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EX-31.1 - CERTIFICATION - KUN DE INTERNATIONAL HOLDINGS INC.sclg_ex311.htm

 

 

U.S. 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, 2013

 

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

 

For the transition period from _______ to _______

 

Commission File No. 333-162518

 

SECURE LUGGAGE SOLUTIONS INC.

(Name of small business issuer in its charter)

 

Delaware

 

68-0677444

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

2375 East Camelback Road, 5th Floor

Phoenix, Arizona 85016

(Address of principal executive offices)

 

(602) 387-4035

(Issuer’s telephone number)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Name of each exchange on which registered:

None

   
     

Securities registered pursuant to Section 12(g) of the Act:

 
 

Common Stock, $0.001

   

(Title of Class)

   

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 (Section 229.405 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 filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

 

Class

 

Outstanding as of June 30, 2013

Common Stock, $0.001

 

20,677,000

 

 

 

SECURE LUGGAGE SOLUTIONS INC.

FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2013

 

INDEX

 

   

Page

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

   

3

 
         

PART I. FINANCIAL INFORMATION

       
         

Item 1.

Financial Statements

   

4

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   

12

 

Item 3.

Qualitative and Quantitative Disclosures About Market Risk

   

15

 

Item 4.

Controls and Procedures

   

15

 
         

PART II. OTHER INFORMATION

       
         

Item 1.

Legal Proceedings

   

17

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

   

17

 

Item 3.

Defaults Upon Senior Securities

   

17

 

Item 4.

Mine Safety Disclosure

   

17

 

Item 5.

Other information

   

17

 

Item 6.

Exhibits

   

18

 
         

SIGNATURES

   

19

 

 

 
2

 

Forward-Looking Information

 

This Quarterly Report of Secure Luggage Solutions Inc. on Form 10-Q contains forward-looking statements, particularly those identified with the words, “anticipates,” “believes,” “expects,” “plans,” “intends,” “objectives,” and similar expressions. These statements reflect management’s best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under “Management’s Discussion and Analysis and Plan of Operations,” generally, and specifically therein under the captions “Liquidity and Capital Resources” as well as elsewhere in this Quarterly Report on Form 10-Q. Actual events or results may differ materially from those discussed herein. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

 

 
3

 

ITEM 1. FINANCIAL STATEMENTS

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

 

BALANCE SHEETS

 

    June 30,     December 31,  
  2013     2012  

Assets:

Current assets

       

Cash

 

$

430

   

$

430

 

Total current assets

   

430

     

430

 

Prepayment

   

-

      -  

Total Assets

 

$

430

   

$

430

 
               

Liabilities:

               

Current Liabilities

               

Accounts payable and accrued expenses

 

$

88,028

   

$

88,028

 

Due to Related Parties

   

4,674

      -  

 

 

 

Total current liabilities

   

92,702

     

88,028

 
               

Total liabilities

   

92,702

     

88,028

 
               

STOCKHOLDERS' DEFICIT

               
               

Common Stock, authorized 100,000,000 par value $0.001 issued 20,677,000 respectively

   

20,707

     

20,707

 

Preferred Stock authorized 20,000,000 par value $0.001 0 issued

   

-

     

-

 

Shares to be issued for services

   

-

     

-

 

Stock subscription receivable

   

-

     

-

 

Additional paid-in capital

   

977,892

     

977,892

 

Deficit Accumulated During the Development Stage

 

(1,090,871

)

 

(1,086,197

)

Total Stockholders' Deficit

 

(92,272

)

 

(87,598

)

               

Total Liabilities and Stockholders' Deficit

 

$

430

   

$

430

 

 

The accompanying notes are an integral part of these financial statements.

 

 
4

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

 

STATEMENTS OF OPERATIONS

 

                    From inception  
                    (December 4,  
    For the Three Months Ended     For the Six Months Ended     2008) to  
    June 30,     June 30,     June 30,     June 30,     June 30,  
    2013     2012     2013     2012     2013  

Revenues

 

$

-

   

$

-

   

$

-

   

$

-

   

$

-

 

Cost of Services

   

-

     

-

     

-

     

-

     

-

 

Gross Margin

   

-

     

-

     

-

     

-

     

-

 
                                       

Operating Expenses:

                                       

Professional Fees

   

460

     

460

     

920

     

920

     

719,514

 

General and Administrative Expenses

   

1,877

     

2,380

     

3,754

     

4,759

     

127,295

 
                                       

Total Operating Expenses

   

2,337

     

2,840

     

4,674

     

5,679

     

846,809

 
                                       

Operating Loss

 

(2,337

)

 

(2,840

)

 

(4,674

)

 

(5,679

)

 

(846,809

)

                                       

Other (Income) Expenses

                                       

Interest Expense

    -       -                  

1,145

 

Impairment

   

-

      -      

-

           

242,917

 
                                       

Total Other Expenses

   

-

      -      

-

      -      

244,062

 
                                       

Net Loss Before Income Taxes

 

(2,337

)

 

(2,840

)

 

(4,674

)

 

(5,679

)

 

(1,090,871

)

                                       

Income Tax

   

-

     

-

     

-

     

-

     

-

 
                                       

Net Loss

 

$

(2,337

)

 

$

(2,840

)

 

$

(4,674

)

 

$

(5,679

)

 

$

(1,090,871

)

                                       

Loss per Share, Basic & Diluted

 

$

(0.00

)

 

$

(0.01

)

 

$

(0.00

)

 

$

0.00

         
                                       

Weighted Average Shares Outstanding

   

20,677,000

     

20,677,000

     

20,677,000

     

20,677,000

         

 

The accompanying notes are an integral part of these financial statements.

 

 
5

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

 

STATEMENTS OF CASH FLOWS

 

                    From inception  
                    (December 4  
                   

2008)

 
   

SIX MONTHS ENDED

   

through

 
   

June 30,

   

June 30,

   

June 30,

 
   

2013

   

2012

   

2013

 

CASH FLOW FROM OPERATING ACTIVITIES:

                       

Net loss for the period

 

$

(4,674

)

 

$

(5,679

)

 

$

(1,090,871

)

Adjustments to reconcile net loss from operations:

                       

Shares to be ussed and issued for services

   

-

     

-

     

114,000

 

Interest

           

-

     

729

 

Depreciation and Amortization

   

-

     

-

     

22,083

 

Impairment

   

-

     

-

     

242,917

 

Forgiveness of Shareholder loan

   

-

     

-

     

212,985

 

Prepayment

   

-

     

-

       -  

Change in Operating Assets and Liabilities:

                       

Prepaid Costs

   

-

     

-

       -  

Accounts Payable

   

-

     

-

     

88,028

 

Due to Related Parties

   

4,674

     

5,679

     

4,674

 

Increase (decrease) in accounts payable- related party

   

-

     

-

       -  

Increase (decrease) in debt

   

-

     

-

       -  

Net cash used in Operating Activities

   

-

     

-

   

(405,455

)

                         

CASH FLOW FROM INVESTING ACTIVITIES:

                       

Purchase of Assets

     -      

-

   

(30,000

)

Net Cash used in Investing Activities

   

-

     

-

   

(30,000

)

                         

CASH FLOW FROM FINANCING ACTIVITIES:

                       

Share subscriptions received

   

-

     

-

     

231,000

 

Repayment shareholder loan

   

-

     

-

   

(56,000

)

Proceeds from issuance of common stock

   

-

     

-

     

260,885

 

Proceeds from subscriptions receivable

   

-

       -        -  

Net Cash provided by Financing Activities

   

-

     

-

     

435,885

 
                         

Net Increase (Decrease) in Cash

   

-

     

-

     

430

 

Cash at Beginning of Period

   

430

     

430

     

-

 

Cash at End of Period

 

$

430

   

$

430

   

$

430

 
                         

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                       

Cash paid for interest

 

$

-

   

$

-

   

$

-

 

Cash paid for franchise and income taxes

 

$

-

   

$

-

   

$

-

 

 

 The accompanying notes are an integral part of these financial statements.

 

 
6

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2013

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Secure Luggage Solutions, Inc. ( the "Company") was organized under the laws of the State of Delaware on December 4, 2008. The Company is a development stage enterprise in the business of luggage wrap. Luggage wrap is a plastic covering that is applied by machine to checked baggage in a retail kiosk with the passenger present. The Company however, has not been able to enter into any license agreement with any airport that would allow it to offer its luggage wrap product on airport premises.

 

Basis of Presentation

 

These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

 

NOTE 2 – GOING CONCERN

 

The Company’s financial statements as of June 30, 2013 have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company has incurred a cumulative net loss from inception December 4, 2008 through June 30, 2013 of $1,090,871.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Cash and cash equivalents

 

The Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.

 

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

 

 
7

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2013

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Management believes that the estimates used are reasonable.

 

In Management's opinion all adjustments necessary for a fair statement of the results for the interim periods have been made. All adjustments are normal and recurring.

 

Reclassifications

 

Certain prior year balances have been reclassified to conform to the current year presentation.

 

Revenue Recognition

 

The Company recognizes revenue on an accrual basis. Revenue is generally realized or realizable and earned when all of the following criteria are met: 1) persuasive evidence of an arrangement exists between the Company and our customer(s); 2) services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.

 

Fair value of financial instruments

 

The carrying value of cash equivalents and accrued expenses approximates fair value due to the short period of time to maturity.

 

Stock-based compensation

 

The Company recognizes stock-based compensation in accordance with ASC Topic 718 “Stock Compensation”, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

 

Recently Issued Accounting Principles

 

The following accounting standards were issued as of December 26, 2011: ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements. This ASU affects all entities that are required to make disclosures about recurring and nonrecurring fair value measurements under FASB ASC Topic 820, originally issued as FASB Statement No. 157, Fair Value Measurements. The ASU requires certain new disclosures and clarifies two existing disclosure requirements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

 

 
8

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2013

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

ASU 2011-04, Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU supersedes most of the guidance in Topic 820, although many of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. In addition, certain amendments in ASU 2011-04 change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements. The amendments in ASU 2011-04 are effective for public entities for interim and annual periods beginning after December 15, 2011.

 

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, ''Technical Corrections and Improvements" in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

 

In August 2012, the FASB issued ASU 2012-03, "Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)" in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 4 – IMPAIRMENT-LICENSE USE RIGHT

 

In 2011 the Company entered into an agreement to purchase licensing rights for their secure wrapping. The Company paid $30,000 in cash and issued 1,175,000 shares valued at .20 cents for a total amount of $265,000. The Company amortized this cost on a straight line basis over 10 years. At December 31, 2011 the Company impaired the balance remaining on the licensing rights of $242,917.

 

NOTE 5 – EQUITY

 

On April 11, 2011 the Company increased it authorized shares from 25,000,000 to 100,00,000 with a par value of $.0.001 and the creation of 20,000,000 shares of preferred stock with the same par. The effective date was April 4, 2011 which has been retrospectively applied to the financial statements presented.

 

During 2011 the Company issued 3,200,000 shares of common stock. Of this amount, 390,000 shares were issued for services valued at .20 or $78,000. 435,000 shares were issued for cash of $87,000. 1,175,000 shares were issued for the licensing agreement, later impaired of $235,000 and 1,200,000 shares for subscriptions previously entered into of $240,000.

 

In 2012 the Company issued 30,000 shares at market for an expense of $6,000. 

 

 
9

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2013

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

In 2011 the Company incurred charges and expenses paid by officers in the amount of $150,080. At the year end the officers agreed to forgive the balance owed which was cumulative equaling $201 628. This amount was charged to additional paid in capital as debt forgiveness

 

In 2012 the officers paid for expenses of the company of $11,357. This amount was later forgiven and charged to paid in capital.

 

In 2013 officers advanced $4,674 for expenses.

 

NOTE 7 – INCOME TAX

 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

Net deferred tax assets consist of the following components as of December 31, 2012 and 2011:

 

    December 31, 2012     December 31, 2011        

Deferred Tax Assets – Non-current:

             
               

NOL Carryover

 

$

281,034

   

$

269,677

       

Payroll Accrual

   

-

     

-

       

Less valuation allowance

 

(281,034

)

 

(269,677

)

     

Deferred tax assets, net of valuation allowance

 

$

-

   

$

-

       

 

 
10

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2013

 

 

NOTE 7 – INCOME TAX (continued)

 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended December 31, 2012 and 2011 due to the following:

 

    2012     2011  
             

Book Income

 

$

(17,357

)

 

$

(699,925

)

Meals and Entertainment

   

-

     

-

 

Stock for Services

   

6,000

     

78,000

 

Other

           

477,917

 

Valuation allowance

   

11,357

     

144,008

 
   

$

-

   

$

-

 

 

At December 31, 2012, the Company had net operating loss carry forwards of approximately $281,034 that may be offset against future taxable income from the year 2012 to 2027 No tax benefit has been reported in the December 31, 2012 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

 

NOTE 8 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there is one such events that are material to the financial statements to be disclosed: 

  1. In 2014 the Company incurred a change of control and change in business direction.
 
11

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

BACKGROUND

 

Secure Luggage Solutions Inc. (the "Company", "we", "us", or "our") was incorporated in the State of Delaware on December 4, 2008. We are a development stage company in the business of luggage wrap. Luggage wrap is a product that is applied to checked luggage in a retail kiosk with the passenger present. Our product is a plastic covering applied by a machine. We intend to offer our luggage wrap product at pre check-in areas of airports to passengers that choose to utilize luggage wrap. As of the date of this filing, we have not entered into any license agreements with airports that would allow us to offer our luggage wrap product at pre check-in areas of airports. We continue to actively promote our luggage wrap services to carriers, airport management and other parties operating within the Vancouver International Airport, which is our initial marketing target we have identified to begin our operations

 

RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report. Our reviewed financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

We are a development stage company and have not generated any revenue. We have incurred recurring losses since inception. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

SUMMARY COMPARISON OF OPERATING RESULTS

 

 

   

Six Month Period ended
June 30,

 
   

2013

   

2012

 

Revenues, net

 

$

-0-

   

$

-0-

 

Operating Expenses

   

4,674

     

5,679

 

Loss from Operations

   

(4,674

)

   

(5,679

)

 

 

 

 
12

 

Six Month Period Ended June 30, 2013 Compared to Six Month Period Ended June 30, 2012

 

During the six month periods ended June 30, 2013 and June 30, 2012, we did not generate any revenue. During the six month period ended June 30, 2013, we incurred operating expenses of $4,674 compared to $5,679 incurred during the six month period ended June 30, 2012, a decrease of $1,005. Operating expenses generally consisted of: (i) professional fees of $920 (2012: $920); and (ii) general and administrative of $3,754 (2012: $4,759). The decrease in operating expenses was primarily attributable to the decrease in professional fees based on the decreased scale and scope of our business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

Our net loss for the six month period ended June 30, 2013 was ($4,674) compared to a net loss of ($5,679) during the six month period ended June 30, 2012, a decrease of $1,005 due to the factors discussed above.

 

Three Month Period Ended June 30, 2013 Compared to Three Month Period Ended June 30, 2012

 

During the three month periods ended June 30, 2013 and June 30, 2012, we did not generate any revenue. During the three month period ended June 30, 2013, we incurred operating expenses of $2,337 compared to $2,840 incurred during the three month period ended June 30, 2012, a decrease of $503. Operating expenses generally consisted of: (i) professional fees of $460 (2011: $460); and (ii) general and administrative of $1,877 (2012: $2,380). The decrease in operating expenses was primarily attributable to the decrease in professional fees based on the decreased scale and scope of our business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

Our net loss for the three month period ended June 30, 2013 was ($2,337) compared to a net loss of ($2,840) during the three month period ended June 30, 2012, a decrease of $503 due to the factors discussed above.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Six Month Period Ended June 30, 2013

 

As of June 30, 2013, our current assets were $430 and our current liabilities were $92,707, which resulted in a working capital deficit of $92,277. As of June 30, 2013, current assets were comprised of $430 in cash and our current liabilities were comprised of $88,028 in accounts payable and accrued expense and $4,674 due to related parties.

 

There was no decrease or increase in total assets during the six month period ended June 30, 2013 from fiscal year ended December 31, 2012.

 

The slight increase in our liabilities during the six month period ended June 30, 2013 from fiscal year ended December 31, 2012 was primarily due to the increase in amounts due to related parties.

 

Cash Flows from Operating Activities

 

For the six month periods ended June 30, 2013 and June 30, 3012, net cash flows used by operating activities was $-0- . During the six month period ended June 30, 2013, net cash flows used in operating activities consisted primarily of a net loss of $4,674 (2012: $5,679), which was changed by an increase of $4,674 (2012: $5,679) in accounts payable -related party.

  

 
13

 

Cash Flows from Investing Activities

 

For the six month periods ended June 30, 2013 and June 30, 2012, net cash flows used in investing activities was $-0-.

 

Cash Flows from Financing Activities

 

For the six month periods ended June 30, 2013 and June 30, 2012, net cash flows from financing activities was $-0-.

 

PURCHASE OF SIGNIFICANT EQUIPMENT

 

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

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

GOING CONCERN

 

The independent auditors' report accompanying our December 31, 2012 and December 31, 2011 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations, have a working capital deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about our ability to continue as a going concern.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations other than in respect of the early adoption of the new regulations relating to Development Stage Entities as discussed in the footnotes to our financial statements.

 

OFF-BALANCE SHEET ARRANGEMENTS.

 

We have no off-balance sheet arrangements.

 

 
14

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit 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, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.

 

Management’s report on internal control over financial reporting.

 

Our chief executive officer and our chief financial officer are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

 
15

 

Based on our assessment, our chief executive officer and our chief financial officer believe that, as of June 30, 2013, our internal control over financial reporting is not effective based on those criteria, due to the following:

 

·

Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including our accounting personnel.

 

·

Lack of an audit committee and deficiency in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.

 

In light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the periods then ended.

 

This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.

 

Changes in internal control over financial reporting.

 

There were no significant changes in our internal control over financial reporting during the quarter ended June 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

AUDIT COMMITTEE

 

Our board of directors has not established an audit committee. The respective role of an audit committee has been conducted by our board of directors. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our board of directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

 

 
16

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 1A. RISK FACTORS

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

 

No unregistered shares were sold during the six months ended June 30, 2013.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No senior securities were issued and outstanding during the six months ended June 30, 2013.

 

ITEM 4. MINE SATEFY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

 
17

 

ITEM 6. EXHIBITS

 

The following exhibits are filed as part of this Quarterly Report

 

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)

Financial Statements.

 

(b)

Exhibits required by Item 601.

 

31.1

 

Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*

     

31.2

 

Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*

     

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act*

 

101.INS **

 

XBRL Instance Document

     

101.SCH **

 

XBRL Taxonomy Extension Schema Document

     

101.CAL **

 

XBRL Taxonomy Extension Calculation Linkbase Document

     

101.DEF **

 

XBRL Taxonomy Extension Definition Linkbase Document

     

101.LAB **

 

XBRL Taxonomy Extension Label Linkbase Document

     

101.PRE **

 

XBRL Taxonomy Extension Presentation Linkbase Document

_________

* Filed herewith.

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
18

 

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.

 

 

SECURE LUGGAGE SOLUTIONS, INC.

 
       

October 21, 2014

By:

/s/ Don Bauer

 
   

Don Bauer

 
 

Its:

CEO

(Principal Executive Officer)

       

October 21, 2014

By:

/s/ Don Bauer

 
   

Don Bauer

 
 

Its:

Chief Financial Officer, Secretary, Treasurer

(Principal Financial and Accounting Officer)

 

 

 19