Company”) on Form 10-Q for the quarter ending November 30, 2017, as filed with the Securities and Exchange Commission on March 5, 2018 (the “Report”), I, Garry McHenry, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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 results of operations of the Company.

Date:  March 2, 2018	/s/ Garry McHenry
	Garry McHenry
	Chief Executive Officer and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Nov. 30, 2017	Mar. 05, 2018
Document And Entity Information
Entity Registrant Name	MICROCHANNEL TECHNOLOGIES CORP
Entity Central Index Key	0001413488
Document Type	10-Q
Document Period End Date	Nov. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Document Fiscal Period Focus	Q1
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		53,864,600
Document Fiscal Year Focus	2018

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Statement - BALANCE SHEETS - USD ($)	Nov. 30, 2017	Aug. 31, 2017
Current Assets:
Cash	$ 4,787	$ 4,832
Total Current Assets	4,787	4,832
TOTAL ASSETS	4,787	4,832
Current Liabilities:
Accounts Payable	13,527	2,586
Accounts Payable - Related Party	8,000
Accrued Interest	23,052	21,307
Note Payable - Related Party	5,218
Note Payable to Shareholder	70,000	70,000
Total Current Liabilities	119,797	93,893
Total Liabilities	119,797	93,893
Stockholder's Deficit
Common Stock, par value $0.0001, 300,000,000 shares Authorized, 53,864,600 shares Issued and Outstanding at November 30, 2017 and August 31, 2017	5,386	5,386
Additional Paid-In Capital	556,711	556,711
Accumulated Deficit	(677,107)	(651,158)
Total Stockholder's Deficit	(115,010)	(89,061)
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT	$ 4,787	$ 4,832

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Statement - BALANCE SHEETS (Parenthetical) - $ / shares	Nov. 30, 2017	Aug. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par or stated value per share (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	53,864,600	53,864,600
Common stock, shares outstanding	53,864,600	53,864,600

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STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
Income Statement [Abstract]
Revenues
Expenses:
Director and Officer fees
Professional fees	16,564
General and administrative expense	7,640	225
Total Operating Expenses	24,204	225
Operating Loss	(24,204)	(225)
Other Expense
Interest expense	1,745	1,745
Net Loss	$ (25,949)	$ (1,970)
Basic & Diluted Loss per Common Share	$ 0.00	$ 0.00
Weighted Average Common Shares Outstanding	53,864,600	53,864,600

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STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$ (25,949)	$ (1,970)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts Payable	10,941	180
Accounts Payable - Related Party	8,000
Accrued Interest	1,745	1,745
Net Cash Used in Operating Activities	(5,263)	(45)
CASH FLOWS FROM FINANCING
Proceeds from Note Payable - Related Party	5,218
Net Cash Provided by Financing Activities	5,218
Net (Decrease) Increase in Cash	(45)	(45)
Cash at Beginning of Period	4,832	5,012
Cash at End of Period	4,787	4,967
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for: Interest
Cash paid during the year for: Franchise Taxes

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Organization and Description of Business

3 Months Ended

Nov. 30, 2017

Accounting Policies [Abstract]

Organization and Description of Business

Note 1. Organization and Description of Business

MicroChannel Technologies Corporation (the “Company”) was formed as a wholly-owned subsidiary of New Energy Technologies, Inc. (“New Energy”). New Energy spun off its issued and outstanding shares to New Energy’s shareholders on December 18, 2007. The Company was incorporated under the name MultiChannel Technologies Corporation on February 28, 2005 in the State of Nevada, and changed to its existing name on April 4, 2005.

The Company is not currently engaged in any business operations. It is, however, in the process of attempting to identify, locate, and if warranted, acquire new commercial opportunities.

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Going Concern Uncertainties

3 Months Ended

Nov. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern Uncertainties

Note 2. Going Concern Uncertainties

The Company has not generated any revenues, has an accumulated deficit of $677,107 as of November 30, 2017, and does not have positive cash flows from operating activities. The Company expects to incur additional losses as it continues to identify and develop new commercial opportunities. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements.

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to identify commercial opportunities and to obtain necessary funding from outside sources. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. Based on the Company’s current level of expenditures, management believes that cash on hand is adequate to fund operations for at least the next twelve months.

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Summary of Significant Accounting Policies

3 Months Ended

Nov. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim financial statements have been prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended August 31, 2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from the estimates as additional information becomes known

Cash and Cash Equivalents

Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. On occasion, the Company has amounts deposited with financial institutions in excess of federally insured limits.

Fair Value of Financial Instruments

The Company measures certain financial assets and liabilities at fair value based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying value of cash and cash equivalents and accounts payable approximate their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of the previous years ended August 31, 2017 and August 31, 2016, the Company has not recorded any unrecognized tax benefits

Segment Reporting

The Company’s business currently operates in one segment.

Net Loss per Share

The computation of basic net loss per common share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. See Note 4. Net Loss Per Share.

Recently Issued Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows.

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Net Loss Per Share

3 Months Ended

Nov. 30, 2017

Earnings Per Share [Abstract]

Net Loss Per Share

Note 4. Net Loss Per Share

During the three months ended November 30, 2017 and November 30, 2016, the Company recorded a net loss. The Company does not have any potentially dilutive securities outstanding. Therefore, basic and diluted net loss per share is the same for those periods.

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Note Payable to Shareholder

3 Months Ended

Nov. 30, 2017

Debt Disclosure [Abstract]

Note Payable to Shareholder

Note 5. Note Payable to Shareholder

On January 9, 2014, the Company issued a $70,000 note payable to a shareholder of the Company. The note payable bears interest at an annual rate of 7%. Principal and accrued interest on the note payable were due on January 9, 2016, with a default annual rate of 10% interest after that date. The outstanding balance of principal and accrued interest may be prepaid without penalty. During the three months ended November 30, 2017 and November 30, 2016, the Company recorded an interest expense of $1,745 for both periods respectively, related to the note payable. Accrued interest at November 30, 2017 related to the note payable was $23,052. At November 30, 2017, the original principal balance of $70,000 on the note payable remained outstanding. The note payable was not repaid on January 9, 2016 and is thus in default as of the date of this filing.

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Related Party

3 Months Ended

Nov. 30, 2017

Related Party Transactions [Abstract]

Related Party

Note 6. Related Party

On October 10, 2017, the Company incurred a related party debt in the amount of $8,000 to an entity related to the legal custodian of the Company for professional fees . As of November 30, 2017, the balance of $8,000 remained outstanding.

On November 30, 2017, the Company issued a $5,218 note payable to an entity related to the legal custodian of the Company. The note payable bears interest at an annual rate of 10% and is convertible to common shares of the Company at $0.0001 per share. At November 30, 2017, the accrued interest was $0 and the original principal balance of $5,218 on the note payable remained outstanding.

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Income Taxes

3 Months Ended

Nov. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 7. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at November 30, 2017 and August 31, 2017 are as follows:

	November 30, 2017			August 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	183,374			174,156
Capitalized research and development		603			998
Research and development credit carry forward		1,963			1,963
Total deferred tax assets		185,940			177,117
Less: valuation allowance		(185,940	)		(177,117	)
Net deferred tax asset	$	—		$	—

The net increase in the valuation allowance for deferred tax assets was $8,823 for the three months ended November 30, 2017. The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at November 30, 2017 available to offset future federal taxable income, if any, of $539,335, which will fully expire by the fiscal year ended August 31, 2035.  Accordingly, there is no current tax expense for the three months ended November 30, 2017 and 2016. In addition, the Company has research and development tax credit carry forwards of $1,963 at November 30, 2017, which are available to offset federal income taxes and fully expire by August 31, 2028.

The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The effects of state income taxes were insignificant for the three months ended November 30, 2017 and 2016.

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the three months ended November 30, 2017:
Income tax benefit at statutory rate	$	8,823
Change in valuation allowance		(8,823	)
	$	—

The fiscal years 2012 through 2017 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted. This law substantially amended the Internal Revenue Code, including reducing the U.S. corporate tax rates. Upon enactment, the Company’s deferred tax asset and related valuation allowance decreased by $70,344 to $115,596. As the deferred tax asset is fully allowed for, this change in rates had no impact on the Company’s financial position or results of operations.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Nov. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying interim financial statements have been prepared in accordance with U.S. GAAP and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended August 31, 2017. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Estimates

Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from the estimates as additional information becomes known

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. On occasion, the Company has amounts deposited with financial institutions in excess of federally insured limits.

Income Taxes

Income Taxes

Deferred income tax assets and liabilities are determined based on the estimated future tax effects of net operating loss and credit carryforwards and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measured at the current enacted tax rates. The Company records an estimated valuation allowance on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As of the previous years ended August 31, 2017 and August 31, 2016, the Company has not recorded any unrecognized tax benefits.

Segment Reporting

Segment Reporting

The Company’s business currently operates in one segment.

Net Loss per Share

Net Loss per Share

The computation of basic net loss per common share is based on the weighted average number of shares that were outstanding during the year. The computation of diluted net loss per common share is based on the weighted average number of shares used in the basic net loss per share calculation plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. See Note 4. Net Loss Per Share.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations, or cash flows.

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Income Taxes (Tables)

3 Months Ended

Nov. 30, 2017

Income Tax Disclosure [Abstract]

Deferred income taxes

	November 30, 2017			August 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	183,374			174,156
Capitalized research and development		603			998
Research and development credit carry forward		1,963			1,963
Total deferred tax assets		185,940			177,117
Less: valuation allowance		(185,940	)		(177,117	)
Net deferred tax asset	$	—		$	—

Income Tax Benefit

The following is a reconciliation between expected income tax benefit and actual, using the applicable statutory income tax rate of 34% for the three months ended November 30, 2017:
Income tax benefit at statutory rate	$	8,823
Change in valuation allowance		(8,823	)
	$	—

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Going Concern Uncertainties (Details Narrative) - USD ($)	Nov. 30, 2017	Aug. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated Deficit	$ (677,107)	$ (651,158)

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Note Payable to Shareholder (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Aug. 31, 2017
Debt Disclosure [Abstract]
Note Payable	$ 70,000		$ 70,000
Interest Rate	7.00%
Default annual rate	10.00%
Interest Expense	$ 1,745	$ 1,745
Accrued interest	$ 23,052

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Related Party (Details Narrative) - USD ($)	3 Months Ended
	Nov. 30, 2017	Aug. 31, 2017
Related Party Transactions [Abstract]
Accounts Payable - Related Party	$ 8,000
Note Payable - Related Party	$ 5,218
Interest rate	10.00%
Convertible to common shares	$ 0.0001

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Income Taxes - Deferred income taxes (Details) - USD ($)	Nov. 30, 2017	Aug. 31, 2017
Deferred tax assets:
Net operating loss carryforward	$ 183,374	$ 174,156
Capitalized research and development	603	998
Research and development credit carry forward	1,963	1,963
Total deferred tax assets	185,940	177,117
Less: valuation allowance	(185,940)	(177,117)
Net deferred tax asset

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Income Taxes - Income Tax Benefit (Details)	3 Months Ended
	Nov. 30, 2017 USD ($)
Income Tax Disclosure [Abstract]
Income tax benefit at statutory rate	$ 8,823
Change in valuation allowance	(8,823)
Income tax benefit

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Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Nov. 30, 2017
Income Tax Disclosure [Abstract]
Net operating loss carry forward		$ 539,335
Tax credit carry forward		$ 1,963
Decrease in deferred tax asset	$ 70,344
Tax valuation	$ 115,596