UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2019
or
¨ 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: 000-55927
SecureTech Innovations, Inc.
(Exact name of registrant as specified in its charter)
Wyoming (State or other jurisdiction of incorporation or organization) | 82-0972782 (I.R.S. Employer Identification Number) |
2355 Highway 36 West, Suite 400, Roseville, MN 55113
(Address of principal executive offices)
Tel: (651) 317-8990
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or Section 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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations 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 x No ¨
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. (Check one):
Large Accelerated Filer ¨ Accelerated Filer ¨
Non-Accelerated Filer ¨ (Do not check if a smaller reporting company) Smaller Reporting Company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ¨ No x
The number of shares outstanding of the Registrant's common stock, $0.001 par value, as of July 19, 2019, was 170,003,000.
TABLE OF CONTENTS
Item |
| Page | ||
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PART I – FINANCIAL INFORMATION |
| 4 | ||
| Item 1 | Financial Statements |
| 4 |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 13 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk |
| 22 |
| Item 4 | Controls and Procedures |
| 22 |
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PART II – OTHER INFORMATION |
| 23 | ||
| Item 1 | Legal Proceedings |
| 23 |
| Item 1A | Risk Factors |
| 23 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds |
| 23 |
| Item 3 | Defaults Upon Senior Securities |
| 23 |
| Item 4 | Mine Safety Disclosures |
| 23 |
| Item 5 | Other Information |
| 23 |
| Item 6 | Exhibits |
| 24 |
Signatures |
| 24 | ||
Forward-Looking Statements
Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Registrant to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Registrant’s plans and objectives are based, in part, on assumptions involving it continuing as a going concern and executing on its stated business plan and objectives. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Registrant. Although the Registrant believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Registrant or any other person that the objectives and plans of the Registrant will be achieved.
As used in this Quarterly Report, the terms "we," "us," "our," "SecureTech," “Registrant,” and “Issuer” mean SecureTech Innovations, Inc. unless the context clearly requires otherwise.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
SECURETECH INNOVATIONS, INC.
BALANCE SHEETS
ASSETS
|
| June 30, 2019 (unaudited) |
|
December 31, 2018 | |
Current assets: |
|
|
|
| |
| Cash and equivalents | $ | 171,016 | $ | 195,900 |
| Total current assets |
| 171,016 |
| 195,900 |
|
|
|
|
| |
Total assets: | $ | 171,016 | $ | 195,900 | |
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current liabilities: |
|
|
|
| |
| Accounts payable | $ | 120 |
| 100 |
| Total current liabilities |
| 120 |
| 100 |
|
|
|
|
|
|
| Total liabilities | $ | 120 | $ | 100 |
|
|
|
|
| |
Stockholders’ equity (deficit): |
|
|
|
| |
| Preferred stock, $0.001 par value, 50,000,000 shares authorized |
| - |
| - |
| Common stock, $0.001 par value, 500,000,000 shares authorized; 170,003,000 and 172,503,000 shares issued and outstanding, |
|
170,003 |
|
172,503 |
| Additional paid-in capital |
| 247,088 |
| 244,588 |
| Accumulated deficit |
| (246,195) |
| (221,291) |
|
|
|
|
|
|
| Total stockholders’ equity (deficit) | $ | 170,896 | $ | 195,800 |
|
|
|
|
| |
Total liabilities and stockholders’ equity (deficit) | $ | 171,016 | $ | 195,900 | |
The accompanying notes to the financial statements are an integral part of these statements.
SECURETECH INNOVATIONS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
|
| For the three months ended June 30, |
| For the six months ended June 30, | |||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 | |
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Expenses: |
|
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|
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| |
| General and administrative | $ | 4,693 | $ | 10,548 | $ | 7,203 | $ | 26,394 |
| Accounting fees |
| 1,400 |
| 2,100 |
| 4,700 |
| 5,900 |
| Consulting fees |
| 6,382 |
| 11,042 |
| 10,882 |
| 25,500 |
| Legal fees |
| 1,016 |
| 6,770 |
| 2,119 |
| 78,345 |
| Total expenses |
| 13,491 |
| 30,460 |
| 24,904 |
| 136,139 |
|
|
|
|
|
|
|
|
|
|
(Loss) from operations |
| (13,491) |
| (30,460) |
| (24,904) |
| (136,139) | |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
| - |
| - |
| - |
| - | |
|
|
|
|
|
|
|
|
|
|
Net (loss) | $ | (13,491) | $ | (30,460) | $ | (24,904) | $ | (136,139) | |
|
|
|
|
|
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|
|
|
|
(Loss) per common share, basic and diluted |
$ |
(0.00) |
$ |
(0.00) |
$ |
(0.00) |
$ |
(0.00) | |
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic and diluted |
|
170,003,000 |
|
190,003,000 |
|
170,928,414 |
|
189,531,694 | |
The accompanying notes to the financial statements are an integral part of these statements.
SECURETECH INNOVATIONS, INC.
STATEMENT OF STOCKHOLDERS’ EQUITY
For the period from December 31, 2017 to June 30, 2019
(unaudited)
|
|
| Additional |
|
|
| Common Stock | Paid In | Accumulated |
| |
| Shares | Amount | Capital | Deficit | Total |
Balance, December 31, 2017 | 183,048,000 | $183,048 | $25,393 | ($52,824) | $155,617 |
Issuance of common stock for services | 200,000 | 200 | 5,800 | - | 6,000 |
Issuance of common stock for cash | 6,755,000 | 6,755 | 195,895 | - | 202,650 |
Cancellation of common shares | (17,500,000) | (17,500) | 17,500 | - | - |
Net loss | - | - | - | (168,467) | (168,467) |
Balance, December 31, 2018 | 172,503,000 | $172,503 | $244,588 | ($221,291) | $195,800 |
Cancellation of common shares | (2,500,000) | (2,500) | 2,500 | - | - |
Net loss | - | - | - | (24,904) | (24,904) |
Balance, June 30, 2019 | 170,003,000 | $170,003 | $247,088 | ($246,195) | $170,896 |
The accompanying notes to the consolidated financial statements are an integral part of these statements.
6
SECURETECH INNOVATIONS, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
|
| For the six months ended June 30, | |||||
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2019 |
|
2018 | |||
Cash flows from operating activities: |
|
|
|
| |||
| Net (loss) | $ | (24,904) | $ | (136,139) | ||
| Adjustments to reconcile net (loss) to net cash used in operating activities: |
|
|
|
| ||
|
| Issuance of common shares for services |
| - |
| 6,000 | |
|
| Increase (decrease) in accounts payable |
| 20 |
| - | |
|
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|
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|
| |
| Net cash used in operating activities |
| (24,884) |
| (130,139) | ||
|
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| |
Cash flows from financing activities: |
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| |||
| Issuance of common stock for cash |
| - |
| 202,650 | ||
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| Net cash provided by financing activities |
| - |
| 202,650 | ||
|
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| |||
Net increase (decrease) in cash |
| (24,884) |
| 72,511 | |||
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Cash – beginning of period |
| 195,900 |
| 155,617 | |||
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Cash – end of period | $ | 171,016 | $ | 228,128 | |||
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Non-cash financing activities: |
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| |||
| Share cancellation | $ | 2,500 | $ | - | ||
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|
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| |||
The accompanying notes to the financial statements are an integral part of these statements.
7
SECURETECH INNOVATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 2019
(unaudited)
NOTE 1 – Summary of Significant Accounting Policies
Organization
SecureTech Innovations, Inc. (“Company” or “SecureTech”) was incorporated under the laws of the State of Wyoming on March 2, 2017 under the name SecureTech, Inc. The Company amended its Articles of Incorporation on December 20, 2017 to change its name to SecureTech Innovations, Inc.
SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies. Through a licensed patent SecureTech has developed its initial product, Top Kontrol, which we believe to be the only anti-theft and personal safety automobile device that can thwart a carjacking attempt without any action by the driver. Whereas our competitors’ products are engineered to flash lights and sound loud alarms when someone is tampering with a parked and unoccupied automobile, our Top Kontrol product is engineered to turn off the engine and completely disable the vehicle should someone other than the authorized driver attempt to drive the vehicle.
Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person. Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine. This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint. SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.
Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.
SecureTech has not initiated any commercial production runs with any contract manufacturer. All of the products we have manufactured to date have been prototype models for testing purposes only. SecureTech does not intend to initiate commercial production until around the end of third quarter of fiscal 2019.
Unaudited Interim Financial Information
The unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
The balance sheet as of December 31, 2018 has been derived from audited financial statements.
Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of results that may be expected for the year ending December 31, 2019. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018 filed with the Company’s Annual Report on Form 10-K with the Securities and Exchange Commission on February 19, 2019.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for financial information and in accordance with the Securities and Exchange Commission’s (“SEC”) Regulation S-X. They reflect all adjustments which are, in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results as of and for the fiscal period ended June 30, 2019.
8
Use of Estimates
The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of June 30, 2019, the Company had no cash equivalents.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level |
| Description |
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|
|
Level 1 |
| Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
| Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
| Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The estimated fair values of the Company’s financial instruments as of June 30, 2019 are as follows:
| Fair Value Measurement at June 30, 2019 Using: | ||||||||
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Description |
|
6/30/19 |
| Quoted Prices In Active Markets For Identical Assets (Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) | |
Assets |
|
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| |
| Cash and equivalents | $ | 171,016 | $ | 171,016 | $ | - | $ | - |
| $ | 171,016 | $ | 171,016 | $ | - | $ | - | |
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Liabilities |
|
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| |
| Accounts payable | $ | 120 | $ | 120 | $ | - | $ | - |
| $ | 120 | $ | 120 | $ | - | $ | - | |
9
The estimated fair values of the Company’s financial instruments as of December 31, 2018 are as follows:
| Fair Value Measurement at December 31, 2018 Using: | ||||||||
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Description |
|
12/31/18 |
| Quoted Prices In Active Markets For Identical Assets (Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) | |
Assets |
|
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| |
| Cash and equivalents | $ | 195,900 | $ | 195,900 | $ | - | $ | - |
| $ | 195,900 | $ | 195,900 | $ | - | $ | - | |
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Liabilities |
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| Accounts payable | $ | 100 | $ | 100 | $ | - | $ | - |
| $ | 100 | $ | 100 | $ | - | $ | - | |
Net Loss per Share Calculation
Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per shares is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the three and six months ended June 30, 2019.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
There was no impact on the Company’s financial statements as a result of adopting Topic 606 for three and six months ended June 30, 2019, or on prior periods.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fiscal Year
The Company elected December 31st for its fiscal year-end.
10
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.
The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. As of June 30, 2019, the adoption of the standard had no impact on the Company, as there were no leases in place longer than 12 months.
There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements during the fiscal period ended June 30, 2019, the Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since its inception. Further, as of June 30, 2019, the Company had an accumulated deficit of ($246,195). These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional sources of financing. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.
NOTE 3 – STOCKHOLDERS’ EQUITY
Preferred stock
The Company has authorized 50,000,000 shares of preferred stock, $0.001 par value. The Company’s Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms.
As of June 30, 2019, the Company had no classes and -0- shares of preferred stock issued and outstanding.
Common stock
The Company has authorized 500,000,000 shares of common stock, with a par value of $0.001 per share.
During the six months ended June 30, 2019, the Company mutually rescinded a consulting agreement and subsequently canceled an aggregate of 2,500,000 shares of its common stock.
As of June 30, 2019, the Company had 170,003,000 shares of common stock issued and outstanding.
11
NOTE 4 – RELATED PARTY FOUNDER’S SHARE ISSUANCES
On March 2, 2017, the Company issued an aggregate of 175,000,000 shares of its common stock, $0.001 par value, as Founder’s Shares with $-0- value.
Of these shares original Founder’s Shares 80,000,000 were issued to the Company’s officers, 75,000,000 to an entity controlled by one of the Company’s directors, and 20,000,000 to outside consultants who assisted with the Company’s formation and early organization.
NOTE 5 – CONTINGENCY/LEGAL
As of June 30, 2019, and during the preceding ten years, no director, person nominated to become a director or executive officer, or promoter of the Company has been involved in any legal proceeding that would require disclosure hereunder.
From time to time, the Company may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. However, litigation is subject to inherent uncertainties for which the outcome cannot be predicted. Any adverse result in these or other legal matters could arise and cause harm to the Company’s business. The Company currently is not party to any claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on the Company’s business.
NOTE 6 – SUBSEQUENT EVENTS
No other material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements.
[The space intentionally left blank]
12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our independent registered public accounting firm has issued a going concern opinion in their audit report dated February 19, 2019, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months.
To meet our need for cash we are continually exploring new sources of financing, including raising funds through a secondary public offering, a private placement of securities and/or loans. If we are unable to secure additional financing, we will either have to suspend operations until we do raise the cash or cease operations entirely.
The following discussion should be read in conjunction with our financial statements and the notes thereto and the other information included in this Quarterly Report as filed with the SEC on Form 10-Q.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us upon which to base an evaluation of our performance. We are an emerging growth business with limited operating history. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns, such as increases in marketing costs, increases in administration expenditures associated with daily operations, increases in accounting and audit fees, and increases in legal fees related to filings and regulatory compliance.
As of June 30, 2019, we had incurred ($246,195) in losses since our inception on March 2, 2017. We have not achieved profitability and expect to continue to incur net losses throughout the fiscal year ending December 31, 2019, and potentially into subsequent fiscal periods. We expect to incur significant operating expenses and, as a result, will need to generate significant revenues to achieve profitability, which may never occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability on an ongoing basis which could cause us to go out of business.
To become profitable and competitive, we have to successfully sell our current product, Top Kontrol, and continue to innovate and develop new similar personal and automobile security and safety devices and technologies that will be accepted by the marketplace. We anticipate relying on equity sales of our common stock in order to continue to fund our business operations until we can generate sufficient revenues to cover our operating expenses, which may never happen. Issuances of additional shares will result in dilution to our then existing stockholders. There is no assurance that we will be able to make any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities. We may also rely on loans from our management or other significant shareholders. However, there are no assurances that management or any of our significant shareholders will provide us with any additional funds in the future.
We are continually exploring new sources of financing to meet our need for additional cash, including raising funds through sales of our equity securities and loans. We cannot provide any assurances that our efforts to secure additional financing will be successful. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Further, future equity financing could result in additional and substantial dilution to existing shareholders.
Plan of Operations
SecureTech was incorporated under the laws of the State of Wyoming on March 2, 2017 under the name SecureTech, Inc. We amended our Articles of Incorporation on December 20, 2017 to change our name to SecureTech Innovations, Inc.
SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies. Through a licensed patent SecureTech has developed its initial product, Top Kontrol, which we believe to be the only anti-theft and personal safety automobile device that can thwart a carjacking attempt without any action by driver. Whereas our competitors’ products are engineered to flash lights and sound loud alarms when someone is tampering with a parked and unoccupied automobile, our Top Kontrol product is engineered to turn off the engine and completely disable the vehicle should someone other than the authorized driver attempt to drive the vehicle.
Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person. Regardless of whether someone tries to steal your vehicle while it is innocently idling
13
unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine. This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint. SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.
Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.
SecureTech has not initiated any commercial production runs with any contract manufacturer. All of the products we have manufactured to date have been prototype models for testing purposes only. We do not intend to initiate commercial production until the second half of fiscal 2019.
Top Kontrol Product
SecureTech’s first anti-theft and automobile safety product is called Top Kontrol. Utilizing exclusively licensed patented technology created originally by our Founder, Kao Lee, SecureTech had developed a very competitively priced product that significantly outperforms all other known competing products currently on the market.
Key Advantages of the Top Kontrol Product:
• |
| Anti-theft circuits actively prevent automobile theft and/or carjacking |
• |
| Automatic secure feature prevents car from being stolen while keys are in ignition and/or engine is idling |
• |
| Active and passive prevention of carjacking |
• |
| Does not interfere with other systems in the vehicle |
• |
| Works with all makes and models of cars, trucks and motorcycles |
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| Manual engine kill switch |
• |
| Key based system to prevent hijacking of wirelessly transmitted security codes |
• |
| No 24/7 power feeding which prevents short-circuiting the system with a power surge, a common method thieves use to disable our competitors’ systems |
Unlike our competitors’ products which are designed to primarily protect the automobile from unattended theft, we’ve developed Top Kontrol to put driver and passenger safety first while still protecting the automobile from theft, even when the engine is running. We believe Top Kontrol is the only anti-theft and personal safety automobile device able to thwart a carjacking attempt without any action by the driver.
Through its advanced design and use of the licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker. Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine. This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.
Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.
Made in USA
SecureTech exclusively uses US contract manufacturers and labor to manufacture and assemble its products. SecureTech does not have any long-term or exclusive arrangements with any single contract manufacturer and is free to change or negotiate with new contract manufacturers at its sole discretion. This allows SecureTech to scale production levels as it deems appropriate.
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All of SecureTech’s products proudly carry the “Made in USA” designation.
SecureTech has not initiated any commercial production runs with any contract manufacturer. All of the products we have manufactured to date have been prototype models for testing purposes only. We do not intend to initiate commercial production until the second half of fiscal 2019.
Competition
SecureTech faces formidable competition in every aspect of our business. The success or failure of our business will depend largely upon the ability of our management to develop competitive products and properly market them to attract a sufficient number of new customers which will allow us to generate sufficient revenues to become profitable.
SecureTech will be competing against better established competitors with substantially greater financial resources and a longer history of operations. Our competitors’ resources and market presence may provide them with advantages in marketing, purchasing and negotiating leverage. Some of our better known competitors include Viper (www.viper.com) and LoJack Corporation (www.lojack.com). Below is a table providing a comparison overview of these competitors’ product offerings:
FEATURES | VIPER (1) | LOJACK (2) | TOP KONTROL |
Electronic/engine Immobilizers |
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Kill Switch |
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Light and Siren |
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Electronic Tracking System |
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Carjacking Security Features |
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Automatic Secured for preventing carjacking |
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Automatic Secured features to prevent theft even if keys are left in the ignition and/or engine idling |
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Key based system to prevent interception of wirelessly transmitted security codes |
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Does not require a 24/7 power feed |
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MSRP | $499+ | $695+ | $449 |
(1)Viper 5806 car alarm model.
(2)LoJack® Stolen Vehicle Recovery System.
In addition to the competitors listed above, we will be competing with other lesser known competitors as well as competitors presently not known to us or, possibly, not even formed yet.
We believe that our industry is large enough that we will be able to compete successfully against our competitors with our existing and future products. However, it is important to note that the underlying product technology is always evolving and expanding with new competitors continuously innovating better products that could eventually outperform our then offered products or, worse, possibly render them obsolete.
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Sales and Marketing
SecureTech intends to use a two-pronged approach to marketing for our current and future products to prospective customers, including direct marketing efforts and authorized dealer sales.
Direct Marketing
SecureTech intends to build brand and product awareness through traditional marketing avenues, including:
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| Traditional paid advertising (e.g. periodical and trade publications, television, and radio) |
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• |
| Online and Social Media |
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| Pay-Per-Click Internet Advertising |
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| Free Media Exposure (e.g. free theft prevention and safety courses and videos) |
Authorized Dealer/Licensed Installer Sales
SecureTech intends to internally develop a sales team of representatives that will sell SecureTech’s products to car dealerships (new and used), car audio stores, body shops, and other similar venues. SecureTech will augment its own sales force with commission based independent sales representatives, both domestically and internationally.
Government Regulation
SecureTech will be subject to domestic and international laws and regulations that relate directly or indirectly to its products and operations. These laws and regulations include common business practices, tax rules and securities regulations pertaining to the operation of its business, and product warranties and safety requirements. SecureTech believes that the effects of existing or probable governmental regulations will be additional responsibilities of the management of SecureTech to ensure that it remains in compliance with all applicable regulations as they apply to the SecureTech’s products as well as ensuring that SecureTech does not infringe on any proprietary rights of others with respect to its products. SecureTech will also need to maintain accurate financial records in order to remain compliant with securities regulations as well as any corporate tax liability it incurs.
Compliance with Environmental Laws
We have not incurred and do not anticipate incurring any expenses associated with environmental laws.
Research and Development Expenditures
We have not incurred any research or development expenditures since our inception on March 2, 2017.
Patents and Trademarks
We have exclusively licensed United States Patent No. 8,436,721 from Shongkawh, LLC, a related party. Pursuant to the terms of the licensing agreement, SecureTech will pay Shongkawh two-percent (2%) of all gross sales generated on all products sold incorporating the technology covered by this patent.
On May 4, 2018, SecureTech filed two applications with the US Patent & Trademark Office (“USPTO”) to register the trademarks SECURETECH INNOVATIONS and TOP KONTROL. These applications were assigned trademark serial numbers 87908006 and 87908032, respectively.
On December 18, 2018, SecureTech received a Notice of Allowance from the USPTO for the trademark TOP KONTROL and on June 25, 2019 SecureTech received a Notice of Allowance for the trademark SECURETECH INNOVATIONS.
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Property and Equipment
Our principal executive offices are located at 2355 Highway 36 West, Suite 400, Roseville, MN 55113. We lease this space for $1,172 per month on a month-to-month basis for the time being.
We do not hold ownership or leasehold interest in any other property or equipment.
Executive Offices and Telephone Number
Our executive office and main telephone number is currently:
Executive OfficeTelephone and E-Mail Contact Information
2355 Highway 36 WestTel:(651) 317-8990
Suite 400E-Mail:info@securetechinnovations.com
Roseville, MN 55113Web:www.securetechinnovations.com
Jumpstart Our Business Startups Act
In April 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was enacted into law. The JOBS Act provides, among other things:
• |
| Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies; |
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|
• |
| Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934; |
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| Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings; |
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| Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and |
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| Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements. |
In general, under the JOBS Act a company is an emerging growth company if its initial public offering ("IPO") of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of:
(i)the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,
(ii)the completion of the fiscal year of the fifth anniversary of the company's IPO;
(iii)the company's issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or
(iv)the company becoming a "larger accelerated filer" as defined under the Securities Exchange Act of 1934.
The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact SecureTech are discussed below.
Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:
(i)audited financial statements required for only two fiscal years;
(ii)selected financial data required for only the fiscal years that were audited; and
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(iii)executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)
However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. SecureTech is a smaller reporting company. Currently, a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.
The JOBS Act also exempts the company's independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board ("PCAOB") after the date of the JOBS Act's enactment, except as otherwise required by SEC rule.
The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the company's accounting firm or for a supplemental auditor report about the audit.
Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the company's independent registered public accounting firm to file a report on the company's internal control over financial reporting, although management of the company is still required to file its report on the adequacy of the company's internal control over financial reporting.
Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.
Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The JOBS Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. Also, the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of research reports on the emerging growth company IPO.
Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Securities Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.
Election to Opt Out of Transition Period. Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.
The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. SecureTech has elected not to opt out of the transition period pursuant to Section 107(b).
Results of Operations
Three Months Ended June 30, 2019 and 2018
Revenues. We did not generate any revenue during the three months ended June 30, 2019 and 2018.
Operating Expenses. Our total operating expenses for three months ended June 30, 2019 were $13,491 compared to $30,460 for the three months ended June 30, 2018, which represents a decrease of ($16,965), or (55.7%). The decrease in operating expenses is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
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Loss From Operations. We generated an operating loss of ($13,491) from operations during the three months ended June 30, 2019 compared to an operating loss of ($30,460) during the three months ended June 30, 2018, which represents a decrease of ($16,965), or (55.7%). The decrease in operating loss from operations is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
Net Loss. We realized a net loss of ($13,491) from operations during the three months ended June 30, 2019 compared to a net loss of ($30,460) during the three months ended June 30, 2018, which represents a decrease of ($16,965), or (55.7%). The decrease in net loss from operations is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
Six Months Ended June 30, 2019 and 2018
Revenues. We did not generate any revenue during the six months ended June 30, 2019 and 2018.
Operating Expenses. Our total operating expenses for six months ended June 30, 2019 were $24,904 compared to $136,139 for the six months ended June 30, 2018, which represents a decrease of ($111,231), or (81.7%). The decrease in operating expenses is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
Loss From Operations. We generated an operating loss of ($24,904) from operations during the six months ended June 30, 2019 compared to an operating loss of ($136,139) during the six months ended June 30, 2018, which represents a decrease of ($111,231), or (81.7%). The decrease in operating loss from operations is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
Net Loss. We realized a net loss of ($24,904) from operations during the six months ended June 30, 2019 compared to a net loss of ($136,139) during the six months ended June 30, 2018, which represents a decrease of ($111,231), or (81.7%). The decrease in net loss from operations is largely the result of lower legal, accounting and outside consulting fees during the fiscal period.
Total Stockholders’ Equity. Our stockholders’ equity was $170,896 as of June 30, 2019.
Liquidity and Capital Resources
As of June 30, 2019, we had assets valued at $171,016, which was comprised of solely of cash.
As of June 30, 2019, we had liabilities of ($120) in accounts payable.
Although we believe we have sufficient cash on hand to bring our Top Kontrol product to market, we are continuing to explore additional sources of new financing. Without limiting our available options, future financings will most likely be through the sale of additional shares of our common stock. It is possible that we could also offer warrants, options and/or rights in conjunction with any future issuances of our common stock. However, we can give no assurance that financing will be available to us, and if available to us, in amounts or on terms acceptable to us. If we cannot secure adequate financing we may be forced to cease operations and you will lose your entire investment.
Going Concern Consideration
Our independent registered public accounting firm has issued a going concern opinion in their audit report dated February 19, 2019, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 19, 2019. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months.
Off –Balance Sheet Operations
As of June 30, 2019, we had no off-balance sheet activities or operations.
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Critical Accounting Policies
Use of Estimates
The accompanying financial statements of SecureTech have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, SecureTech considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of June 30, 2019 and December 31, 2018, SecureTech had no cash equivalents.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level |
| Description |
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|
Level 1 |
| Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
| Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
| Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The estimated fair values of the SecureTech’s financial instruments as of June 30, 2019 are as follows:
| Fair Value Measurement at June 30, 2019 Using: | ||||||||
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Description |
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6/30/19 |
| Quoted Prices In Active Markets For Identical Assets (Level 1) |
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Significant Other Observable Inputs (Level 2) |
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Significant Unobservable Inputs (Level 3) | |
Assets |
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| Cash and equivalents | $ | 171,016 | $ | 171,016 | $ | - | $ | - |
| $ | 171,016 | $ | 171,016 | $ | - | $ | - | |
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Liabilities |
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| Accounts payable | $ | 120 | $ | 120 | $ | - | $ | - |
| $ | 120 | $ | 120 | $ | - | $ | - | |
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The estimated fair values of the SecureTech’s financial instruments as of December 31, 2018 are as follows:
| Fair Value Measurement at December 31, 2018 Using: | ||||||||
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Description |
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12/31/18 |
| Quoted Prices In Active Markets For Identical Assets (Level 1) |
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Significant Other Observable Inputs (Level 2) |
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Significant Unobservable Inputs (Level 3) | |
Assets |
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| Cash and equivalents | $ | 195,900 | $ | 195,900 | $ | - | $ | - |
| $ | 195,900 | $ | 195,900 | $ | - | $ | - | |
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Liabilities |
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| Accounts payable | $ | 100 | $ | 100 | $ | - | $ | - |
| $ | 100 | $ | 100 | $ | - | $ | - | |
Net Loss per Share Calculation
Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per shares is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the three and six months ended June 30, 2019.
Revenue Recognition
SecureTech recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
Income Taxes
SecureTech accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
SecureTech maintains a valuation allowance with respect to deferred tax assets. SecureTech establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration SecureTech’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as SecureTech generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Election to Use Extended Transitional Period Under Jumpstart Our Business Startups Act (“JOBS Act”)
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
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Recent Accounting Pronouncements
There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on SecureTech’s financial position, results of operations or cash flows.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable since we are a smaller reporting company.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
For the period covered by this report we conducted an evaluation under the supervision and with the participation of our principal executive officer and principal financial officer we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act).
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Based on management’s assessment, we have concluded that, as of June 30, 2019, our disclosure controls and procedures were not effective in timely alerting management to the material information relating to us required to be included in our annual and interim filings with the SEC.
Management has concluded that our disclosure controls and procedures had the following material weaknesses:
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| We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency has not resulted in any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties; |
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| SecureTech lacks sufficient resources to perform the internal audit function and does not have an Audit Committee; |
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| We do not have an independent Board of Directors, nor do we have a board member designated as an independent financial expert to SecureTech. The Board of Directors is comprised of three (3) members; two of whom also serve as executive officers. As a result, there is a lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by SecureTech; and |
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| Documentation of all proper accounting procedures is not yet complete. |
These weaknesses have existed since SecureTech’s inception on March 2, 2017 and, as of June 30, 2019, have not been remedied.
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To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the following:
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| Considering the engagement of consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures; |
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| Hiring additional qualified financial personnel, including a Chief Financial Officer, on a full-time basis; |
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| Expanding our current board of directors to include additional independent individuals willing to perform directorial functions; and |
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| Increasing our workforce in preparation for exiting the development stage and commencing revenue producing operations. |
Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants.
Changes in Controls and Procedures
There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
Item 1. Legal Proceedings
During the past ten years no director, person nominated to become a director or executive officer, or promoter of SecureTech has been involved in any legal proceeding that would require disclosure hereunder.
From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. However, litigation is subject to inherent uncertainties for which the outcome cannot be predicted. Any adverse result in these or other legal matters could arise and cause harm to our business. We currently are not party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.
Item 1A. Risk Factors
Not applicable since we are a smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
Exhibit Number |
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Title of Document |
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Location |
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3.1 |
| Articles of Incorporation |
| Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018 |
3.2 |
| Bylaws |
| Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018 |
3.3 |
| Amendment to Articles of Incorporation dated December 20, 2017 |
| Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018 |
10.1 |
| Patent License Agreement between SecureTech, Inc. and Shongkawh, LLC dated March 2, 2017 |
| Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018 |
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.
SECURETECH INNOVATIONS, INC.
Dated: August July 19, 2019 | By: | /s/ Kao Lee |
|
| President, Chief Executive Officer, Principal Executive Officer and Director |
Dated: July 19, 2019 | By: | /s/ Anthony Vang |
|
| Treasurer, Secretary, Principal Financial Officer, Principal Accounting Officer and Director |
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