BTCS Inc. - Quarter Report: 2012 March (Form 10-Q)

f10q0312_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 March 31, 2011

¨ 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: 59,189,419 shares of common stock outstanding as of May10, 2012.

TOUCHIT TECHNOLOGIES, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012

INDEX

		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	F-1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	1

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	10

Item 4.	Controls and Procedures.	11

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	11

Item 6.	Exhibits.	12

PART III – REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

Signature

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)

March 31 2012

and

Comparative Periods

F-1

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 March 31, 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 OversightBoard (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

May 9, 2012

F-2

TOUCHIT TECHNOLOGIES INC

BALANCE SHEET

FOR THE PERIODS ENDED 31 MARCH 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010

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

CURRENT ASSETS	NOTE		31/03/12			31/12/11			31/03/11			31/12/10

Cash and cash equivalents		5		3,644			70,289			27,954			50,556
Trade receivables, net		6		97,257			240,867			365,234			705,225
Due from related parties		7		-			-			484,459			863,395
Due from Shareholders				-			-			49,827			50,585
Inventories		8		51,568			55,689			612,991			365,643
Other current assets		9		-						4,561			1,106

Total current assets				152,469			366,845			1,545,026			2,036,510

NON CURRENT ASSETS		10

Property, plant and equipment,net				2,832			1,027			64,051			64,495
Intangible assets, net				-			-			33,403			25,145
Rights				-			-			-			-
Other non current assets				400,000			-			153			3,555

Total non current assets				402,832			1,027			97,607			93,195


TOTAL ASSETS				555,301			367,872			1,642,633			2,129,705


CURRENT LIABILITIES
Borrowings				-			-			587			2,351
Trade payables		11		234,546			181,984			205,295			124,745
Due to shareholders				-			-			60,448			47,257
Due to related parties				342,999			265,318			807,120			1,145,992
Other current liabilities				38,866			27,390			54,209			73,233

Total current liabilities		12		616,411			474,692			1,127,659			1,393,578


NON CURRENT LIABILITIES
Borrowings				380,668			250,000			-			-
Employee termination benefits		13		-			-			1,373			-
Reserve for retirement pay				-			-			-			1,842
Share purchase advances				-			-			750,000			750,000

Total non current liabilities				380,668			250,000			751,373			751,842


COMMITMENTS AND CONTINGENCIES				-

SHAREHOLDERS' EQUITY
Share capital		14		127,570			127,570			127,570			127,570
Retained earnings				(484,390	)		(137,698	)		(143,285	)		(308,463	)
Net income / (loss) for the period				(84,958	)		(346,692	)		(220,684	)		173,899

Total shareholders’ equity				(441,778	)		(356,820	)		(236,399	)		(7,004	)

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY				555,301			367,872			(1,642,633	)		3,138,416

F-3

TOUCHIT TECHNOLOGIES INC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIODS ENDED 31 MARCH 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010

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

	NOTE		31/03/12			31/12/11			31/03/11			31/12/10

NET SALES		15		219,882			1,595,943			773,658			3,577,881
COST OF SALES		16		150,256			(1,341,374	)		(556,766	)		(2,502,037	)
Gross profit				59,626			254,569			216,892			1,075,844
MARKETING AND SELLING EXPENSE		17		33,783			(578,887	)		(293,399	)		(504,329	)
GENERAL AND ADMINISTRATIVE EXPENSES		18		110,801			(316,528	)		(86,852	)		(479,064	)
Profit from operations				(84,958	)		(640,847	)		(163,359	)		92,451
OTHER INCOME AND EXPENSES,net		19		--			294,154			(46,836	)		24,094
FINANCIAL INCOME AND EXPENSES, net		20		--			--			(1,449	)		(8,294	)
Profit Loss before taxation and currency translation gain/(loss)				(84,958	)		(346,692	)		(211,644	)		60,063
TAXATION CHARGE				--			--			--			--
Taxation current				--			--			--			--
Deferred				--			--			--			--
CURRENCY TRANSLATION GAIN/(LOSS)				--			--			(9,039	)		60,063
Net income/(loss) for the year				(84,958	)		(346,692	)		(211,644	)		105,115
OTHER COMPREHENSIVE INCOME				--			--			--			--
Total comprehensive income				(84,958	)		(346,692	)		(220,683	)		165,178

F-4

TOUCHIT TECHNOLOGIES INC

STATEMENT OF CASH FLOW

FOR THE PERIODS ENDED 31 MARCH 2012 & 2011 AND YEARS ENDED 31 DECEMBER 2011 & 2010

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

	31/03/12			31/12/11			31/03/11			31/12/10
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		(84,958	)		(346,692	)		(220,683	)		165,178
Adjustments to reconcile net income to net cash provided					6,615
By operating activities:
Depreciation and amortisation		--			--			7,431			17,516
Provision for employee benefit		--			--			(469	)		801


Changes in operating assets and liabilities
Trade receivables, net		143,610			1,378,337			339,990			(430,428	)
Due from shareholders		--			--			(33,340	)		(773,544	)
Due from related parties		--			--			379,679
Inventories		4,121			309,953			(217,422	)		(17,620	)
Other current assets		--			1,106			3,376			98,467
Other non current assets		--			--						331
Trade payables		130,244			322,557			92,934			54,126
Due to shareholders		--			--			(336,735	)		54,413
Due to related parties		--			--			(1,330	)		392,276
Other current liabilities		11,475			(1,241,442	)		(19,024	)		(47,386	)
Share Purchase Advances		--			--						750,000

Net cash generated from (used for) operating activities		204,492			430,434			(5,593	)		67,197

CASH FLOWS FROM FINANCING ACTIVITIES
Increase/(decrease) in short-term borrowings					--			(1,764	)		(8,931	)
Increase/(decrease) in long-term borrowings		130,668			(501,842	)		--
Dividends paid					--

Net cash (used for) provided from financing activities		130,668			(501,842	)		(1,764	)		(8,931	)


CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and		(401,805	)		91,141			(15,245	)		(62,304	)
intangible assets
Share capital increase					--

Net cash used for investing activities		(401,805	)		91,141			(15,245	)		(62,304	)

NET INCREASE / (DECREASE) IN CASH AND BANKS		(66,645	)		19,733			(22,602	)		(4,289	)

CASH AND BANKS AT BEGINNING OF THE YEAR		70,289			50,556			50,556			54,845

CASH AND BANKS AT END OF THE PERIOD		3,644			70,289			27,954			50,556

F-5

TOUCHIT TECHNOLOGIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD ENDED MARCH 31, 2012


																				Total
																	Retained			Stockholder's
	Common Stock				Preferred Stock				Paid-in Capital				Treasury Stock				Earnings			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Amount			Amount

Balance at December 31, 2011		55,839,419	$	127,570	$	-	$	-		-	$	-		-	$	-	$	(137,698	)	$	(356,820	)

Net Income		-		-		-		-		-		-		-		-		(84,958	)		(84,958	)

Capital Transactions		-		-		-		-		-		-		-		-		-			-

Prior Period Adjustments		-		-		-		-		-		-		-		-		(261,734	)		-

Balance at March 31, 2011		55,839,419	$	127,570	$	-	$	-		-	$	-		-	$	-	$	(484,390	)	$	(441,778	)

F-6

TOUCHIT TECHNOLOGIES, INC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED MARCH 31, 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 0.001 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 March 31, 2011 was 6 and March 31, 2012 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.

F-7

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.

F-8

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

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.

F-9

Financial Instruments

Fair value is defined as the price that would be received to sell an assets or paid to transfer a 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 March 31, 2011 and March 31, 2012, cash and cash equivalents comprised were comprised of the following:

		31.03.2012		31.03.2011

Cash on Hand	$	0	$	0
Banks	$	3,644	$	27,954

Total	$	3,644	$	27,954

6.	TRADE RECEIVABLES

As of March 31, 2011 and March 31, 2012, trade receivables comprised were comprised of the following:

		31.03.2012			31.03.2011

Trade Receivables	$	97,257		$	365,234
Provision for doubtful accounts		(0	)		(0	)

Total	$	97,257		$	365,234

F-10

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		31.03.2012		31.03.2011

EmkoYazi Tahalari ve Egitim Gerecleri A.S.	$	0	$	321,494
TouchIT Technologies Koll. Sti.. Ronald George Murphy ve Ortaklari	$	0	$	162,965

Total	$	0	$	484,459

Due from shareholders		31.03.2012		31.03.2011

Andrew Stuart Brabin	$	0	$	9,287
Recep Tanisman	$	0	$	40,000

Total	$	0	$	49,827

Due to related parties		31.03.2012		31.03.2011

Kamron, Inc.	$	184,913	$	86,102
ASB Trading	$	158,086	$	50,349
EmkoYaziTahalariveEgitimGerecleri A.S.	$	0	$	336,172
TouchIT Education Koll. Sti	$	0	$	319,497
International RT	$	0	$	12,000
Other	$	0	$	3000

Total	$	342,999	$	807,120

Due to Shareholders		31.03.2012		31.03.2011

Ali RizaTanisman	$	0	$	44,663
Andrew Stuart Brabin	$	0	$	14,795
RecepTanisman	$	0	$	990

Total	$	0	$	60,448

F-11

Major purchases from related parties		31.03.2012		31.03.2011

TouchIT Technologies Koll Sti	$	0	$	57,211
TouchIT Education Koll Sti	$	0	$	78,225
EmkoYaziTahalariveEgitimGerecleriA.S	$	0	$	139,583

Total	$	0	$	275,019

Major sales to related parties		31.03.2012		31.03.2011

EmkoYazi Tahalari ve Egitim Gerecleri A.S	$	0	$	102,189
TouchIT Technologies Koll. Sti	$	0	$	78,225
TouchIT Education Koll Sti	$	0	$	57,211

Total	$	0	$	237,625

Service provided by		31.03.2012		31.03.2011

Kamron, Inc.	$	184,913	$	49,578
Andrew Stuart Brabin	$	0	$	52,213
ASB Trading	$	158,086	$	0
Other	$	0	$	36,372

Total	$	342,999	$	138,163

8.	INVENTORIES

		31.03.2012		31.03.2011

Trade goods	$	51,568	$	454,763
Advances given for purchases	$	0	$	205,770
Finished goods	$	0	$	201
Other inventories	$	0	$	3008
Provision for damaged slow moving stock	$	0	$	(50,751	)

Total	$	51,568	$	612,991

9.	OTHER CURRENT ASSETS

As of March 31, 2011 and March 31, 2012, other receivables comprised of the following:

		31.03.2012		31.03.2011


Prepaid Expense	$	0	$	4,561

Total	$	0	$	4,561

F-12

10.	NON-CURRENT ASSETS

As of March 31, 2011 and March 31, 2012, non-currents comprised of the following:

		31.03.2012		31.03.2011

Fully Reporting Public Shell	$	400,000	$	0
Other	$	0	$	153

Total	$	400,000	$	153

11.	TRADE PAYABLES

As of March 31, 2011 and March 31, 2012, trade payables were comprised of the following:

		31.03.2012		31.03.2011

Trade payables	$	577,546	$	205,295

Total	$	577,546	$	205,295

12.	OTHER CURRENT LIABILITIES

As of March 31, 2011 and March 31, 2012, other current liabilities of the following:

		31.03.2012		31.03.2011

Social Security & Withheld Taxes Payable	$	4,961	$	7,015
Due to personnel	$	0	$	9,168
Accrued Expenses	$	33,905	$	3,250
Advances received	$	0	$	32,266
Other Liabilities	$	0	$	2,510

Total	$	38,866	$	54,209

13.	RESERVE FOR EMPLOYMENT TERMINATION BENEFITS

The principal assumption is that the maximum liability for each year of service will increase parallel with inflation. Thus, the discount rate applied represents the expected real rate after adjusting for the anticipated effects of future inflation. Consequently, in the accompanying financial statements as at June 30, 2011, the provision has been calculated by estimating the present value of the future probable obligation of the Company arising from the retirement of the employees. The anticipated rate of forfeitures is considered. As the maximum liability is revised semiannually, the maximum amount of TRY 2,623 effective from January 1, 2011 has been taken into consideration in calculation of provision from employment termination benefits (2010: TRY 2,517)

F-13

		31.31.2012		31.03.2011

Reserve for Employment Termination	$	0	$	1,373

Total	$	0	$	1,373

14.	CAPITAL STOCK

The issued share capital of the Company is respectively for the period ended at March 31, 2011 and 2012 is comprised of the following:

		31.03.2012		31.03.2011
	Insider		Insider
	Holdings		Holdings
Andrew Stuart Brabin		16,110,000		16,110,000
Ronald George Murphy		16,110,000		16,110,000
Recep Tanisman		0		16,110,000

Total Insider Holdings		32,220,000		48,330,000
Total Outstanding		55,839,419		64,549,419

15.

SALES

The composition of sales by principal for the periods ended March 31, 2011 and 2012 can be summarized as follows:

		31.03.2012		31.03.2011

CleverBoard	$	17,000	$	337,124
TouchIT Board 50”	$	1,270	$	3,242
TouchIT Board 78”	$	119,502	$	73,514
TouchIT Board 80”	$	6,823	$	2,540
TouchIT Board 90”	$	32,263	$	1,911
TouchIT Stands	$	7,568	$	0
Voting Systems	$	0	$	4,345
Electronic Circuits	$	0	$	341,840
42” TouchIT LCD	$	1,999	$	0
55” TouchIT LCD	$	18,794	$	0
65” TouchIT LCD	$	9,998	$	0
TouchIT Document Camera	$	1,226	$	0
TouchIT RF Tablet	$	825	$	0
Others	$	2,614	$	9,142

Total	$	219,882	$	773,658

F-14

16.	COSTOF SALES

The composition of cost of sales by principal for the periods ended March 31, 2011 and 2012 can be summarized as follows:

		31.03.2012		31.03.2011

Purchases	$	150,256	$	556,766

Total	$	150,256	$	556,766

17.	MARKETING AND SELLING EXPENSES

The composition of marketing and selling expenses by principal for the periods ended March 31, 2011 and 2012 are summarized as follows:

		31.03.2012		31.03.2011

Marketing and Selling Expenses	$	33,783	$	578,887

Total	$	33,783	$	578,887

18.	GENERAL AND ADMINISTRACTIVE EXPENSES

The composition of general and administrative expenses by the principal operations for the periods ended March 31, 2011 and 2012 are as follows:

		31.03.2012		31.03.2011

General and Administrative Expenses	$	110,801	$	86,852

Total	$	33,783	$	86,852

19.	OTHER INCOME AND (EXPENSES), net

The composition of other income and expenses for the years March 31, 2011 and 2012 can be summarized as follows:

		31.03.2012		31.03.2011

Other Income and Expenses	$	0	$	(46,836	)

Total	$	0	$	(46,836	)

F-15

20.	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.

F-16

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.

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 and large interactive Liquid Crystal Displays (“LCD”). 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 three years, we have designed, manufactured, launched, developed and sold four 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.

Recent Developments

On May 7, 2010, we (which at that time was called Hotel Management Systems, Inc.), entered into a Share Exchange Agreement with TouchIT Tech KS, the stockholders of TouchIT Tech KS, TouchIT Ed, and the stockholders of 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 took place on May 7, 2010.

In connection with the closing of the Share Exchange Agreement, on May 7, 2010, we entered into a Subscription Agreement (the “Subscription Agreement”) with certain investors for the sale of up to $1,500,000 (the “Purchase Price”), which was represented by the convertible promissory notes of our Company (“Note” or “Notes”) and share purchase warrants (the “Warrants”) to purchase shares of Common Stock (the “Warrant Shares”). Due to the non-provision of the second $750,000 by certain investors, we cancelled the promissory Notes for $250,000 and $500,000 including the underlying Warrant Shares.

On February 16, 2011, we borrowed Two Hundred Fifty Thousand Dollars ($250,000) (the “Advance”) from TCA Global Credit Master Fund, LP (the “Lender”) pursuant to a revolving credit facility evidenced by a Credit Agreement with an effective date of November 30, 2010 (the “Credit Agreement”).

The Credit Agreement evidences a revolving credit facility in the minimum principal amount of $250,000, which subject to Lender approval may be increased up to One Million Dollars ($1,000,000) (the “Loan”). Interest on the Advance accrues at the rate of eight percent (8%) per annum and the outstanding and accrued interest is due and payable on a bi-monthly basis. The outstanding principal amount is due on February 16, 2012.

The Loan is also evidenced by a revolving note (the “Note”). The Credit Agreement and Note are secured by, among other things, (i) the Security Agreement 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 Financial Officer of our Company, and (iii) a personal guaranty and validity guaranty executed by RecepTanisman, the then Chief Executive Officer of our Company.

Pursuant to the Credit Agreement, on February 16, 2011, our Company issued to the Lender One Hundred Thousand (100,000) shares of our common stock, par value at $0.001 per share (the “Restricted Shares”), which have piggy back registration rights as part of any registration statement filed by our Company and full ratchet rights and anti-dilution rights during the six months following February 16, 2011. Furthermore, we also issued to Lender Twenty-Five Thousand (25,000) shares of our Company's Series A convertible preferred stock, par value of $0.001, with such shares shall be converted into shares of common stock of our Company on February 16, 2012 upon the satisfaction of certain conditions (including if the value of the Restricted Shares is less than $45,000 on February 16, 2012 based on the average closing price for the 30 trading days prior thereto). On the 28th of June 2011, the economic of the preferred shares to the Lender was increased to $65,000 in consideration for extended terms on invoices presented in a slow sales period.

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

Upon the occurrence of an event of default (as defined in the Credit Agreement), the Lender may, at its option, declare its commitments to us to be terminated and all obligations and commitments to be immediately due and payable. For all the terms and conditions of the Credit Agreement, the Security Agreement and the Note, reference is hereby made to such documents respectively filed as Exhibits 10.1, 10.2 and 10.3 as part of the Form 8-K filed with the Securities and Exchange Commission on February 23, 2011. All statements made herein concerning the foregoing document are qualified by reference to said Exhibits.

On March 1, 2012 we terminated the CreditAgreement with TCA Global Credit Master Fund LLP (“TCA”) by paying off the principal of $250 000. Management decided not to renew the agreement as we were actively seeking areplacement credit facility for the year ahead. The decision to close the credit line from TCA is due to Management’s belief that we were in a position to secure a similar arrangement with another Lender that could provide better rates than TCA. Subsequently, on April 11, 2012 the company entered into a factoring agreement by means of a Master Purchase Agreement (“MPA”) with Bibby International Trade Finance (“BITF”) for a receivables facility of up to $250 000.The MPA evidences a revolving credit facility in the maximum principal amount of $250,000, which subject to Lender approval may be increased. The MPA details the facility that has no management fees, and initial setup fee of $1000 was paid to BITF and that the Lender must be presented with a minimum of $50 000 of receivables each month in order not to attract a $600 penalty fee. Receivables sold to BITF under the MPA are guaranteed by the Company as well as personally by Andrew Stuart Brabin.

We have now completed the development and the establishment of a production line in Taiwan for a new range of Interactive LCD products. These products includeInteractive LCDs, with and without an embedded PC in sizes from 32” to 82”.The unique feature for the range of LCDs 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 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 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 Michigan, Mississippi, Los Angeles and higher educational institutions in Upstate NY and NJ.

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

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.

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 currently uploading the products into their online portfolio ready for resale in Q2 2012.

We have signed a vendor agreement with Office Max in the United States of America. Office Max is currently undergoing a training program and the product line is being loaded into their website. We have also committed to being in the Office Max Maxi Catalogue which is released in Q4 2012 ready for 2013.

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 product lines.

We entered into discussions with a new partner for the Italian market place, Satnet SRL. Satnetare due to receive their first order in Q2 2012.

We have continued our expansion into the Middle East with presentations made directly to the Ministry of Education and the company has also seen success in equipping the Tabuk University throughout with Interactive Whiteboards.

We will continue to look into the viability of an OEM offering of a content software that is suitable for both 7-11 and 11-16 age groups. If concluded, the software will be sold in conjunction with our existing products to strengthen the product portfolio.

Last, we have undertaken and completed significant research and development of new technologies for a low cost interactive whiteboard. We are evaluating both electromagnetic and CCD camera systems to enable our future Interactive Whiteboards to remain very competitive on price. We are also ready to launch an LED range of Interactive Touch Screens in sizes from 42” to 80”

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:

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.

RESULTS OF OPERATIONS

TOUCHIT TECHNOLOGIES, INC STATEMENTS OF COMPREHENSIVE INCOME

FOR QUARTER ENDED MARCH 31, 2012 & 2011

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

	31/03/2012			31/03/2011

NET SALES		219,882			773,658
COST OF SALES		150,256			(556,766	)
Gross profit		59,626			216,892
MARKETING AND SELLING EXPENSE		33,783			(293,399	)
GENERAL AND ADMINISTRATIVE EXPENSES		110,801			(86,852	)
Profit from operations		(84,958	)		(163,359	)
OTHER INCOME AND EXPENSES,net		--			(46,836	)
FINANCIAL INCOME AND EXPENSES, net		--			(1,449	)
Profit Loss before taxation and currency translation gain/(loss)		(84,958	)		(211,644	)
TAXATION CHARGE		--			--
Taxation current		--			--
Deferred		--			--
CURRENCY TRANSLATION GAIN/(LOSS)		--			(9,039	)
Net income/(loss) for the year		(84,958	)		(211,644	)
OTHER COMPREHENSIVE INCOME		--			--
Total comprehensive income		(84,958	)		(220,683	)

NET SALES (REVENUE)– For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, revenue has decreased by 72% or by $553,776 from $773,658 to $219,882. This decrease can be attributed firstly, to a slow down in the 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 Line. We are also looking to break into the retail market (Business to Business Divisions) of some of the larger retailers in the USA. Our management does anticipate that revenues will continue to grow for the balance of the year due tothe LCD product line whichrepresents a much larger value ticket item which will drive revenues higher.

GROSS PROFIT – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, gross profit has decreased by $157,356 from $216,982 to $59,626. This is primarily due to the decrease in sales revenue.

OPERATIONAL PROFIT – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, operational profit has increased from $(163,359) to (84,958) an increase of $78,401. This can be attributed to the Management’s focus on reducing overhead costs to maximize profitability when revenues increase.

	30/03/2012			30/03/2012

MARKETING AND SELLING EXPENSE		(33,783	)		(293,399	)
As a percentage of revenue		15	%		38	%
GENERAL AND ADMINISTRATIVE EXPENSES		(110,801	)		(86,852	)
As a percentage of revenue		50	%		11	%

NET INCOME FOR THE PERIOD – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011,NET income for the period has increased by $135,725 from $(220,683) to (84,958). This can be attributed to the Management’s focus on reducing overhead costs to maximize profitability when revenues increase.

TOUCHIT TECHNOLOGIES, INC BALANCE SHEET AT MARCH 31, 2012 & 2011

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

CURRENT ASSETS	31/03/2012		31/03/2011

Cash and cash equivalents		3,644		27,954
Trade receivables, net		97,257		365,234
Due from related parties		-		484,459
Due from Shareholders		-		49,827
Inventories		51,568		612,991
Other current assets		-		4,561

Total current assets		152,469		1,545,026

NON CURRENT ASSETS

Property, plant and equipment,net		2,832		64,051
Intangible assets, net		-		33,403
Rights		-		-
Other non current assets		400,000		153

Total non current assets		402,832		97,607


TOTAL ASSETS		555,301		1,642,633

CURRENT LIABILITIES
Borrowings	-		587
Trade payables	234,546		205,295
Due to shareholders	-		60,448
Due to related parties	342,999		807,120
Other current liabilities	38,866		54,209

Total current liabilities	616,411		1,127,659


NON CURRENT LIABILITIES
Borrowings	380,668		-
Employee termination benefits	-		1,373
Reserve for retirement pay	-		-
Share purchase advances	-		750,000

Total non current liabilities	380,668		751,373


COMMITMENTS AND CONTINGENCIES	-

SHAREHOLDERS' EQUITY
Share capital	127,570		127,570
Retained earnings	(484,390	)	(143,285	)
Net income / (loss) for the period	(84,958	)	(220,684	)

Total shareholders’ equity	(441,778	)	(236,399	)

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY	555,301		(1,642,633	)

CURRENT ASSETS – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, total current assets have decreased $1,392,557. This decrease is due to a decrease in sales revenue resulting in a decrease in trade receivables. These decreased from $1,545,026 at March 31, 2011 to $152,469atMarch 31, 2012. The company has also decreased its inventory holding moving to a ‘just in time’ supply rather than overstocking which in turn helps cash flow. Monies owed from related parties and from shareholders has also decreased representing a reduction in assets of $534,286

NON-CURRENT ASSETS – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, total non-current assets have increased by $305,225. This is mainly due to the recognition of the value of the Full Reporting Public Shell on the Company’s balance sheet.

TOTAL ASSETS – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, total assets have decreased by $1,087,332 from $1,642,633 to $555,301.The reason for the decrease in assets can be attributed to the decrease in Trade Receivables which is directly related to the drop in revenue, the decrease in dues from related parties and shareholders, and the move of production from Turkey to Taiwan.

CURRENT LIABILITIES – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, total current liabilities have decreased by $511,248from $1,127,659 to $616,411. Trade payables have increased by 13% or $29,251, which can be attributed to a large $100k order from Hoshan in Saudi Arabia which was secured by a letter of credit to our supplier.

NON-CURRENT LIABILITIES - For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011 they have decreased by $370,705 from $751,373 to $380,668. This can be attributed to the Share Purchase Advance brought forward on TouchIT Education’s balance sheet not being shown on TouchIT Technologies Inc now the subsidiary has been closed.

TOUCHIT TECHNOLOGIES, INC STATEMENT OF CASH FLOW FOR QUARTERS ENDED

MARCH 31, 2012 & 2011

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

	31/03/2012			31/03/2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		(84,958	)		(220,683	)
Adjustments to reconcile net income to net cash provided
By operating activities:
Depreciation and amortisation		--			7,431
Provision for employee benefit		--			(469	)


Changes in operating assets and liabilities
Trade receivables, net		143,610			339,990
Due from shareholders		--			(33,340	)
Due from related parties		--			379,679
Inventories		4,121			(217,422	)
Other current assets		--			3,376
Other non current assets		--
Trade payables		130,244			92,934
Due to shareholders		--			(336,735	)
Due to related parties		--			(1,330	)
Other current liabilities		11,475			(19,024	)
Share Purchase Advances		--

Net cash generated from (used for) operating activities		204,492			(5,593	)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase/(decrease) in short-term borrowings					(1,764	)
Increase/(decrease) in long-term borrowings		130,668			--
Dividends paid

Net cash (used for) provided from financing activities		130,668			(1,764	)


CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment and		(401,805	)		(15,245	)
intangible assets
Share capital increase

Net cash used for investing activities		(401,805	)		(15,245	)

NET INCREASE / (DECREASE) IN CASH AND BANKS		(66,645	)		(22,602	)

CASH AND BANKS AT BEGINNING OF THE YEAR		70,289			50,556

CASH AND BANKS AT END OF THE PERIOD		3,644			27,954

NET INCOME FOR THE PERIOD – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months ended March 31, 2011, NET income for the period has increased by $135,725 from $(220,683) to (84,958). This can be attributed to the Management’s focus on reducing overhead costs to maximize profitability when revenues increase.

NET CASH GENERATED FOR OPERATING ACTIVITIES – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011,NET cash generated for operating activities was $204,492 compared to $(5,593) which is a increase of $198,899. 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 grows.

CASH FLOW FROM FINANCING ACTIVITES – For the first three months of the year, quarter ended March 31, 2012, as compared to the three months endedMarch 31, 2011, cash flow from financing activities was 130,668 compared to $(1,764) at March 31, 2011. This is due to aincrease in long term borrowings.

CASH POSITION. There was a NETdecrease in the cash and cash equivalents of $66,645 from the beginning of the period through March 31, 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.

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 March 31, 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 three 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 three months ended March 31, 2012, our Company has not made any changes to internal control over financial reporting.

PART II - OTHER INFORMATION

Subsequently, on April 10th2012 The Company entered into an agreement with Ronald George Murphy to convert debt for services as an Officer and President of World Wide Sales for the period January 1, 2012 to March 31, 2012 in exchange for the Company’s restricted Common Stock in the aggregate of 7,500,000 shares for an accrued amount of $37,500. The company owed him a balance of $184,913.40 at March 31, 2011

Subsequently, on April 10th 2012 The Company entered into an agreement with Andrew Stuart Brabin to convert debt for services as Chief Executive Officer for the period January 1, 2012 to March 31, 2012 in exchange for the Company’s restricted Common Stock in the aggregate of 7,500,000 shares for an accrued amount of $37,500. The company owed him a balance of $158,085.79 at March 31, 2011

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.

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). 101.INS tucn-20111231.xml XBRL Instance Document 101.SCH tucn-20111231.xsd XBRL Taxonomy Extension Schema Document 101.CAL tucn-20111231_cal.xml XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF tucn-20111231_def.xml XBRL Taxonomy Extension Definition Linkbase Document 101.LAB tucn-20111231_lab.xml XBRL Taxonomy Extension Labels Linkbase Document 101.PRE tucn-20111231_pre.xml XBRL Taxonomy Extension Presentation Linkbase Document PART III – REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM

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: May 10th 2012