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EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13A-14 AND RULE 15D-14(A), PROMULGATED UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. - BITCOIN SHOP INC.f10q0912ex31i_touchit.htm
EX-31.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13A-14 AND RULE 15D 14(A), PROMULGATED UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. - BITCOIN SHOP INC.f10q0912ex31ii_touchit.htm
EX-32.2 - CERTIFICATION - BITCOIN SHOP INC.f10q0912ex32ii_touchit.htm
EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (PRINCIPAL EXECUTIVE OFFICER). - BITCOIN SHOP INC.f10q0912ex32i_touchit.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
Form 10-Q
 
x   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2012
 
¨   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from _________ to _____________
 
Commission file number 333-151252
 
TouchIT Technologies, Inc.
 
 (Exact Name of Registrant as Specified in Its Charter)

Nevada
 
26-2477977
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
100 West Big Beaver Road, Suite 200, Troy, MI, 48084, USA
 (Address of Principal Executive Offices) (Zip Code)

248 680 6700 / 00 44 207 858 1045
(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  ¨
 
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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Larger 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 Rule 12b-2 of the Exchange Act).
 
Yes  ¨                      No x

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 74,189,419 shares of common stock outstanding as of November 9, 2012.

 
 

 
 
TOUCHIT TECHNOLOGIES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012

INDEX

PART I - FINANCIAL INFORMATION
   
       
Item 1. 
Financial Statements.
  2
       
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations.
  15
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
  24
       
Item 4.
Controls and Procedures.
  24
       
PART II - OTHER INFORMATION
   
       
Item 1.
Legal Proceedings.
  24
       
Item 6.
Exhibits.
  25
       
PART III – REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM
  25
     
Signature
  26

 
 

 
 
EXPLANATORY NOTE
 
TouchIT Technologies, Inc. (the “Company”) was incorporated in the State of Nevada as “Hotel Management Systems, Inc.”  On May 7, 2010, the Company entered into a share exchange agreement, with TouchIT Technologies Koll Sti (“TouchIT Tech KS”), TouchIT Education Koll Sti (“TouchIT Ed”)(“TouchIT Ed” and together with TouchIT Tech KS, “TouchIT”), and the stockholders of TouchIT Tech KS and Touch Ed.  Both TouchIT Tech KS and TouchIT Ed are corporations formed under the laws of Turkey and are based in Istanbul, Turkey. The closing of the transaction (the “Closing”) took place on May 7, 2010 (the “Closing Date”), all as disclosed on Form 8-K filed by the Company with the Securities and Exchange Commission on May 24, 2010.  See “Recent Developments”.  Subsequently, the Registrant amended its Articles of Incorporation to change its name to TouchIT Technologies, Inc., as disclosed on Form 8-K filed by the Registrant with the Securities and Exchange Commission on May 24, 2010.
 
Unless otherwise specified or required by context, as used in this Quarterly Report on Form 10-Q, the terms “we,” “our,” “us” and the “Company” refer collectively to (i) TouchIT Technologies, Inc., a Nevada corporation (“TouchIT”), (ii) TouchIT Tech KS and TouchIT Ed, both being wholly-owned subsidiaries of TouchIT.  In this Quarterly Report on Form 10-Q, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the shares of our common stock, $0.001 par value per share. All financial information presented is for the combined entity TouchIT, which comprises of TouchIT Tech KS and TouchIT Ed. They have not been consolidated and inter-company transactions, although not significant, do exist.
 
CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS
 
In addition to historical information, this Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  The forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in such forward looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  Readers are cautioned not to place undue reliance on these forward looking statements, which reflect management’s opinions only as of the date thereof. 
 
In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “proposed,” “intended” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other forward-looking information. Although we believe that the expectations reflected in the forward looking statements are reasonable, we cannot guarantee future results, growth rates, and levels of activity, performance or achievements. There may be events in the future that we are not able to accurately predict or control.

All forward-looking statements included in this Quarterly Report are based on information available to us on the date of this Quarterly Report.  Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this Quarterly Report.
 
 
 

 
 
TOUCHIT TECHNOLOGIES, INC
REVIEWED FINANCIAL STATEMENTS
(Unaudited)

September 30 2012
and
Comparative Periods
 
 
 

 
 
Edward Richardson Jr., CPA
15565 Northland Suite 508 West
Southfield, MI. 48075

To the Board of Directors
TouchIT Technologies, Inc.
100 West Beaver Road
Troy, MI.

I have reviewed the accompanying balance sheet of TouchIT Technologies, Inc. as of September 30, 2012, and the related statements of income and retained earnings and cash flows for the period then ended, and the accompanying supplementary information, which is presented only for supplementary analysis purposes, in accordance with the standards of the Public Company Accounting Oversight Board (United States). All information included is the representation of the Board of Directors of TouchIT Technologies.

A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with US Generally Accepted Accounting Principles (“US GAAP”) standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion.

Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with US GAAP standards.

My review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with US GAAP. The information in the accompanying statements and schedules is presented only for supplementary analysis purposes. Such information has been subject to the inquiry and analytical procedures applied in the review of the basic financial statements, and I am not aware of any material medications that should be made thereto.

/S/ Edward Richardson Jr., CPA

November 7, 2012
 
 
1

 
 
PART I - FINANCIAL INFORMATION
 
TOUCHIT TECHNOLOGIES INC
 
BALANCE SHEET
 
FOR THE PERIODS ENDED 30 SEPTEMBER 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010
 
(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)
 
                         
CURRENT ASSETS
 
30/09/12
   
31/12/11
   
30/09/11
   
31/12/10
 
                         
Cash and cash equivalents
    10,596       70,289       65,974       50,556  
Trade receivables, net
    216,796       240,867       -       705,225  
Due from related parties
    -       -       -       863,395  
Due from Shareholders
    -       -       -       50,585  
Inventories
    83,783       55,689       107,133       365,643  
Other current assets
    -       -       -       1,106  
                                 
Total current assets
    311,175       366,845       173,107       2,036,510  
                                 
NON CURRENT ASSETS
                               
                                 
Property, plant and equipment,net
    6,930       1,027       230       64,495  
Intangible assets, net
            -       -       25,145  
Rights
            -       -       -  
Other non current assets
    400,000       -       -       3,555  
                                 
Total non current assets
    406,930       1,027       230       93,195  
                                 
                                 
TOTAL ASSETS
    718,105       367,872       173,337       2,129,705  
                                 
                                 
CURRENT LIABILITIES
                               
Borrowings
    -       -       -       2,351  
Trade payables
   
314,372
      181,984       174,355       124,745  
Due to shareholders
    -       -       -       47,257  
Due to related parties
   
289,449
      265,318       265,318       1,145,992  
Other current liabilities
    81,788       27,390       -       73,233  
                                 
Total current liabilities
    685,609       474,692       439,673       1,393,578  
                                 
                                 
NON CURRENT LIABILITIES
                               
Borrowings
    -       250,000       104,917       -  
Employee termination benefits
    -       -       -       -  
Reserve for retirement pay
    -       -       -       1,842  
Share purchase advances
    -       -       -       750,000  
                                 
Total non current liabilities
    -       250,000       104,917       751,842  
                                 
                                 
COMMITMENTS AND CONTINGENCIES
                               
                                 
SHAREHOLDERS' EQUITY
                               
Share capital
    127,570       127,570       127,570       127,570  
Paid in Excess
    416,733                          
Retained earnings
    (520,455 )     (137,698 )     (143,285 )     (308,463 )
Net income / (loss) for the period
    8,647       (346,692 )     (355,538 )     173,899  
                                 
Total shareholders’ equity
    32,495       (356,820 )     (371,253 )     (7,004 )
                                 
TOTAL LIABILITIES AND
                               
SHAREHOLDERS' EQUITY
    718,105       367,872       173,337       3,138,416  
 
 
2

 
 
TOUCHIT TECHNOLOGIES INC
 
STATEMENT OF COMPREHENSIVE INCOME
 
FOR THE PERIODS ENDED 30 SEPTEMBER 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010
 
(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)
 
                         
   
30/09/2012
   
31/12/2011
   
30/09/2011
   
31/12/2010
 
                         
NET SALES
    983,949       1,595,943       1,150,427       3,577,881  
COST OF SALES
    685,489       (1,341,374 )     1,024,118       (2,502,037 )
Gross profit
    298,460       254,569       126,309       1,075,844  
MARKETING AND SELLING EXPENSE
    46,382       (578,887 )     437,851       (504,329 )
GENERAL AND ADMINISTRATIVE  EXPENSES
    248,622       (316,528 )     279,900       (479,064 )
Profit from operations
    3,457       (640,847 )     (591,442 )     92,451  
OTHER INCOME AND EXPENSES,net
    5,190       294,154       57,876       24,094  
FINANCIAL INCOME AND EXPENSES, net
    --       --       178,028       (8,294 )
Profit Loss before taxation and currency translation gain/(loss)
    8,647       (346,692 )     (355,538 )     60,063  
TAXATION CHARGE
            --       --       --  
Taxation current
            --       --       --  
Deferred
            --       --       --  
CURRENCY TRANSLATION GAIN/(LOSS)
            --       --       60,063  
Net income/(loss)  for the year
    8,647       (346,692 )     (355,538 )     105,115  
OTHER COMPREHENSIVE INCOME
            --       --       --  
Total comprehensive income
    8,647       (346,692 )     (355,538 )     165,178  
 
 
3

 
 
TOUCHIT TECHNOLOGIES INC
 
STATEMENT OF CASH FLOW
 
FOR THE PERIODS ENDED 30 SEPTEMBER 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010
 
(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)
 
   
   
30/09/2012
   
31/12/2011
   
30/09/2011
   
31/12/2010
 
CASH FLOWS FROM OPERATING  ACTIVITIES
                       
Net income
    8,647       (346,692 )     (355,537 )     165,178  
Prior Period Adjustments
    (436,865 )                        
Adjustments to reconcile net income to net cash provided
            --       --       --  
By operating activities:
    (428,218 )     6,615       925,145       17,516  
Depreciation and amortisation
            --       --          
Provision for employee benefit
            --       --       801  
                                 
                                 
Changes in operating assets and liabilities
                               
Trade receivables, net
    24,072       1,378,337       1,619,205       (430,428 )
Due from shareholders
    --       --       --       (773,544 )
Due from related parties
    --       --       --       --  
Inventories
    (28,095 )     309,953       258,510       (17,620 )
Other current assets
    --       1,106       1,335       98,467  
Other non current assets
    --       --       --       331  
Trade payables
    156,519       322,557       314,928       54,126  
Due to shareholders
    --       --       --       54,413  
Due to related parties
    --       --       --       392,276  
Other current liabilities
    54,399       (1,241,442 )     (1,268,833 )     (47,386 )
Share Purchase Advances
            --       --       750,000  
                                 
Net cash generated from (used for)  operating activities
    (221,323 )     430,434       569,608       67,197  
                                 
CASH FLOWS FROM FINANCING ACTIVITIES
                               
Increase/(decrease) in short-term borrowings
    166,733       --       --       (8,931 )
Increase/(decrease) in long-term  borrowings
            (501,842 )     (646,925 )     --  
Dividends paid
            --       --       --  
                                 
Net cash (used for) provided from  financing activities
    166,713       (501,842 )     (646,925 )     (8,931 )
                                 
                                 
CASH FLOWS FROM INVESTING ACTIVITIES
                               
Purchases of property, plant and equipment and
    (5,103 )     91,141       92,735       (62,304 )
intangible assets
            --       --       --  
Share  capital increase
            --       --       --  
                                 
Net cash used for investing activities
    (5,103 )     91,141       92,735       (62,304 )
                                 
NET INCREASE / (DECREASE) IN CASH AND BANKS
    (59,693 )     19,733       50,556       (4,289 )
                                 
CASH AND BANKS AT BEGINNING OF THE YEAR
    70,289       50,556       15,418       54,845  
                                 
CASH AND BANKS AT END OF THE PERIOD
    10,596       70,289       65,974       50,556  
 
 
4

 
 
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
 
FOR THE PERIOD ENDED SEPTEMBER 30, 2012
 
   
Common Stock
   
Preferred Stock
   
Paid-in Capital
   
Treasury Stock
   
Retained
 Earnings
   
Total
Stockholder's
 Equity
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Amount
   
Amount
 
                                                             
Balance at January 1, 2012
    74,189,419     $ 127,570     $ -     $ -       127,570     $ 416,733       -     $ -     $ (484,389 )   $ 59,914  
                                                                                 
Net Income
    -       -       -       -       -       -       -       -       8,647       8,647  
                                                                                 
Capital Transactions
    -       -       -       -       -       -       -       -       -       -  
                                                                                 
Prior Period Adjustments
    -       -       -       -       -       -       -       -       (36,065 )     (36,065 )
                                                                                 
Balance at September 30, 2012
    74,189,419     $ 127,570     $ -     $ -       127,570     $ 416,733       -     $ -     $ (511,807 )   $ 32,496  
 
 
5

 
 
TOUCHIT TECHNOLOGIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2012

1.  
OPERATIONS OF THE COMPANY:

General

The Company was established as a form of partnership. In Turkey, partnership is the association of two or people who co-own a business for trading goods under a trade name. The owners have unlimited responsibility to their creditors. This form of company does not have minimum capital requirements. On May 7, 2010, the company became TouchIT Technologies, Inc, a Nevada domiciled company in the United States of America by means of a reverse merge transaction detailed herewith.

Organization

TouchIT Education Technologies Dis Ticaret Killektik Sirketi Andrew Stuart Brabin ve Ortagi formerly RT Lojistik Dis Ticaret Recep Tanisman ve Ortagi (referred as “TouchIT Education”) was established on August 27, 2007 with a “Share Transfer of Open Company and amendment Agreement.”

On May 7, 2010 TouchIT Education, TouchIT Technologies and their stockholders (“TouchIT Turkey”) entered into a Share Exchange Agreement with Hotel Management Systems, Inc. (“Hotel Management”), a Nevada corporation.

Pursuant to the terms of the Share Exchange Agreement, Hotel Management issued a total of 48,330,000 shares of their common stock, par value USD 01 per share (the “Common Stock”) to the shareholders of TouchIT Technologies and TouchIT Education in exchange for the transfer of 100% of the shares of TouchIT Tech and TouchIT Education to Hotel Management. This exchange transaction resulted in TouchIT Technologies and TouchIT Education becoming Hotel Management. The wholly-owned subsidiaries and the stockholders of TouchIT Turkey own approximately 78.93% of the Hotel Management’s issued and outstanding stock, prior to any financing.

Simultaneously with the closing of the Share Exchange Agreement, on May 7, 2010, Management entered into a Subscription Agreement (the “Subscription Agreement”) with investors for the sale of shares up to the value of USD 1,500,000 (the Purchase Price”). As a result USD 750,000 of the Purchase Price was recognized in TouchIT Education’s balance sheet as a future obligation to one of the investors.

The Turkish subsidiaries were officially closed in August 2011.

Average number of employees of the Company as of September 30, 2012 was five and September 30, 2011 is five.

Description of Business

TouchIT Technologies, Inc is a designer and manufacturer (via 3rd party) of Interactive Products, namely, Interactive Whiteboards and Interactive LCDs.
 
 
6

 
 
2.  
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2010, the FASB issued an amendment to ASC, “Fair Value Measurements and Disclosure,” to require entities to separately disclose the amounts and business rationale for significant transfers  in and out of Level 1 and Level 2  fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard is effective for interim and annual periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair measures which are effective for fiscal years beginning after December 15, 2010, its adoption will not have a material impact on the Company’s financial statements.

3.  
BASIS OF PRESENTATION

The Company maintains its books of account and prepares financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America. The Company’s fiscal year ends on December 31.

4.  
SIGNIFICANT ACCOUNTING POLICIES:

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments, which are readily convertible into, cash, with original maturities of three months or less.

Basis of Accounting

The Company uses the accrual basis of accounting.

Accounts Receivable – Recognition of Bad Debt

The Corporation considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made.

Revenue recognition

The company recognizes revenue when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is terminable, and collectability is reasonably assure. Revenue typically is recognized at the time of shipment. Sales are recorded net of discounts, rebates, and returns.

Inventories

Inventories are stated at the lower of cost or market. Costs, including an appropriate portion of fixed and variable overhead expenses are assigned to inventories by the method most appropriate to the particular class of inventory being valued on the weighted average basis.
 
 
7

 
 
Related Parties

Parties are considered to be related if one parry has the ability to control the other party or exercise significant influence over the other party in making the financial and operating decisions. For the purpose of these financial statements shareholders are referred to as related parities. Related parties are also included individuals that are principle owners, management and members of the Company’s Board of Directors and their families.

Capitalization

All costs incurred over $500 are capitalized. Costs which lengthen the life of a fixed asset are capitalized and depreciated over the extended life of the asset.

Depreciation

Depreciation is computed on the straight-line method over the estimated useful lives of the assets. Assets reviewed for impairment whenever changes in circumstances or events may indicate that the carrying amounts are not recoverable. If the fair value is less that the carrying amount of the asset, a loss is recognized for the difference.

Taxation

The Company has elected to be treated as a regular “C” corporation; therefore, the corporation , not the stockholders, will pay income taxes.

Retirement Pay Provision

Under Turkish laws, lump sum payments are made to employees retiring or involuntary leaving the Company. Such payments are considered as being part of a defined retirement benefit plan.

The retirement benefit obligation recognized in the balance sheet represents the present value of defined benefit obligation as adjusted for unrecognized actuarial gains and losses.

Leases

Leases are classified as capital leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Comprehensive Income
 
 
8

 
 
In June 1997, the Financial Accounting Standard Board issued SFAS No. 130, “Reporting Comprehensive Income.” SFAS No. 130 is effective for years beginning after June 15, 1997. This statement provides reporting standards of comprehensive income and its components and requires that all components of comprehensive income be reported in the financial statements in the period in which they are recognized. The Company has adopted the provisions of SFAS No. 130 in its financial statements and adoption of this statement did not have any effect.


Financial Instruments

Fair value is defined as the price that would be received to sell an assets or paid to transfer a liability in an orderly transaction between participants at the measurement date (i.e., an exit price). The guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority
To unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 – Quoted, active market prices for identical assets or liabilities. Level 1 also includes U.S. Treasury and federal agency securities and federal agency mortgage-backed securities, which are traded by dealers of brokers in active markets. Valuation are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. The Company did not have any Level 1 assets or liabilities.

Level 2 – Observable inputs other than Level 1, such as quoted market prices for similar assets or liabilities, quoted for identical or similar assets in inactive markets, and model derived valuations in which all significant inputs are observable in active markets. The Company did not have any Level 2 assets or liabilities.

Level 3 – Valuation techniques in which one or more significant inputs are observable in the marketable. The company did not have any Level 3 assets or liabilities.

5.  
CASH AND CASH EQUIVALENTS

As of September 30, 2012 and September 30, 2011, cash and cash equivalents comprised were comprised of the following:

      30.09.2012       30.09.2011  
                 
Cash on Hand
  $ 0     $ 0  
Banks
    10,596       65,974  
                 
Total
  $ 10,596     $ 65,974  

6.  
TRADE RECEIVABLES

As of September 30, 2012 and September 30, 2011, trade receivables comprised were comprised of the following:

      30.09.2012       30.09.2011  
                 
                 
Trade Receivables
  $ 218,796     $ 0  
Provision for doubtful accounts
    (2,000 )     (0 )
                 
Total
  $ 216,796     $ 0  
 
 
9

 
 
7.  
RELATED PARTY TRANSACTIONS:

In the course of conducting its business, the Company conducted various business transactions with related parities on commercial terms.

Related parties and shareholders balances and transactions have been presented as follows:
 
Due from related parties
  30.09.2012     30.09.2011  
                 
Total
  $ 0     $ 0  
 
Due from shareholders
  30.09.2012     30.09.2011  
                 
Total
  $ 0     $ 0  
 
Due to related parties
  30.09.2012     30.09.2011  
                 
Kamron, Inc.
  $ 158,413     $ 159,064  
ASB Trading
    131,086       106,254  
                 
Total
  $ 289,449     $ 265,318  
 
Due to shareholders
  30.09.2012     30.09.2011  
                 
Total
  $ 0     $ 0  
 
Major purchases from related parties
  30.09.2012     30.09.2011  
                 
Total
  $ 0     $ 0  
 
 
10

 
 
Major sales  to related parties
  30.09.2012     30.09.2011  
                 
               
Total
  $ 0     $ 0  
 
Service provided by
  30.09.2012     30.09.2011  
                 
Kamron, Inc.
  $ 158,413     $ 159,064  
ASB Trading
  $ 131,086       106,253  
                 
Total
  $ 289,499     $ 265,317  
 
8.  
INVENTORIES
 
    30.09.2012     30.09.2011  
                 
Trade goods
  $ 83,944     $ 8,760  
Advances given for purchases
  $ 0       98,373  
                 
Total
  $ 83,944     $ 107,133  
 
9.  
OTHER CURRENT ASSETS

As of September 30, 2012 and September 30, 2011, other receivables comprised of the following:

    30.09.2012     30.09.2011  
                 
Prepaid Expense
  $ 0     $ 0  
Advances given to personnel
  $ 0     $ 0  
Total
  $ 0     $ 0  
 
10.  
NON-CURRENT ASSETS

As of September 30, 2012 and September 30, 2011, noncurrent assets comprised of the following:

    30.09.2012     30.09.2011  
                 
Fixed Assets
  $ 6,930     $ 230  
Accumulated Depreciation
  $ 0     $ 0  
Other
    400,000       0  
Total
  $ 406,930     $ 230  
 
 
11

 
 
Rights represent the operating licenses obtained from the Under Secretariat of the Prime Ministry for Foreign Trade. The validation date of the license has been extended from 10 to 15 years in 2010.

11.  
TRADE PAYABLES

As of September 30, 2012 and September 30, 2011, trade payables were comprised of the following:

    30.09.2012     30.09.2011  
                 
Trade payables
  $
314,372
    $ 174,355  
                 
Total
  $
314,372
    $ 174,355  
 
12.  
OTHER CURRENT LIABILITIES

As of September 30, 2012 and September 30, 2011, other current liabilities of the following:

    30.09.2012     30.09.2011  
Accrued Payroll
    8,127       0  
Accrued Expenses
    33,414       0  
Other Liabilities
    40,247       0  
                 
Total
  $ 81,788     $ 0  

13.  
CAPITAL STOCK

The issued share capital of the Company is respectively for the period ended at September 30, 2012 and September 30, 2011 is comprised of the following:
 
    30.09.2012     30.09.2011  
   
Insider
   
Insider
 
   
Holdings
   
Holdings
 
Andrew Stuart Brabin
    23,610,000       16,110,000  
Ronald George Murphy
    23,610,000       16,110,000  
Recep Tanisman
    0       16,110,000  
Total Insider Holdings
  $ 47,220,000     $ 48,330,000  
 
 
12

 
 
14.  
SALES

The composition of sales by principal for the periods ended September 30, 2012 and September 30, 2011 can be summarized as follows:

   
30/09/2012
   
30/09/2011
 
             
Interactive Whiteboards
  $ 371,290     $ 761,268  
Interactive LCD/LEDs
  $ 525,961     $ 0  
Electronic Parts
  $ 0     $ 416,336  
Voting Systems
  $ 0     $ 4,738  
Wireless Tablets
  $ 3,363     $ 5,500  
LCD Components
  $ 0     $ 615  
Others
  $ 86,161     $ 16,856  
                 
Returns (-)
  $ (2,825 )   $ (54,886 )
                 
Total
  $ 983,949     $ 1,150,427  
 
15.  
COST OF SALES

The composition of cost of sales by principal for the periods ended September 30, 2012 and September 30, 2011 can be summarized as follows:

    30.09.2012       30.09.2011  
Beginning inventory of trade goods
               
Purchases
  $ 685,489     $ 1,024,118  
Ending inventory of trade goods (-)
               
Total
  $ 685,489     $ 1,024,118  
 
16.  
MARKETING AND SELLING EXPENSES

The composition of marketing and selling expenses by principal for the periods ended September 30, 2012 and September 30, 2011 are summarized as follows:

    30.09.2012     30.09.2011  
                 
Marketing and Selling Expenses
  $ 46,382     $ 437,851  
                 
Total
  $ 46,382     $ 437,851  
 
 
13

 
 
17.  
GENERAL AND ADMINISTRATIVE EXPENSES

The composition of general and administrative expenses by the principal operations for the periods ended September 30, 2012 and September 30, 2011 are as follows:

    30.09.2012     30.09.2011  
                 
General and Administrative Expenses
  $ 248,622     $ 279,900  
                 
Total
  $ 248,622     $ 279,900  
 
18.  
OTHER INCOME AND (EXPENSES), net

The composition of other income and expenses for the years September 30, 2012 and September 30, 2011 can be summarized as follows:
 
    30.09.2012     30.09.2011  
                 
Other Income
  $ 5,190     $ 235,904  
                 
Total
  $ 5,190     $ 235,904  
 
19.  
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
 
Financial risk factors

The Company’s activities expose it to a variety of financial risks, credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets seeks to minimize potential adverse effects on the Company’s financial performance.

Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates.

Foreign currency risk management

The Company undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Foreign currency position, net for the periods ended September 30, 2011 and 2010 can be summarized as follows:

Credit risk management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a financial loss to the company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company’s exposure and the credit ratings of it counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

Liquidity risk management

Liquidity risk arises from the fact that the Company may not receive funds from its counterparties at the expected time. This risk is managed by maintaining a balance between  continuity of funding and flexibility through the use of overdrafts and trade receivables.
 
 
14

 
 


Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report. This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Management’s Discussion and Analysis or Plan of Operation,” “Business” and those listed in our other Securities and Exchange Commission filings.  Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “ongoing,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking.
 
Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this Report.
 
 
15

 
 
Unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Report.

Management cautions that these statements are qualified by their terms and/or important factors, many of which are outside of our control, and involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made, including, but not limited to, the following:

        actual or anticipated fluctuations in our quarterly and annual operating results;
        actual or anticipated product constraints;
        decreased demand for our products resulting from changes in consumer preferences;
        product and services announcements by us or our competitors;
        loss of any of our key executives;
        regulatory announcements, proceedings or changes;
        announcements in the touch technology community;
        competitive product developments;
        intellectual property and legal developments;
        mergers or strategic alliances in the touch technology industry;
        any business combination we may propose or complete;
        any financing transactions we may propose or complete; or
        broader industry and market trends unrelated to its performance.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

Plan of Operation

The ability of our Company to achieve our business objectives is contingent upon our success in raising additional capital until adequate revenues are realized from operations.

We are a manufacturer (via 3rd party contract manufacture) of touch based visual communication products for education and corporate worldwide marketplaces. Our mission is to design and manufacture high quality technology products. We manufacture a large range of touch screen and touch board products to suite all types of application from pen input wireless tablets, to large enameled steel touch-sensitive interactive whiteboards, large interactive Liquid Crystal Displays (“LCD”) and large Light Emitting Diode Displays (“LED”). Our products stand out from our competition in terms of our design, functionality and price offering.  Our customers seek our products as they provide them with a different point of entry to the market in terms of price, quality of design and margin. Currently, demand for our products is exceeding our ability to supply.
In the past four years, we have designed, manufactured, launched, developed and sold five new products as well as established the business from scratch.

COMPANY OVERVIEW

We manufacture touch-based visual communication products for the education and corporate worldwide marketplaces. Our products stand out from our competition in terms of design, functionality and price offering. Our customers seek our products as they provide them a different point of entry to the market in terms of price, quality of design and margin. 
 
Our keys to success are:

1. Establish and maintain working relationships and contractual agreements with distribution and Original Equipment Manufacturer (“OEM”) customers;
2. Increase our profit margin by lowering the import and raw material costs by bulk purchasing from vendors;
3. By increasing our purchasing power, we can increase our stock holding and lowering delivery times to customers thus enabling further sales growth; and
4. Effectively communicate with our current and potential customers, through targeted efforts, our position as a differentiated provider of the highest quality of margin laden touch-based communication products.
 
 
16

 

Recent Developments

On April 11, 2012, we borrowed Two Hundred Fifty Thousand Dollars ($250,000) (the “Advance”) from Bibby International Trade Finance (the “Lender”) pursuant to a revolving credit facility evidenced by a Master Purchase Agreement with an effective date of April 11, 2012 (the “MPA”).

The MPA evidences a revolving credit facility for the purchase of the Company’s accounts receivable up to the principal amount of $250,000, which subject to Lender approval, may be increased. The outstanding principal amount is due on April 11, 2013.

The Advance is secured by, among other things, (i) the MPA made by and between our Company and the Lender pursuant to which the Borrower has granted a security interest in all of the Borrower's assets to the Lender (the "Security Agreement"), (ii) a personal guaranty and validity guaranty executed by Andrew Brabin, Chief Executive Officer of our Company.

The MPA also includes customary representations and warranties and affirmative and negative covenants, including, among others, payment of certain customary fees and expenses, covenants relating to financial reporting, maintenance of property and insurance, incurrence of liens and/or other indebtedness. The MPA also contains customary provisions for events of default, remedies in circumstances of default, required notices, governing law and jurisdiction of governance.

We have now completed the development and the establishment of a production line in Taiwan for a new range of Interactive LCD & LED products. These products include Interactive LCDs, with and without an embedded PC in sizes from 32” to 82” and LEDs from 42” to 80”. The unique feature for the range of LCDs and LEDs is that they do not require a driver to be installed, nor do they require any form of calibration by the user. These are true plug and play devices. All of these products are full high definition and touch-based and include options of multiple input “multi-touch”. We have also launched the TouchIT Fusion which is three interactive products in one. An Interactive LCD, and Interactive Easel and an Interactive Table. This is a revolutionary product as it takes us into new group collaboration markets.

We have seeded units and sold into the United States, Australia and the Middle East for the new LCD product line. The company has received excellent feedback on these models and Management expects that by Quarter 4 2012, the LCD range will be 40% of revenue. The LCD range represents a higher ticket item which will impact revenues positively and also presents a greater margin opportunity which Management believes will have a positive impact on profits.

We have continued our efforts of expanding our product line through the K thru 12 markets as well as the higher Educational market. We are working on opportunities in Pennsylvania, Michigan, Mississippi, and higher educational institutions in Upstate NY and NJ. 

We have expanded our reseller base with Demco, PCMall.gov, Cascade, US Markerboard, Touchboards.com and OfficeMax and look to expand further into the Canadian and South American marketplaces with several interested parties looking at the TouchIT product lines.

We have enlisted the services of a new Sales Rep for the USA that will commence activities in Q4 2012. His role will involve the appointment of new resellers through the USA. Coming from the industry, Management is optimistic he will have a positive impact on revenues for Q4 2012 and beyond.

We have had additional interest from the US government on our interactive boards and Interactive LCD. Subsequently, the US Government has purchased sample units of the new TouchIT LCD Duo. This was delivered this quarter and is being installed and trialed.

We have targeted the retail marketplace and partnered with the Sales and Marketing Team, Berberian Associates Group covering New England, Florida, Midwest and the South in order to take TouchIT Technologies' product line to the retail, online, educational and enterprise channels. Established for over 30 years, Berberian Associates have a wealth of experience in Sales and Marketing of technology products. They represent a host of brands and have the necessary infrastructure to help grow businesses. Berberian Associates completed sales training on the products and began the product introductions to some of the largest retailers in the USA. Companies that have expressed initial interest are Tech Depot, Tiger Direct and Sam’s Club. We have singed initial vendor agreements with Costco and Sam’s Club. Sam’s Club are now live with the products in their online portfolio. Initial meetings have also taken place with Staples USA with a look to launch the range in 2013.
 
 
17

 

We have signed a vendor agreement with Office Max in the United States of America. Office Max underwent a training program and the product line has been loaded into their website. OfficeMax have placed their first orders with TouchIT Technologies and Management expects this business to grow. We have also committed to being in the Office Max Maxi Catalogue which is released in Q4 2012 ready for 2013 as well as putting a demonstration fleet of 46” LED products at their disposal for the US marketplace.

We entered the Australian market place by partnering with Ingram Micro PTY late in 2011. Ingram Micro is currently working on several large projects which encompass both the Interactive Whiteboard and the LCD/LED product lines. Through one of the company’s resellers, our products have been chosen for the Western Australian Government Supply Contract for the next four years. Procurement from which began in September 2012. This includes both the TouchIT Board and the TouchIT LCD Duo range. We have also signed a third party vendor agreement with Dell Australia to allow Dell access to our products.

We have continued our expansion into the Middle East and are currently tendering our product in various government and private tenders. The outcomes of which we expect to be received before the end of calendar year 2012.

We continue to grow in the South African market. We officially launched the TouchIT LCD Duo range of LCD products in July and reseller took place in September 2012 in Johannesburg.

We launched this quarter a new product called TouchIT WebCast. TouchIT WebCast is a media presentation system that allows the streaming of synchronized multimedia and video presentations over the Internet from a single location, a lecture theater or boardroom for example. One can then make the presentations available to multiple viewers on cross platform devices either live or on demand anywhere in the world. TouchIT WebCast is a combination of hardware and software that when used in conjunction with our Cloud Storage and Streaming Services, allows the capture, streaming and storage of lectures, training presentations or corporate updates for example. Our current product line enables the user to present and teach. With the addition of TouchIT WebCast, those same presentations and lessons can be captured, stored and shared with anyone anywhere in the world with an internet connection.

We will generate revenue from the sale of the Recorder Box, the Cloud Services Package and the Accessories. The accessories are still being finalized and one will be the HD Camera as well as a lapel microphone to enable the Company to offer the complete package. The Cloud Services are an annual subscription so enables the company to have a reoccurring revenue stream which has not been available to the company before.

Last, we have undertaken and completed significant research and development of new technologies for a low cost interactive whiteboard. We have launched for the purpose of low cost tenders an Electromagnetic Interactive Whiteboard. This is a low cost product that will enable the Company to compete in large tenders that are particularly price sensitive in markets such as the Middle East and certain parts of Europe.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
The accompanying financial statements include the financial statements of TouchIT Tech KS and TouchIT Ed. Although not significant, it should be noted that inter-company transactions and balances do exist and have not been consolidated. TouchIT Tech KS and TouchIT Ed together are also referred to as the “Company.”

This management's discussion and analysis of our financial condition and results of operations are based on the financial statements of both TouchIT Tech and TouchIT Ed, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we will evaluate these estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:
 
 
18

 

Basis of presentation financial statements:
 
Our Company maintains its books of account and prepares its statutory financial statements in accordance with accounting principles in the United States of America and tax legislation. The accompanying financial statements are based on the statutory records, with adjustments and reclassifications, for the purpose of fair presentation in accordance with United States generally accepted accounting principles (“US GAAP”).

There are inter-company transactions that have not been consolidated on these financial statements.

Revenue recognition:

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for customer returns, rebates, and other similar allowances.

Inventories:

Inventories are stated at the lower of cost or net realizable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories held by the method most appropriate to the particular class of inventory being valued on the weighted average basis. Net realizable value represents the estimated selling price less all estimated costs of completion and costs necessary to deliver service.

Property, plant and equipment:

Property, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses, if any. Depreciation is charged so as to write off the cost of assets, other than land and construction in progress, over their estimated useful lives, using straight line method. The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

The ranges of estimated useful lives are as follows:

-  
Machinery and equipments: 2-6 years

-  
Motor vehicles: 4 years

-  
Furniture, fixtures and office equipments: 4-5 years

Shipping and handling:

Shipping and handling costs related to costs of the raw material purchased is included in cost of revenues.

Research and development costs:

Research and development costs are expensed as incurred. The costs of material and equipment that are acquired or constructed for research and development activities, and have alternative future uses, either in research and development, marketing, or sales, are classified as property and equipment or depreciated over their estimated useful lives.

Company reporting year end:

We use a calendar year as our fiscal year ending December 31.
 
 
19

 
 
RESULTS OF OPERATIONS


TOUCHIT TECHNOLOGIES, INC STATEMENTS OF COMPREHENSIVE INCOME
FOR QUARTER ENDED SEPTEMBER 30, 2012 & 2011

(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)
 
   
30/09/2012
   
30/09/2011
 
             
NET SALES
    983,949       1,150,427  
COST OF SALES
    685,489       1,024,118  
Gross profit
    298,460       126,309  
MARKETING AND SELLING EXPENSE
    46,382       437,851  
GENERAL AND ADMINISTRATIVE  EXPENSES
    248,622       279,900  
Profit from operations
    3,457       (591,442 )
OTHER INCOME AND EXPENSES,net
    5,190       57,876  
FINANCIAL INCOME AND EXPENSES, net
    --       178,028  
Profit Loss before taxation and currency translation gain/(loss)
    8,647       (355,538 )
TAXATION CHARGE
            --  
Taxation current
            --  
Deferred
            --  
CURRENCY TRANSLATION GAIN/(LOSS)
            --  
Net income/(loss)  for the year
    8,647       (355,538 )
OTHER COMPREHENSIVE INCOME
            --  
Total comprehensive income
    8,647       (355,538 )
 
NET SALES (REVENUE) – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, revenue has decreased by 14% or by $166,478 from $1,150,427 to $983,949. This decrease can be attributed firstly, to a slow down in the Interactive Whiteboard market due to uncertain budgetary commitments from certain of our customers. Our going forward sales activity reflects our management’s plan of increasing focus on the development of recurring business in existing and new markets for the new Interactive LCD & LED Lines as well as TouchIT WebCast. We are also looking to break into the retail market (Business to Business Divisions) of some of the larger retailers in the USA. The launch of the TouchIT WebCast product will also add reoccurring sales revenue to the Company. Our management does anticipate that revenues will continue to grow for the balance of the year due to the LCD/LED product lines which represents a much larger value ticket item which will drive revenues higher, despite a decrease in Interactive Whiteboard Sales. Management also notes that the Interactive LCD/LED range is a more profitable product line than the Interactive Whiteboards.
 
GROSS PROFIT – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, gross profit has decreased by $338,629 from $1,024,118 to $685,489. This is primarily due to the restructuring of the business over the last four quarters. Our management does anticipate gross profits to rise for the balance of the year.

OPERATIONAL PROFIT – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, operational profit has decreased from $279,900 to $248,622 an decrease of $31,278. This can be attributed to the decrease in revenues.
 
   
30/09/2012
   
30/09/2012
 
             
MARKETING AND SELLING EXPENSE
  $ 46,382     $ 437,851  
As a percentage of revenue
    5 %     38 %
GENERAL AND ADMINISTRATIVE EXPENSES
  $ 248,622     $ 279,900  
As a percentage of revenue
    25 %     24 %
 
 
20

 
 
NET INCOME FOR THE PERIOD – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, NET income for the period has increased by $364,185 from $(355,538) to $8,647 This can be attributed to the Management’s focus on reducing overhead costs to maximize profitability when revenues increase, and also the shift in sales to the more profitable LCD/LED product lines.

TOUCHIT TECHNOLOGIES, INC BALANCE SHEET AT SEPTEMBER 30, 2012 & 2011

(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)
 
CURRENT ASSETS
 
30/09/2012
   
30/09/2011
 
             
Cash and cash equivalents
    10,596       65,974.00  
Trade receivables, net
    216,796       -  
Due from related parties
    -       -  
Due from Shareholders
    -       -  
Inventories
    83,783       107,133.00  
Other current assets
    -       -  
                 
Total current assets
    311,175       173,107.00  
                 
NON CURRENT ASSETS
               
                 
Property, plant and equipment,net
    6,930       230.00  
Intangible assets, net
            -  
Rights
            -  
Other non current assets
    400,000       -  
                 
Total non current assets
    406,930       230.00  
                 
                 
TOTAL ASSETS
    718,105       173,337.00  
                 
                 
CURRENT LIABILITIES
               
Borrowings
    -       -  
Trade payables
    314,372       174,355.00  
Due to shareholders
    -       -  
Due to related parties
    289,449       265,318.00  
Other current liabilities
    81,788       -  
                 
Total current liabilities
    685,609       439,673.00  
                 
                 
NON CURRENT LIABILITIES
               
Borrowings
    -       104,917  
Employee termination benefits
    -       -  
Reserve for retirement pay
    -       -  
Share purchase advances
    -       -  
                 
Total non current liabilities
    -       104,917  
                 
                 
COMMITMENTS AND CONTINGENCIES
               
                 
SHAREHOLDERS' EQUITY
               
Share capital
    127,570       127,570  
Paid in Excess
    416,733          
Retained earnings
    (520,455 )     (143,285 )
Net income / (loss) for the period
    8,647       (355,538 )
                 
Total shareholders’ equity
    32,495       (371,253 )
                 
TOTAL LIABILITIES AND
               
SHAREHOLDERS' EQUITY
    718,105       173,337  
 
 
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CURRENT ASSETS – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, total current assets have increased by $138,068. This increase is due to a decrease in its trade receivables.

NON-CURRENT ASSETS – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, total non-current assets have increased by $406,700. This is mainly due to the recognition of the value of the Full Reporting Public Shell on the Company’s balance sheet, as well as a small increase of $6700 in equipment.

TOTAL ASSETS – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, total assets have increased by $544,768 from $173,337 to $718,105. The reason for the increase in assets can be attributed to the increase in trade receivables and current assets as well as the recognition of the value of the Full Reporting Public Shell on the Company’s balance sheet.

CURRENT LIABILITIES – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, total current liabilities have increased by $245,936 from $439,673 to $685,609, a 55% increase. Trade payables have increased by 80% or $140,017, which can be attributed to the trade credit that is being offered to the Company from the LCD/LED supplier.

NON-CURRENT LIABILITIES - For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011 they have decreased by $104,917 from $104,917 to $0. This can be attributed to the company paying off its long term debt and restructuring its line of credit.
 
 
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TOUCHIT TECHNOLOGIES, INC STATEMENT OF CASH FLOW FOR QUARTERS ENDED
SEPTEMBER 30, 2012 & 2011

(Amounts expressed in US Dollars (USD) in full unless otherwise indicated)

   
30/09/2012
   
30/09/2011
 
CASH FLOWS FROM OPERATING  ACTIVITIES
           
Net income
    8,647       (355,537 )
Prior Period Adjustments
    (436,865 )        
Adjustments to reconcile net income to net cash provided
            --  
By operating activities:
    (428,218 )     925,145  
Depreciation and amortisation
            --  
Provision for employee benefit
            --  
                 
                 
Changes in operating assets and liabilities
               
Trade receivables, net
    24,072       1,619,205  
Due from shareholders
    --       --  
Due from related parties
    --       --  
Inventories
    (28,095 )     258,510  
Other current assets
    --       1,335  
Other non current assets
    --       --  
Trade payables
    156,519       314,928  
Due to shareholders
    --       --  
Due to related parties
    --       --  
Other current liabilities
    54,399       (1,268,833 )
Share Purchase Advances
            --  
                 
Net cash generated from (used for)  operating activities
    (221,323 )     569,608  
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Increase/(decrease) in short-term borrowings
    166,733       --  
Increase/(decrease) in long-term  borrowings
            (646,925 )
Dividends paid
            --  
                 
Net cash (used for) provided from  financing activities
    166,713       (646,925 )
                 
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Purchases of property, plant and equipment and
    (5,103 )     92,735  
intangible assets
            --  
Share  capital increase
            --  
                 
Net cash used for investing activities
    (5,103 )     92,735  
                 
NET INCREASE / (DECREASE) IN CASH AND BANKS
    (59,693 )     50,556  
                 
CASH AND BANKS AT BEGINNING OF THE YEAR
    70,289       15,418  
                 
CASH AND BANKS AT END OF THE PERIOD
    10,596       65,974  
 
NET INCOME FOR THE PERIOD – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, NET income for the period has increased by $364,185 from $(355,538) to $8,647 This can be attributed to the Management’s focus on reducing overhead costs to maximize profitability when revenues increase, and also the shift in sales to the more profitable LCD/LED product lines.

NET CASH GENERATED FOR OPERATING ACTIVITIES – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, NET cash generated for operating activities was $(221,323) compared to $569,608 which is an decrease of $790,931. This can be attributed primarily in the decrease of accrued liabilities which were cancelled following the closure of the Turkish Subsidiaries.

Cash flow in general has improved as we make use of the Credit Facility from our Lender. Our management expects to utilize the facility to its full extent as our business continues to grow.

CASH FLOW FROM FINANCING ACTIVITES – For the first nine months of the year, quarter ended September 30, 2012, as compared to the nine months ended September 30, 2011, cash flow from financing activities was $166,713 compared to $(646,925) at September 30, 2011. This is due to an increase in long term borrowings.

CASH POSITION. There was a NET decrease in the cash and cash equivalents of $59,693 from the beginning of the period through September 30, 2012. This change in cash position can be attributed to being normal in course of regular business. We generally pay our suppliers on 30 day terms.
 
 
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Item 3. 
Quantitative and Qualitative Disclosures About Market Risk.

We are a “smaller reporting company” (as defined by Rule 12b-2 of the Exchange Act) and are not required to provide the information required under this item.
 
Item 4. 
Controls and Procedures.

(a) Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934 require public companies to maintain “disclosure controls and procedures,” which are defined to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the period covered by this Report.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2012, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.  Management has identified the following nine material weaknesses in our disclosure controls and procedures:

1.           We do not have written documentation of our internal control policies and procedures.  Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act.  Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2.           We do not have sufficient segregation of duties within accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3.           We do not have review and supervision procedures for financial reporting functions. The review and supervision function of internal control relates to the accuracy of financial information reported. The failure to review and supervise could allow the reporting of inaccurate or incomplete financial information. Due to our size and nature, review and supervision may not always be possible or economically feasible.  Management evaluated the impact of our significant number of audit adjustments and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

(b) Changes in internal control over financial reporting

During the nine months ended September 30, 2012, our Company has not made any changes to internal control over financial reporting.
 
PART II - OTHER INFORMATION
 
Item 1. 
Legal Proceedings.

We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse affect on its business, financial condition or operating results.
 
 
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Item 2. 
Unregistered Sales of Equity Securities and Use of Proceeds.
 
On May 7, 2010, we entered into a Share Exchange Agreement with TouchIT Tech KS, the stockholders of TouchIT Tech KS, TouchIT, and the stockholders of Touch Ed, pursuant to which we issued 48,330,000 shares of our Common Stock to the shareholders of TouchIT Tech KS and TouchIT Ed in exchange for all shares held by these shareholders in TouchIT Tech KS and TouchIT Ed.   The issuance of these shares was exempted from registration pursuant to Section 4(2) of the Securities Act of 1933.   The terms of the Share Exchange Agreement are discussed more fully in Item 1.01 and 2.01 on Form 8-K, filed with the SEC on May 12, 2010.
 
In connection with the closing of the Share Exchange Agreement, on May 7, 2010, we entered into a Subscription Agreement with certain investors for the sale of up to $1,500,000 of principal amount convertible promissory notes of the Company convertible into up to 6,000,000 shares of our Common Stock and share purchase warrants to purchase up to 6,000,000 shares of our Common Stock.  The terms of the Subscription Agreement, Notes and Warrants (including the terms of conversion and/or exercise of the Notes and Warrants) are discussed more fully in Item 1.01 and 2.01 on Form 8-K, filed with the SEC on May 12, 2010.   The issuance of these securities was exempted from registration pursuant to Section 4(2) of the Securities Act of 1933.

Item 6. 
Exhibits
 
(a)  Exhibits
 
Exhibit
Number
Description of Exhibit
   
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
   
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.
   
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Executive Officer).
   
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Principal Financial Officer).
   
101.INS tucn-20120930.xml XBRL Instance Document
 
101.SCH tucn-20120930.xsd XBRL Taxonomy Extension Schema Document
 
101.CAL tucn-20120930_cal.xml XBRL Taxonomy Extension Calculation Linkbase Document
 
101.DEF tucn-20120930_def.xml XBRL Taxonomy Extension Definition Linkbase Document
 
101.LAB tucn-20120930_lab.xml XBRL Taxonomy Extension Labels Linkbase Document
 
101.PRE tucn-20120930_pre.xml XBRL Taxonomy Extension Presentation Linkbase Document
 
PART III – REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM
 
 
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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.
 
 
TouchIT Technologies, Inc.
 
       
 
By:
/s/ Andrew Brabin
 
   
Andrew Brabin
Chief Executive Officer
Dated: November 9 2012
 
 
 
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