REVERSE ACQUISITION, PRINCIPLES OF CONSOLIDATION RELATED PARTY

12 Months Ended

Dec. 31, 2012

REVERSE ACQUISITION, PRINCIPLES OF CONSOLIDATION RELATED PARTY

REVERSE ACQUISITION, PRINCIPLES OF CONSOLIDATION RELATED PARTY

Note 7. Reverse Acquisition, Principles of Consolidation – Related Party

On June 3, 2011, the Company entered into and completed a reverse acquisition following a share exchange agreement (the “Share Exchange”) in which the Company, then known as Blackbox Semiconductor, a Nevada corporation (the accounting acquire for such transaction, “Vision Parent”) acquired 100% ownership of BlackBox Semiconductor Inc., a Delaware corporation (the accounting acquirer, “BlackBox Subsidiary”) and 14,000,000 shares of the of restricted common stock of Shrink Nanotechnologies, Inc. at a fair value of $729,960, which included a Discount Factor of 35% taken from the quoted market price at the effective date. In exchange, the Company issued to Shrink Nanotechnologies, Inc. 27,030,000 shares of common stock representing approximately 19.9% ownership in the Company and $75,000 which was originally to be paid by December 31, 2011.

In October of 2011, the Company agreed to settle the payable of $75,000 due in December 2011 to Shrink Nanotechnologies, Inc. as related to the Share Exchange for immediate payment of $12,500. This amount was paid on October 25, 2011, and there are no other amounts are due as related to this agreement and the Company recorded a gain of $62,500 related to debt settlement.

The Share Exchange was an interested party transaction as both the Company and Shrink Nanotechnologies, Inc. were indirectly controlled by an affiliate at that time, Noctua Fund Manager, LLC and with, Mark L. Baum, Esq., a former president and CEO and control person of both companies (“Baum”). These were the same principals that controlled Shrink Nanotechnologies, Inc. Luis Leung, our current CEO and Director, is also a director for Shrink Nanotechnologies, Inc. Given the percentage of ownership of Shrink Nanotechnologies, Inc. and our operating plan to liquidate the shares to raise additional funds, the investment should be accounted for as Available for sale.

The Company did not record a gain or loss related to the Share Exchange. This transaction was accounted for as a reverse acquisition. As a result, all financial information prior to June 3, 2011 is that of BlackBox Subsidiary. Following the merger, a reverse merger adjustment was made to reflect Vision Parent’s capital structure. All of the assets and liabilities acquired in the reverse acquisition were recorded at cost.

The consolidated balance sheets include the accounts of BlackBox Subsidiary and its wholly owned subsidiary, Vision Parent thereby reflecting the transactions related to the June 3, 2011 effective date of the Share Exchange. The consolidated statements of operations include the operations (which consisted mostly of research and development) of the predecessor entity, BlackBox Subsidiary from inception on October 28, 2010 and the Company from June 3, 2011, the effective date of the acquisition of the Vision Parent business. All significant intercompany accounts and transactions have been eliminated in consolidation.

The following is a condensed balance sheet disclosing the fair values of the Vision Dynamics Corporation Business assets and liabilities acquired.

Total assets	$	70,077
Total liabilities	$	343,658
Total stockholders’ equity		(273,581)
Total liabilities and stockholders’ deficit	$	70,077

		For the year ended		For the year ended
		December 31, 2011		December 31, 2010

Net Loss	$	(336,665)	$	(153,508)
Earnings per share	$	(0.00)	$	(0.00)

VISION DYNAMICS Corp 10-K/A