Securetech Innovations, Inc. - Annual Report: 2021 (Form 10-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2021
12-31
or
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 000-55927
Securetech Innovations, Inc.
(Exact name of registrant as specified in its charter)
Wyoming (State or other jurisdiction of incorporation or organization) | 82-0972782 (I.R.S. Employer Identification Number) |
2355 Highway 36 West, Suite 400, Roseville, MN 55113
(Address of principal executive offices)
Tel: (651) 317-8990
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
N/A |
| N/A |
| N/A |
Securities registered pursuant to Section 12(g) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Common Stock, $0.001 par value |
| SCTH |
| OTC Pink Tier |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ¨ No x
Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ¨ | Accelerated Filer ¨ |
Non-Accelerated Filer x | Smaller Reporting Company x |
| Emerging Growth Company x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
As of June 30, 2021 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the voting stock held by non-affiliates of the registrant was $8,282,825, based upon the most recent cash sales price of $0.25 a share as of that date. This calculation does not reflect a determination that such persons are affiliates for any other purpose. Additionally, the registrant does not have non-voting common stock outstanding.
As of March 30, 2022, there were shares of our common stock, $0.001 par value issued and outstanding; 33,136,300 of these shares were held by non-affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibits incorporated by reference are referred under Part IV.
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TABLE OF CONTENTS
Item 1B. Unresolved Staff Comments18
Item 4. Mine Safety Disclosures19
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities20
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations24
Item 7A. Quantitative and Qualitative Disclosures About Market Risk31
Item 8. Financial Statements and Supplementary Data32
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure46
Item 9A. Controls and Procedures46
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections46
Item 10. Directors, Executive Officers and Corporate Governance47
Item 11. Executive Compensation49
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters51
Item 13. Certain Relationships and Related Transactions, and Director Independence51
Item 14. Principal Accounting Fees and Services53
Item 15. Exhibits, Financial Statements Schedules54
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PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements,” as such term is used within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our liquidity, expectations regarding the impact of the COVID-19 (Coronavirus) worldwide pandemic on our business, overall sales results, expectations regarding the length of pandemic’s business disruption. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by such forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in any forward-looking statements include the failure to receive material orders, our ability to successfully market and sell the products we develop, the effects of the COVID-19 pandemic, including general and overall levels of consumer, business, and economic confidence, the duration of the COVID-19 pandemic and its general severity, the pace of recovery following the COVID-19 pandemic, the effects on our supply chains, potential import and export tariffs or other restrictions that may be placed on our products by governments and regulatory agencies, and possible pricing pressure from market competition. Further information on our risk factors is contained in this prospectus under “Risk Factors” beginning on page 5. Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law.
These forward-looking statements represent our estimates and assumptions only as of the date of this prospectus and, except as required by law, we undertake no obligation, and expressly disclaim any responsibility, to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise after the date of this prospectus. We qualify all of our forward-looking statements by these cautionary statements.
As used in this prospectus, the terms "we," "us," "our," "SecureTech," “Registrant,” “Company,” and “Issuer” mean SecureTech Innovations, Inc. unless the context clearly requires otherwise.
Item 1. Business
Business Overview
SecureTech is an emerging growth company focused on developing and marketing advanced security and safety technologies. SecureTech’s products preserve life, protect property, and prevent crime. Under the Top Kontrol brand, SecureTech currently sells the world’s only anti-theft and anti-carjacking automobile security and safety system. Under its wholly-owned Piranha subsidiaries, SecureTech intends to develop and acquire secure green energy data centers, advanced cybersecurity technologies, and blockchain and cryptocurrency systems and platforms for mining, storage, and trading exchanges.
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Corporate Structure
The following diagram illustrates our corporate structure as of December 31, 2021:
Corporate History
SecureTech was incorporated under the laws of the State of Wyoming on March 2, 2017, under the name SecureTech, Inc. SecureTech amended its Articles of Incorporation on December 20, 2017, to change its name to SecureTech Innovations, Inc. On November 19, 2021 and November 25, 2021, SecureTech incorporated wholly-owned subsidiaries Piranha Blockchain, Inc. under the laws of the State of Wyoming and Piranha Blockchain, Ltd. under the International Business Company (IBC) laws of Anguilla, British West Indies, respectively.
Top Kontrol
Top Kontrol is the world’s most advanced anti-theft and anti-carjacking system currently available. Unlike our competitors’ products that only protect a vehicle from unattended theft, Top Kontrol takes vehicle security and passenger safety to the next level – it prioritizes the driver and passengers' safety. Top Kontrol is presently the only automobile security and personal safety system able to thwart an active carjacking attempt without any action by the driver.
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Key Advantages of Top Kontrol:
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| Anti-theft circuits actively prevent automobile theft and carjacking |
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| Automatically prevents theft although keys are in ignition and engine is idling |
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| Active and passive prevention of carjacking |
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| Does not interfere with vehicle’s other systems |
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| Compatible with most makes and models of cars and trucks |
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| Manual engine kill switch |
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| Key-based system prevents thieves from hacking wirelessly transmitted security codes |
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| Does not draw battery power – system works even with a disabled car battery |
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Retail Package Top |
| Retail Package Bottom |
For additional information on Top Kontrol or view product demonstration videos, please visit the Top Kontrol website at www.topkontrol.com or the Top Kontrol YouTube Channel, respectively.
Industry: Carjackings Skyrocketing
Carjackings more than doubled during 2020. Top Kontrol is presently the only known automobile safety device that can thwart an active carjacking attempt without any action by the driver. Below are just a few reports about this growing problem without any long-term solutions:
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| Minneapolis, MN police report carjackings up more than 537% in 2020 (source: ABC, December 12, 2020) |
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| Chicago, IL police report carjackings up more than 134% in 2020 (source: ABC7, December 4, 2020) |
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| Jackson, MS police report carjackings up more than 120% in 2020 (source: WLBT, December 24, 2020) |
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| New Orleans, LA police report carjackings up more than 153% in 2020 (source: 4WWL, December 9, 2020) |
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| Washington, DC police report carjacking up more than 141% in 2020 (source: WUSA, December 27, 2020) |
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Through the fiscal period ended September 30, 2021, carjackings continued climbing to historic all-time highs:
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| Minneapolis, MN police report carjackings up more than 222% in 2021 YTD (source: FOX9, May 20, 2021) |
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| Indianapolis, IN police report carjackings up more than 82% in 2021 YTD (source: Wish TV, August 9, 2021) |
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| Oakland, CA police report carjackings up more than 115% in 2021 YTD (source: OPD, June 2, 2021) |
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| Chicago, IL police report carjackings up more than 135% in 2021 YTD (source: Civic Federation, April 1, 2021) |
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| New Orleans, LA police report carjackings up more than 120% in 2021 YTD (source: KFLY10, June 14, 2021) |
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| Washington, DC police report carjacking up nearly 74% in 2021 YTD (source: Daily News, July 16, 2021) |
Competition
SecureTech faces formidable competition in every aspect of its business. Our company's success or failure will depend largely upon management's ability to develop competitive products and successfully market them to attract enough new customers, enabling us to generate sufficient revenues to become profitable.
SecureTech competes against better-established competitors with more significant financial resources and longer operating histories. Our competitors’ resources and market presence may give them considerable marketing, purchasing, and negotiating leverage advantages. Some of our better-known competitors include Viper (www.viper.com), Clifford (www.clifford.com), and OnStar (www.onstar.com). In addition to these known competitors, we are competing with other lesser-known competitors as well as competitors presently not known to us or possibly, not even formed yet.
We believe that our targeted industry is sufficiently large enough that we will be able to compete successfully against our competitors with our existing and future products. However, it is essential to note that the underlying product technology is constantly evolving and expanding with new competitors continuously innovating better products that could eventually outperform our then-offered products or, worse, possibly render them obsolete.
Manufacturing
SecureTech presently uses US-based contract manufacturers to manufacture its products, with final assembly performed at SecureTech’s Minnesota headquarters. SecureTech does not have any long-term or exclusivity agreements with any contract manufacturer and is free to change or negotiate with new contract manufacturers at its sole discretion.
Additionally, Management has been exploring the feasibility of establishing a warehouse and manufacturing facility in Florida once the ongoing COVID-19 pandemic has passed. Our goal with this location would be to facilitate international sales and exports while reducing overall manufacturing and shipping expenses.
SecureTech’s products proudly carry the “Made in the USA” designation.
Piranha Blockchain
In 2022, SecureTech intends to expand into advanced cybersecurity and blockchain technologies through its newly formed Piranha Blockchain subsidiaries (collectively, “Piranha”). Through Piranha, SecureTech intends to:
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| Build secure low-cost green energy data centers |
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| Offer advanced cybersecurity products to secure and protect client data, identity, and digital assets from theft and ransom |
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| Develop blockchain and cryptocurrency systems and platforms for mining, storage, and trading exchanges |
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Piranha intends to generate revenue through four potential sources:
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| Individual one-time product sales of cybersecurity hardware and applications |
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| Recurring monthly revenue from cybersecurity subscriptions and hosting services |
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| Cryptocurrency mining |
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| Transaction fees from cryptocurrency exchange trades and conversions into and from fiat currencies |
Piranha will pursue growth in this business expansion through a combination of internally developed products and technologies and strategic acquisitions.
Government Regulation
Our products are designed to meet all known existing or proposed governmental regulations. We believe that we currently meet current standards for approvals by government regulatory agencies for our products and services.
Top Kontrol was issued a Federal Communications Commission (FCC) Declaration of Conformity certification in March 2020.
Compliance with Environmental Laws
We believe there are no material issues or costs associated with our compliance with environmental laws. We did not incur environmental expenses in fiscal periods December 31, 2021 and 2020, nor do we anticipate environmental expenses in the foreseeable future.
Intellectual Property Rights and Proprietary Information
We operate in an industry where innovation, investment in new ideas, and protection of resulting intellectual property rights are essential drivers of success. We rely on various intellectual property protections for our products and technologies, including patent, trademark and trade secret laws, and contractual obligations. We pursue a policy of vigorously enforcing our intellectual property rights.
Patents that have been issued and/or licensed to SecureTech and their dates of issuance are:
·On May 7, 2013, Shongkawh, LLC, a related party controlled by our President and CEO, was issued US Patent No. 8,436,721 entitled “Automobile Theft Protection and Disablement System,” by the US Patent & Trademark Office (“USPTO”). This patent expires on March 19, 2030. SecureTech has the exclusive license for the use of this patent through its expiration date.
In addition to such factors as innovation, technological expertise, and experienced personnel, we believe robust product offerings that we continue to upgrade and enhance will keep us competitive. We will seek patent protection on significant technological improvements that we make. We have an ongoing policy of filing patent applications to seek legal protections for our products and technologies’ novel features. Before filing and granting patents, our policy is to disclose critical elements to patent counsel and maintain these features as trade secrets before product introduction. Patent applications may not result in issued patents covering all-important claims and could be denied in their entirety.
We also file for trade name and trademark protection when appropriate. We are the owner of federally registered trademarks, including SECURETECH INNOVATIONS® and TOP KONTROL®. Additionally, SecureTech has a pending trademark registration application with the USPTO for PIRANHA BLOCKCHAIN.
Our policy is to enter into nondisclosure agreements with each employee, consultant, or third party to whom any of our proprietary information may be disclosed. These agreements prohibit disclosing our confidential information to others during and after employment or working relationships.
Employees
As of December 31, 2021, we had no full-time or part-time employees; we have three non-paid founding executive officers and three commission-based independent sales representatives in our Roseville, Minnesota office.
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Available Information
We maintain a website with the address www.securetechinnovations.com. We make available free of charge through our Internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and any amendments thereto, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. We are not including the information on our website as a part of, nor incorporating it by reference into, this report. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers, including us, file electronically with the SEC. The SEC’s website address is www.sec.gov.
Item 1A. Risk Factors
An investment in SecureTech’s common stock involves a high degree of risk. An investor should only purchase SecureTech’s securities if they can afford to suffer the loss of their entire investment. Certain factors may have a materially adverse effect on our business, financial condition, and results of operations, including the risk factors described below. You should carefully consider all of the risks and uncertainties described below and elsewhere in this Annual Report on Form 10-K, as well as those risks disclosed in SecureTech’s other public filings, together with the other information contained in this report and SecureTech’s other public filings before making an investment decision regarding SecureTech’s securities. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe are not material may also become important factors that could adversely affect our business, financial condition, and results of operations, perhaps materially. If any of the following risks happen to occur, our business, financial condition, results of operation, and future prospects could be materially and adversely affected. In that event, the trading price of shares of our common stock could decline, and you could lose part or all of your investment. The risks discussed below also include forward-looking statements, and actual results and events may differ substantially from those discussed or highlighted in those forward-looking statements. For more information regarding forward-looking statements in this Annual Report, please see the Section entitled “Forward-Looking Statements” on Page 4 of this Annual Report on Form 10-K.
Risks Related to the COVID-19 (Coronavirus) Pandemic
The recent COVID-19 (Coronavirus) pandemic has impacted our operations and continues to adversely affect our business operations, financial performance, and results of operations, the extent of which is uncertain and difficult to predict.
The global spread of the COVID-19 pandemic has created significant business uncertainty for us and others, resulting in volatility and economic disruption. Additionally, the outbreak has resulted in local, state, national, and international government authorities implementing numerous measures to reduce the spread of COVID-19. Examples of such measures include travel bans and restrictions, quarantines, shelter-in-place, stay-at-home or total “lock-down” (or similar) orders, and business limitations and forced closures.
As a result of the COVID-19 pandemic, including the related responses from various government authorities, our business and operations have been impacted, including our employees being forced to work from home and avoid travel and meeting in public. We cannot predict the degree to, or the period over, which we will continue being affected by the COVID-19 pandemic and resulting governmental and other measures
Our business operations, financial performance, and results of operations could be further adversely affected in several ways, including, but not limited to, the following:
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| reduced consumer demand for our products and adverse effects on the discretionary spending patterns of potential customers, including their general ability to afford our products; |
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| further disruptions to our operations, including any additional closures or “lock-down” of our office building, which may affect our ability to develop, market, and sell our products; |
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| restricting our ability to train and certify a sufficient number of automobile technicians as Top Kontrol Certified Technicians on how to install and maintain our products; |
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| delaying our planned warehouse and production facility in Florida to better facilitate international sales and exports of our products; |
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| interruptions to our supply chain and suppliers’ respective businesses; |
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| disruptions to our retail partners, including product installation businesses, retailers, wholesalers, distributors, and other third-party participants in retail channels; and |
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| increase in the cost or the difficulty of obtaining debt or equity financing could affect our financial condition or our ability to fund operations or future investment opportunities. |
The spread of COVID-19 has caused most businesses, including ours, to modify business practices, including travel, employee work locations, and the cancellation of physically participating in meetings, events, and conferences. We may be forced to take further actions as may be mandated by government authorities or that we determine are in the best interests of our employees, customers, and business partners. Further, key personnel could contract COVID-19, hindering their availability and productivity.
The degree to which the COVID-19 pandemic impacts our operations, business, financial results, liquidity, and financial condition will depend on future developments, which are highly uncertain, continuously evolving, and cannot be predicted. This includes, but is not limited to, the duration and spread of the pandemic, its severity, actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and business operating conditions can resume.
Risks Related to Our Financial Condition
We lack an operating history and have losses which we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, our business will fail.
We were incorporated on March 2, 2017 and have incurred ($455,731) in losses through December 31, 2021. We have not achieved profitability and expect to continue incurring net losses into subsequent fiscal periods. We anticipate incurring significant operating expenses and, as a result, will need to generate substantial revenues to achieve profitability, which may never occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability on an ongoing basis, which could cause us to go out of business.
Expenses required to operate as a public company will reduce funds available to implement our business plan and could adversely affect our results of operations, cash flow, and overall financial condition.
Operating as a public company is considerably more expensive than operating as a private company, including additional funds required to obtain outside assistance from legal, accounting, investor relations, or other professionals that could be costlier than planned. It may be necessary to hire additional staff to comply with ongoing SEC reporting requirements. We estimate that the cost of maintaining our SEC reporting status will be approximately $175,000 for the fiscal period ending December 31, 2022. As our business grows and develops, our financial statements and our SEC filings will become more complex. Increases in such complexity will likely increase our overall compliance expenses – potentially substantially – which could have an unexpected material adverse effect on our business, results of operations, and overall financial condition.
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There is substantial uncertainty as to whether we will continue operations. If we discontinue operations, you could lose your entire investment.
Our independent registered public accounting firm has discussed their uncertainty regarding our business operations in their audit report dated March 30, 2022, which is part of the financial statements that are part of this Annual Report on Form 10-K. This means that there is substantial doubt that we can continue as an ongoing business for the next 12 months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such, we may have to cease operations, and you could lose your entire investment.
We may need additional capital in the future, but there is no assurance that funds will be available on acceptable terms, or at all.
We may need to raise additional funds to achieve growth and fund other business initiatives. This financing may not be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders if raised through additional equity offerings. Additionally, any securities issued to raise funds may have rights, preferences, or privileges senior to those of existing stockholders. If adequate funds are not available, or are not available on acceptable terms, our ability to expand, develop or enhance services or products, or respond to competitive pressures may be materially limited.
Risks Related to Our Industry
Our industry is highly competitive, and as an emerging growth company with a new brand, we may be at a disadvantage to our competitors.
Our industry is highly competitive in general. We are an emerging growth company with limited financial resources and a new brand with limited recognition. Our competitors, both established and future unknown competitors, have better brand recognition and, in most cases, substantially greater financial resources than we have. Our ability to successfully compete in our industry depends on many factors, both within and outside our control. These factors include the following:
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| our success in designing and developing new or enhanced products; |
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| our ability to address the changing needs and desires of retailers and consumers; |
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| the pricing, quality, performance, reliability, features, ease of installation and use, and diversity of our products; |
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| the quality of our customer service; |
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| product or technology introductions by our competitors; and |
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| the ability of our contract manufacturing partners to deliver products on time, on price, and with acceptable quality. |
If we are unable to effectively compete on a continual basis or unforeseen competitive pressures arise, such inability to compete could have a material adverse effect on our business, results of operations, and overall financial condition.
Risks Related to Our Business
Our products may not achieve market acceptance, thereby reducing the chance for success.
We are only in the early stages of producing and marketing our first-generation Top Kontrol product. It is unclear whether this product and its features or other unanticipated events may result in general sales that are lower than anticipated. If this happens, it could force us to limit our expenditures on research and development, advertising, and general company requirements for improving and expanding our product and service offerings. We cannot guarantee consumer demand or interest in our current or future product or service offerings, which could have a material adverse effect on our business, results of operations, and overall financial condition.
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If the market chooses to buy our competitors’ products and services, SecureTech may fail.
Although we believe our product offerings will become commercially viable, there is no verification by the marketplace that our products will be accepted by or purchased by customers. If the market chooses to buy our competitors’ products, it may be more difficult, if not impossible, for us to become profitable, which would substantially harm our business and, possibly, cause it to fail.
Consumer trends, seasonal fluctuations, and general global economic conditions and outlook may cause unpredictable operating results.
Our operating results may fluctuate significantly from period to period due to various factors, including purchasing patterns of customers, competitive pricing, and general economic conditions. There is no assurance that we will be successful in marketing our products or that any revenue from our products' sales will be significant. Consequently, our revenues may vary significantly by quarter, and our operating results may experience substantial fluctuations making it difficult to value our business and could lead to extreme volatility in our future share price.
We may be unable to protect our proprietary rights and intellectual property.
Our future success depends in part on our proprietary technology, technical know-how, and other intellectual property. We rely on intellectual property laws, confidentiality procedures, and contractual provisions, such as nondisclosure terms, to protect our intellectual property. Others may independently develop similar technology, duplicate our products, or design around our intellectual property rights. Also, unauthorized parties may attempt to copy aspects of our products and technologies or obtain and use information that we regard as proprietary. Any of these events could significantly harm our business, financial condition, and operating results.
We also rely on technologies that we acquire from others. We may rely on third parties for further required technologies. We may purchase a product’s logic component or other technological devices from outside sources, which may require payment of annual fees to enable us to get updates/upgrades and technical support to the logic portion of the system or device. We may find it necessary or desirable in the future to obtain licenses or other rights relating to one or more of our products or current or future technologies. These licenses or other rights may not be available on commercially reasonable terms or at all. The inability to obtain specific licenses or other rights or obtain such licenses or rights on favorable terms, or the need to engage in litigation regarding these matters, could have a material adverse effect on our business, financial condition, and operating results. Moreover, the use of intellectual property licensed from third parties may limit our ability to protect our products' proprietary rights.
While no current lawsuits are filed against SecureTech, the possibility exists that a claim of some kind may be made in the future.
While no current lawsuits are filed against us, the possibility exists that a claim of some kind may be made in the future.
Presently we have no general liability insurance policy. While we intend to seek such coverage during the current fiscal year, we can offer no assurances that we will successfully be able to obtain such coverage or, if such coverage is offered to us, that we will be able to afford the annual premiums. Further, even with general liability coverage, there can be no guarantees that the coverage would fully protect us from legal claims arising from a future lawsuit, which could have a material adverse effect on our results of operations and financial condition.
Our business's success depends heavily on key personnel, particularly Kao Lee, and his business experience and understanding of our industry. SecureTech would likely fail if we were to lose his services.
Our business's success depends heavily upon our principal executive officer Kao Lee's abilities and experience. The loss of Mr. Lee would have a significant and immediate impact on our business, results of operations, and overall financial condition. Further, the loss of Mr. Lee would force us to seek a replacement or replacements who may have less general business experience and, in particular, experience in our industry, fewer industry contacts, and less understanding of our overall business plan. We can make no assurances that we will be able to find a suitable replacement should Mr. Lee depart, which could force us to curtail operations and/or cease operations, whereby you could lose your entire investment.
Mr. Lee is not presently covered by an employment agreement nor is he subject to a non-compete agreement that would survive his employment termination. Mr. Lee can terminate his relationship with us at any time without cause. Further, we do not
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carry “key person” insurance on any employee, including Mr. Lee. The departure of Mr. Lee would most likely have a severe and negative impact on our overall business and cause us to cease operations, whereby you could lose your entire investment.
In addition to our dependency on Mr. Lee’s continued services, our future success will also depend on our ability to attract and retain additional future key personnel. We face intense competition for these such qualified individuals from well-established and better-financed competitors. We may not be able to attract talented new employees or retain existing employees, which may have a material adverse effect on our results of operations and financial condition.
Our officers and directors currently control an aggregate of approximately 70.6% of our eligible votes in all voting matters. Accordingly, our officers and directors can essentially determine and control all corporate decisions, even if such decisions may not be in the best interest of minority shareholders.
Our officers and directors currently control an aggregate of 80,000,000 votes in all voting matters, or approximately 70.6%, of all eligible votes. Accordingly, our officers and directors can essentially determine the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. Our directors' interests may differ from the interests of the other shareholders and thus result in corporate decisions that are disadvantageous to other shareholders.
Our officers and directors may be subject to conflicts of interest.
Our officers and directors have potential conflicts of interest in their dealings with us. Circumstances under which conflicts of interest include:
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| We have no independent directors, so the Board of Directors is free to establish their own compensation packages without the guidance of a Compensation Committee; |
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| Future compensation agreements will not be negotiated at arm’s-length as would typically occur if such agreements were with unaffiliated third parties; |
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| Acquisitions and purchases or sales of assets and other similar transactions can be made without due diligence or extended negotiation; and |
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| Business combinations or the implementation of anti-takeover “poison pill” preventative measures without proper due diligence or consideration. |
We have not formulated a policy for potential conflicts of interest that may arise between us and our officers and directors. If a potential conflict of interest arises and cannot be resolved, the result could be contrary to the interests of other shareholders and prevent us from ever achieving profitability, have a negative impact on our overall business, and result in you losing all or part of your investment.
All of our officers and directors have other significant outside business interests and will be able to devote only a portion of their professional time to SecureTech’s operations. As such, our business could fail if any of them are unable or unwilling to devote a sufficient amount of time to our business.
The responsibility of developing our core business, securing the financing we need, both primary and expansion, and fulfilling the reporting requirements of a public company all fall upon our officers and directors. As of January 1, 2022, our officers and directors devote the following amount of their overall business time to our business:
Officer/Director |
| Percentage of Overall Business Time |
|
|
|
Kao Lee |
| 100% |
Anthony Vang |
| 50% |
Abdikarim H. Farah |
| 25% |
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It is also important to consider that none of our officers or directors are presently under any employment agreements with any of their business interests, including our business. If they were to enter into such an agreement with an outside business interest, they could be forced to resign from our business or devote even less time to our business interests than they presently do.
If any of our officers or directors are unable to fulfill any aspect of their duties or they decide to start spending more time on their competing business interests, we may experience a shortfall or complete lack of revenue resulting in little or no profits and the eventual closure of our business.
We depend on contract manufacturers who may not have adequate capacity to fulfill our needs or meet our quality and delivery objectives and timetables.
We do not own our production lines or manufacturing facilities. We manufacture our products through third-party contract manufacturers.
Our current reliance on these third-party contract manufacturers involves significant risks, including reduced control over quality and logistics management, the potential lack of adequate capacity, and the discontinuance of the contractors’ assembly processes. Potential financial instability at our contract manufacturers could result in us needing to find new suppliers, potentially increasing our costs and delaying our product and installation deliveries. Our contractor manufacturers could also choose to discontinue contracting to build our products for any variety of reasons, with or without cause. Consequently, we may experience delays in the timeliness, quality, and adequacy in product and installation deliveries, any of which could have a material adverse effect on our business, results of operations, and overall financial condition.
We incur significant additional expenses and management’s time relating to SEC reporting obligations and SEC compliance requirements, and our management has no experience in such matters.
Our officers and directors are responsible for managing us, including complying with our SEC reporting obligations, maintaining disclosure controls and procedures, and preserving internal control over financial reporting. These public reporting requirements and controls are constantly changing and sometimes require us to obtain outside assistance from legal, accounting, or other compliance professionals, which may substantially increase our costs of remaining compliant with these reporting requirements. Should we fail to comply with these reporting requirements and internal controls and procedures, we may be subjected to securities law violations that may result in additional compliance costs or costs associated with SEC judgments or fines, both of which will increase our costs and negatively affect our potential profitability and our ability to conduct our business.
Because we do not have an audit or compensation committee, shareholders will have to rely on our board of directors, which is not independent, to perform these functions.
We do not have an audit or compensation committee or board of directors that is composed of independent directors. Our officers and directors perform the functions of these traditional corporate committees. Because none of our directors are deemed independent, there is a potential conflict between their and/or our interests and our shareholders’ interests since the above will participate in discussions concerning management compensation and audit issues that may affect management decisions. Until we have an audit committee or independent directors, there may be less oversight of management decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
We have agreed to indemnify our officers and directors against lawsuits to the fullest extent of the law.
We are a Wyoming corporation. Wyoming law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. Wyoming law also authorizes Wyoming corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been an officer or director. Our organizational documents provide for this indemnification to the fullest extent permitted by Wyoming law.
We currently do not maintain any insurance coverage. In the event that we are found liable for damages or other losses, we would incur substantial and protracted losses in paying any such claims or judgments. In the past, we have not maintained liability insurance but intend to acquire such coverage immediately upon resources becoming available. There is no guarantee that we can secure such coverage or that any insurance coverage, if ever secured, would protect us from any damages or loss claims filed against it.
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Risks Related to Market for Our Common Stock
Investing in SecureTech is a risky investment and could result in the loss of your entire investment.
Purchasing shares in SecureTech is speculative in nature and involves significant risks. Our shares should not be purchased by any person who cannot afford the loss of their entire investment. SecureTech’s business plan and objectives are also speculative, and we may not achieve those objectives successfully. Shareholders in SecureTech may be unable to realize a substantial return on their investment or any return whatsoever and may lose their entire investment. For this reason, each prospective investor should read this Annual Report on Form 10-K and all of its exhibits carefully and consult with their attorney, business advisor, and/or investment advisor.
Even though we have a ticker symbol on the OTC Pink Tier of the OTC Markets Group, Inc., no market for our shares of common stock has developed, and it is possible that a market may never develop, which would render investors’ investment illiquid. In the event a market may develop in the future, such future market prices for our shares may be volatile.
Our common stock was assigned the trading symbol “SCTH” on the OTC Pink Tier of the OTC Markets Group, Inc. on March 30, 2021, but a market has not developed. As of March 30, 2022, not a single share of our common stock has traded on the OTC Pink Tier of the OTC Market Group, Inc. We can offer no assurances that a market will ever develop for shares of our common stock.
Further, in the event a market may develop for shares of our common stock, the market price for our shares may be highly volatile and subject to wide fluctuations in response to various factors, including the following:
• |
| our failure to meet the expectations of the investment community or our estimates of our future results of operations; |
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|
• |
| industry trends and the business success of our customers; |
|
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|
• |
| loss of one or more key customers; |
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|
• |
| strategic moves by our competitors, such as product or service announcements or acquisitions; |
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|
• |
| regulatory developments; |
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|
• |
| litigation; |
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|
• |
| general economic conditions; |
|
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|
• |
| other domestic and international macroeconomic factors unrelated to our performance; and |
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|
• |
| any of the other previously noted risk factors. |
Moreover, the OTC Pink Tier of the OTC Market Group, Inc. (“OTC Pink”) marketplace is not a recognized stock exchange. Trading of securities on the OTC Pink is often more sporadic and volatile than trading securities listed on a quotation system such as NASDAQ or a stock exchange such as NYSE. We can offer no assurances that shares of our common stock will ever obtain a listing on a recognized stock exchange such as OTCQB, OTCQX, NASDAQ, or NYSE.
In the event a market never develops, your investment in our common stock would remain very illiquid, and you may not be able to get your original investment returned, much less realize a profit.
We do not intend to pay any dividends on our common stock. Therefore, there are limited ways to profit from an investment in SecureTech Innovations, Inc.
We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we may seek additional funding in the future, our future funding sources may likely prohibit us from paying any dividends. Because we do not intend to declare dividends, any gain on an investment in our shares of common stock will need to come through the appreciation of our common stock’s share price, for which we can give no assurances that our common
15
stock will ever appreciate in value and, even if it does appreciate in value, that you will be able to sell your shares of our common stock for a profit.
We have certain anti-takeover provisions and may issue additional securities, including common and preferred shares, without shareholder consent which may make it difficult, if not impossible, to replace or remove our current management, and could also result in significant dilution to existing investments in our common stock.
Our Articles of Incorporation, as amended, authorizes the issuance of up to 500 million shares of common stock and of up to 50 million shares of blank check preferred stock with such rights and preferences as may be determined from time to time by our Board of Directors. Our Board of Directors may, without requiring shareholder approval, issue shares of preferred stock with dividends, liquidation, conversion, voting, or other rights that could supersede and/or adversely affect the voting power and/or other rights of the holders of our common stock. The ability of our Board of Directors to issue shares of common stock and/or preferred stock may prevent any shareholder attempt to replace or remove current management and/or could make it extremely difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. Additionally, the issuance of additional common stock or preferred stock in the future may significantly reduce your proportionate ownership and voting power.
It is important to note that as of March 30, 2022, we could issue up to an additional 386,663,700 shares of common stock without shareholder consent.
We are subject to penny stock regulations and restrictions, and you may have difficulty selling shares of our common stock.
The Securities and Exchange Commission has adopted Rule 15g-9, which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
• |
| that a broker or dealer approve a person's account for transactions in penny stocks; and |
|
|
|
• |
| the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. |
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
• |
| obtain financial information, investment experience, and investment objectives of the person; and |
|
|
|
• |
| make a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:
• |
| sets forth the basis on which the broker or dealer made the suitability determination; and |
|
|
|
• |
| that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to sell shares of our common stock and/or cause a decline in the market value of our stock.
Disclosure also must be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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Our common stock is presently deemed a “penny stock.” The continued application of the “penny stock” rules to our common stock could continue to restrict trading and liquidity in our common stock, adversely affect the market price of our common stock, or cause an increase in the transaction costs related to our common stock.
Sales of our common stock under Rule 144 could reduce our stock price.
From time to time, certain of our stockholders may be eligible to sell some or all of their shares of our common stock through ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement (which disappears after one year). Affiliates may sell after six months subject to the Rule 144 volume, manner of sale, current public information, and notice requirements.
As of March 30, 2022, we had 111,636,300 shares of our common stock issued and outstanding. Of these shares currently issued and outstanding:
• |
| 24,808,000 are freely tradable without restrictions (commonly referred to as the “public float”); |
|
|
|
• |
| 80,000,000 held by affiliates and are subject to the restrictions and sale limitations imposed by Rule 144; and |
|
|
|
• |
| 6,828,300 held by non-affiliates and are subject to the restrictions and sale limitations imposed by Rule 144. |
In addition to the preceding, there are 1,317,900 outstanding warrants to purchase shares of our common stock. These warrants have exercise prices ranging from $0.30 to $0.50 a share and expire between March 31, 2022, and December 31, 2022. Holders of these warrants can exercise them at any time of their choosing. Presently, these warrants would convert into additional shares of common stock subjected to the restrictions under Rule 144.
The eventual availability for sale of substantial amounts of our common stock under Rule 144 could adversely affect the then-prevailing market prices for our securities and cause you to lose most, if not all, of your investment in our business.
We are classified as an “emerging growth company” as well as a “smaller reporting company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that apply to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of specific accounting standards until those standards would otherwise apply to private companies.
We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
Notwithstanding the above, we are also currently a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. In the event that we are still considered a “smaller reporting company,” at such time are we cease being an “emerging growth company,” the disclosure we will be required to provide in our SEC filings will increase, but will still be less than it
17
would be if we were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” can provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only be required to provide two years of audited financial statements in annual reports. Reduced disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Because we are not subject to compliance with rules requiring the adoption of specific corporate governance measures, our shareholders have limited protections against interested director transactions, conflicts of interest, and similar matters.
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and NYSE AMEX Equities exchanges, and the Nasdaq Stock Market, because of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities which are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than necessary, we have not yet adopted these measures.
Further, we do not currently have independent audit or compensation committees. As a result, our Board of Directors has the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our shareholders without protections against interested director transactions, conflicts of interest and similar matters, and investors may be reluctant to provide us with funds necessary to expand our operations.
We have elected to use the extended transition period for complying with the new or revised accounting standards under Section 102(b)(2)(B) of the JOBS Act.
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
As an issuer of “penny stock,” the protection provided by the federal securities laws relating to forward-looking statements does not apply to us.
Although the federal securities law provides a safe harbor for forward-looking statements made by a public company that files periodic reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, if we remain a penny stock, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us contained a material misstatement of fact or was misleading in any material respect, which could result in potential litigation or regulatory actions taken against us.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our principal executive offices are located at 2355 Highway 36 West, Suite 400, Roseville, MN 55113. We lease this space for $1,035 per month on a month-to-month basis for the time being.
We do not hold ownership or leasehold interest in any other property or equipment.
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Item 3. Legal Proceedings
During the past ten years, no director, person nominated to become a director or executive officer, or promoter of SecureTech has been involved in any legal proceeding that would require disclosure hereunder.
From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. However, litigation is subject to inherent uncertainties for which the ultimate outcome cannot be predicted. Any adverse result in these or other legal matters could arise and cause harm to our business. We currently are not a party to any claim or litigation.
Item 4. Mine Safety Disclosures
Not applicable.
[This space intentionally left blank]
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
Our common stock was assigned the trading symbol “SCTH” on the OTC Pink Tier of the OTC Market Group, Inc. on March 30, 2021. As of March 30, 2022, a market has not developed for our common stock. We can offer no assurances that a market will ever develop for shares of our common stock. Our common stock's most recent quoted bid price was $1.20 a share on March 30, 2022.
Holders of Record
As of March 30, 2022, we had 111,636,300 shares of our common stock issued and outstanding held by approximately 102 stockholders of record.
Dividend Policy
We have never declared or paid cash dividends. We currently intend to retain all future earnings for our business's operation and expansion and do not anticipate paying cash dividends on the common stock in the foreseeable future. Any payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our results of operations, earnings, capital requirements, contractual restrictions, and other factors deemed relevant by our directors.
Penny Stock Regulations and Restrictions on Marketability
The SEC has adopted Rule 15g-9, which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
• |
| that a broker or dealer approve a person's account for transactions in penny stocks; and |
|
|
|
• |
| the broker or dealer receives a written agreement to the transaction from the investor, setting forth the identity and quantity of the penny stock to be purchased. |
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
• |
| obtain financial information, investment experience, and investment objectives of the person; and |
|
|
|
• |
| make a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, before any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:
• |
| sets forth the basis on which the broker or dealer made the suitability determination; and |
|
|
|
• |
| that the broker or dealer received a signed, written agreement from the investor before the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to sell shares of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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Our common stock is presently deemed a “penny stock.” The continued application of the “penny stock” rules to our common stock could limit the trading and liquidity of our common stock, adversely affect the market price of our common stock, or cause an increase in the transaction costs related to our common stock.
Common Stock
Our Articles of Incorporation, as amended, authorizes us to issue up to 500,000,000 shares of common stock, $0.001 par value. Each holder of our common stock is entitled to one (1) vote for each share held of record on all voting matters we present for a vote of stockholders, including the election of directors. Holders of common stock have no cumulative voting rights or preemptive rights to purchase or subscribe for any stock or other securities. There are no conversion rights, redemption, or sinking fund provisions with respect to our common stock. All shares of our common stock are entitled to share equally in dividends from sources legally available when, and if, declared by our Board of Directors.
Our Board of Directors is authorized to issue additional shares of common stock not to exceed the amount authorized by the Articles of Incorporation, on such terms and conditions and for such consideration as the Board may deem appropriate without further stockholder action.
In the event of our liquidation or dissolution, all shares of our common stock are entitled to share equally in our assets available for distribution to stockholders. However, the rights, preferences, and privileges of the holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of preferred stock that our Board of Directors may decide to issue in the future.
As of March 30, 2022, we had 111,636,300 shares of common stock issued and outstanding.
Preferred Stock
Our Articles of Incorporation, as amended, authorizes us to issue up to 50,000,000 shares of preferred stock, $0.001 par value. Our Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges, and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. We believe that the Board of Directors’ power to set the terms of, and our ability to issue, preferred stock will provide flexibility in connection with possible financing or acquisition transactions in the future. However, the issuance of preferred stock could adversely affect the voting power of holders of common stock and decrease the amount of any liquidation distribution to such holders. The presence of outstanding preferred stock could also have the effect of delaying, deterring, or preventing a change in control of our company.
As of March 30, 2022, we had -0- shares of preferred stock issued or outstanding.
Share Purchase Warrants
As of March 30, 2022, we had the following share purchase warrants issued and outstanding. The following table includes each warrant’s exercise price and expiration date:
Exercise Price |
| Number Outstanding |
| Expiration Date | |
|
|
|
|
|
|
$ | 0.30 |
| 439,300 |
| March 31, 2022 |
$ | 0.40 |
| 439,300 |
| June 30, 2022 |
$ | 0.50 |
| 439,300 |
| December 31, 2022 |
|
|
| 1,317,900 |
|
|
Warrant holders have no voting rights, no liquidation preference, and no dividends will be declared on the warrants.
Options
We have not issued and do not have any outstanding options to purchase shares of our stock.
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Convertible Securities
As of December 31, 2021, and March 30, 2022, we had no convertible or derivative securities issued or outstanding.
Shares Eligible for Future Sale
From time to time, certain of our stockholders may be eligible to sell some or all of their shares of our common stock through ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement (which disappears after one year). Affiliates may sell after six months subject to the Rule 144 volume, manner of sale, current public information, and notice requirements.
As of March 30, 2022, we had 111,636,300 shares of our common stock issued and outstanding. Of these shares currently issued and outstanding:
• |
| 24,808,000 are freely tradable without restrictions (commonly referred to as the “public float”); |
|
|
|
• |
| 80,000,000 held by affiliates and are subject to the restrictions and sale limitations imposed by Rule 144; and |
|
|
|
• |
| 6,828,300 held by non-affiliates and are subject to the restrictions and sale limitations imposed by Rule 144. |
In addition to the preceding, there are 1,317,900 outstanding warrants to purchase shares of our common stock. These warrants have exercise prices ranging from $0.30 to $0.50 a share and expire between March 31, 2022, and December 31, 2022. Holders of these warrants can exercise them at any time of their choosing. Presently, these warrants would convert into additional shares of common stock subjected to the restrictions under Rule 144.
The eventual availability for sale of substantial amounts of our common stock under Rule 144 could adversely affect the then-prevailing market prices for our securities and cause you to lose most, if not all, of your investment in our business.
Securities Authorized for Issuance Under Equity Compensation Plans
As of March 30, 2022, we did not have any authorized Equity Compensation Plans.
Transfer Agent
Globex Transfer, LLC
780 Deltona Blvd., Ste. 201
Deltona, FL 32725
(813) 344-4490 Phone
(386) 267-3124 Fax
www.globextransfer.com
Recent Sales of Unregistered Securities
Set forth below is information regarding the issuance and sales of securities without registration since inception on March 2, 2017 through March 30, 2022.
On March 2, 2017, we issued 75,000,000 shares of common stock, $0.001 par value, to Kao Lee in consideration of his services to us as an officer and director. We issued these shares as Founder’s Shares with a value of $-0-. In connection with this issuance, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of Mr. Lee’s relationship with us, he had access to all relevant information relating to our business and represented that they each had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
On March 2, 2017, we issued 5,000,000 shares of common stock, $0.001 par value, to Anthony Vang in consideration of his services to us as an officer and director. We issued these shares as Founder’s Shares with a value of $-0-. In connection with this issuance, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the
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Securities Act as a transaction by an issuer not involving any public offering. By virtue of Mr. Vang’s relationship with us, he had access to all relevant information relating to our business and represented that they each had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
On March 2, 2017, we issued an aggregate of 95,000,000 shares of common stock to four consultants in consideration of their services in lieu of cash. We issued these shares as Founder’s Shares with a value of $-0-. In connection with these issuances, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of their relationship with us, these consultants had access to all relevant information relating to our business and represented that it had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
On November 15, 2017, we issued 100,000 shares of common stock to a consultant in consideration of his services in lieu of cash. We issued these shares as Founder’s Shares with a value of $-0-. In connection with these issuances, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of their relationship with us, these consultants had access to all relevant information relating to our business and represented that it had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
On November 15, 2017, we issued 1,000,000 shares of common stock, $0.001 par value, to Abdikarim Farah in consideration of his services to us as an officer. We issued these shares as Founder’s Shares with a value of $-0-. In connection with this issuance, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of Mr. Farah’s relationship with us, he had access to all relevant information relating to our business and represented that they each had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
On January 15, 2018, we issued 200,000 shares of common stock to a consultant in consideration of his services in lieu of cash. We issued these shares with a value of $6,000.00, or $0.03 a share. In connection with these issuances, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of their relationship with us, these consultants had access to all relevant information relating to our business and represented that it had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.
Between December 8, 2017 and February 7, 2018, we issued an aggregate of 13,703,000 shares of common stock, $0.001 par value, to 47 investors in exchange for an aggregate of $411,090, or $0.03 a share, in cash. The offers, sales, and issuances of these securities were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated under Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.
On October 19, 2018, we mutually rescinded two outstanding consulting agreements with Taurus Financial Partners, LLC (“Taurus”) and Atlas Management, Ltd. (“Atlas”). Pursuant to the associated Mutual Termination and Release of Liability Agreements signed by all parties, Taurus and Atlas returned 7,500,000 and 10,000,000 shares of our common stock, respectively. SecureTech’s Board of Directors subsequently canceled these shares.
On March 9, 2019, we mutually rescinded an outstanding consulting agreement with Seaside Advisors, LLC (“Seaside”). Pursuant to the associated Mutual Termination and Release of Liability Agreement signed by all parties, Seaside returned 2,500,000 shares of our common stock. SecureTech’s Board of Directors subsequently canceled these shares.
23
Between February 19, 2020 and June 30, 2020, we issued an aggregate of 439,300 Units of our securities. Each Unit was comprised of the following securities:
Security Component |
| Warrant Exercise Price ($) |
| Warrant Expiration Date |
|
|
|
|
|
One Share of Common Stock |
| Fully Paid and Non-Assessable |
| N/A |
One Purchase Warrant |
| $0.20 |
| June 30, 2021 |
One Purchase Warrant |
| $0.30 |
| December 31, 2021 |
One Purchase Warrant |
| $0.40 |
| June 30, 2022 |
One Purchase Warrant |
| $0.50 |
| December 31, 2022 |
These Units were sold to 12 investors in exchange for an aggregate of $65,894, or $0.15 a Unit, in cash. The offers, sales, and issuances of these securities were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated under Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.
Between April 14, 2021 and August 20, 2021, we issued an aggregate of 889,000 shares of common stock, $0.001 par value, to 37 investors in exchange for an aggregate of $222,250, or $0.25 a share, in cash. The offers, sales, and issuances of these securities were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated under Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions.
On September 28, 2021, SecureTech canceled an aggregate of 58,000,000 shares of its common stock.
On December 31, 2021, a Warrant holder exercised 5,000 of his $0.20 Stock Purchase Warrants into 5,000 shares of SecureTech’s common stock. For this warrant exercise, the Warrant holder paid $1,000, or $0.20 a share.
On December 31, 2021, 434,300 outstanding $0.20 Stock Purchase Warrants expired unexercised.
On February 17, 2022, SecureTech canceled an aggregate of 1,700,000 shares of its common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
During each month within the fourth quarter of the fiscal year ended December 31, 2021, neither we nor any “affiliated purchaser,” as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our common stock or other securities.
Item 6. [Reserved]
Not applicable.
Item 7. 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 the financial statements and the related notes, and other information that are included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements due to a variety of factors, including without limitations those set forth under the cautionary note regarding “Forward-Looking Statements” contained elsewhere in this Form 10-K. Additionally, you should read the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
24
SecureTech is an emerging growth company focused on developing and marketing advanced security and safety technologies. SecureTech’s products preserve life, protect property, and prevent crime. Under the Top Kontrol brand, SecureTech currently sells the world’s only anti-theft and anti-carjacking automobile security and safety system. Under its wholly-owned Piranha subsidiaries, SecureTech intends to develop and acquire secure green energy data centers, advanced cybersecurity technologies, and blockchain and cryptocurrency systems and platforms for mining, storage, and trading exchanges.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us upon which to base an evaluation of our performance. We are an emerging growth business with limited operating history. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns, such as increases in marketing costs, increases in administrative expenditures associated with daily operations, increases in accounting and audit fees, and increases in legal fees related to filings and regulatory compliance.
As of December 31, 2021, we had incurred ($455,731) in losses since our inception on March 2, 2017. We have not achieved profitability and expect to continue incurring net losses into subsequent fiscal periods. We anticipate incurring significant operating expenses and, as a result, will need to generate substantial revenues to achieve profitability, which may never occur. Even if we do achieve profitability, we may be unable to sustain or increase profitability on an ongoing basis, which could cause us to go out of business.
To become profitable and competitive, we must successfully sell our current product, Top Kontrol, and continue innovating and developing new products, technologies, and services that the marketplace will accept. We anticipate relying on equity sales of our common stock to continue to fund our business operations until we can generate sufficient revenues to cover our operating expenses, which may never happen. Issuances of additional shares will result in dilution to our then existing stockholders. There is no assurance that we will be able to make any additional sales of our equity securities or arrange for debt or other financings to fund our planned business activities. We may also rely on loans from our management or other significant shareholders. However, there are no assurances that management or any of our significant shareholders will provide us with any additional funds in the future.
We are continually exploring new financing sources to meet our need for additional cash, including raising funds through sales of our equity securities and loans. We cannot provide any assurances that our efforts to secure additional financing will be successful. We have no guarantee that future funding will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Further, future equity financing could result in additional and substantial dilution to existing shareholders.
Results of Operations
Comparison of Fiscal Years Ended December 31, 2021 and 2020
The following table sets forth the results of our operations for the fiscal years ended December 31, 2021 and 2020.
|
| Fiscal Year Ended December 31, | ||
|
|
2021 |
|
2020 |
Sales | $ | 31,713 | $ | 20,266 |
Cost of goods sold |
| (5,882) |
| (5,882) |
Gross profit |
| 14,384 |
| 14,384 |
Operating expenses |
| (78,825) |
| (78,825) |
Loss from operations |
| (64,441) |
| (64,441) |
Net loss | $ | (64,441) | $ | (64,441) |
Sales
Sales for the fiscal years ended December 31, 2021 were $31,713, compared to $20,266 for the same period of 2020. This $11,447, or 56.5%, increase in sales is the result of having Top Kontrol available for purchase for the entire fiscal year. All sales were attributable to Top Kontrol.
25
The ongoing COVID-19 pandemic negatively impacted our early Top Kontrol sales efforts. In particular, we have encountered numerous delays in attracting sales personnel and automotive technicians into our training and certification program. We cannot predict with any certainty how long this pandemic will continue to hamper our Top Kontrol sales and training expansion efforts.
Because we did not begin marketing and selling Top Kontrol until after this pandemic began, we have no historical perspective to quantify or speculate on the extent to which COVID-19 affects our overall sales and financial condition.
Cost of Goods Sold
Our cost of goods sold consists primarily of purchasing components and circuitry from various vendors then utilizing third-party contract manufacturing facilities to produce our products, with final assembly conducted at our Minnesota headquarters. Cost of goods sold for the fiscal year ended December 31, 2021 was $8,915, compared to $5,882 for the same period of 2020. This $3,033, or 51.6%, increase in cost of goods sold is the result of increased sales of Top Kontrol units. As a percentage of overall sales, cost of goods sold was 28.1% and 29.0% during the fiscal years ended December 31, 2021 and 2020, respectively.
Gross Profit
Gross profit for the fiscal year ended December 31, 2021 was $22,798, compared to $14,384 for the same period of 2020. This $8,414, or 58.5%, increase in gross profits is the result of increased sales of Top Kontrol units. Our gross profit margin was 71.9% and 71.0% during the fiscal years ended December 31, 2021 and 2020, respectively.
Operating Expenses
|
| Fiscal Year Ended December 31, | |||
|
|
2021 |
|
2020 | |
Operating expenses: |
|
|
|
| |
| General and administrative | $ | 124,267 | $ | 78,395 |
| Research and development |
| 7,245 |
| 430 |
| Operating expenses | $ | 131,511 | $ | 78,825 |
Our operating expenses consisted of two components: general and administrative expenses and research and development expenses. Total operating expenses were $131,511 for the fiscal year ended December 31, 2021, compared to $78,825 for the same period of 2020, representing an increase in operating expenses of $52,686, or 66.8%, during the fiscal year ended December 31, 2021.
General and administrative expenses consisted of selling, general and administrative expenses, legal and accounting expenses, and regulatory compliance expenses. During the fiscal year ended December 31, 2021 our general and administrative expenses were $124,267, compared to $78,395 for the same period of 2020, representing an increase of $45,872, or 58.2%. The increase in general and administrative expenses is the result of higher accounting and regulatory compliance expenses and increased marketing expenses related to selling Top Kontrol.
Research and development expenses are expenses related to the development and certification of our products. During the fiscal year ended December 31, 2021 our research and development expenses were $7,245, which were attributable to early work on our second-generation Top Kontrol product. Our research and development expenses for the same period of 2020 were $430, which were attributable to a new product line that has temporarily halted while we focus on making improvements to our Top Kontrol product line. The result was an increase in research and development expenses of $6,815, or 1,438.4%. Research and development expenses will continue to vary considerably into the foreseeable future.
Loss From Operations
As a result of the preceding, our loss from operations was ($108,713) during the fiscal year ended December 31, 2021, compared with ($64,441) for the same period of 2020. This $44,272, or 68.7%, increase in our loss from operations is the result of a significant increase in our overall operating expenses.
Net Loss
26
As a result of the preceding, our net loss was ($108,713) during the fiscal year ended December 31, 2021, compared with ($64,441) for the same period of 2020. This $44,272, or 68.7%, increase in our net loss is the result of a significant increase in our overall operating expenses.
27
Total Stockholders’ Equity.
Our stockholders’ equity was $250,504 as of December 31, 2021.
Liquidity and Capital Resources
Our principal demands for liquidity are related to our efforts to generate sales, produce inventory, and expenditures related to sales, regulatory compliance, and general corporate purposes. We intend to meet our liquidity demands, including capital expenditures related to the manufacture of inventory and the expansion of our business, primarily through cash flow provided by operations and sales of our securities.
We rely primarily on internally generated cash flow and available working capital to support operations and growth. As of December 31, 2021, we did not have any credit facilities. Although we believe that our current cash and anticipated cash receipts from Top Kontrol sales will be sufficient to meet our planned working capital requirements and capital expenditures over the next 12 months, we are always exploring additional sources of new capital. Without limiting our available options, future financings will most likely be through the sale of additional shares of our common stock. We may also include warrants, options, and/or rights in conjunction with any future issuances of our common stock. However, we can give no assurance that future financing will be available to us and, if available to us, in amounts or on terms acceptable to us.
We had net working capital of $250,504 as of December 31, 2021, an increase of $114,537, or 84.2%, from net working capital of $135,967 as of December 31, 2020. The ratio of current assets to current liabilities was 73-to-1 on December 31, 2021.
The following is a summary of cash provided by or used in each of the indicated types of activities during the fiscal years ended December 31, 2021 and 2020:
| Fiscal Year Ended December 31, | |||
|
2021 |
|
2020 | |
Cash provided by (used in): |
|
|
| |
| Operating activities | ($99,028) |
| ($109,159) |
| Financing activities | $223,250 |
| $65,894 |
Net cash used in operating activities during the fiscal year ended December 31, 2021 was ($99,028), a decrease of ($10,031), or (9.2%), from cash used in operating activities of ($109,059) during the same period of 2020. The decrease in cash used in operating activities was primarily attributable to a decrease in inventories of ($9,018).
Net cash provided by financing activities during the fiscal year ended December 31, 2021 was $223,250, compared to $65,894 for the same period of 2020. This $157,356, or 238.8%, increase in cash inflow from financing activities was from selling additional shares of our common stock in a private placement offering.
Impact of the COVID-19 (Coronavirus) Pandemic
In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic causing the U.S. government to impose travel restrictions between the United States, Europe, and many other countries worldwide, which have subsequently cycled between being lifted, reimposed, and modified on an ongoing basis. As of December 31, 2021, the COVID-19 panic continues to negatively affect the global economy, significantly disrupt global supply chains, and create major financial and retail marketplace disruptions.
Because we began manufacturing and selling Top Kontrol during the fiscal year ended December 31, 2020, we cannot determine, compare, or estimate with any degree of accuracy to what extent the pandemic may be hindering our sales efforts. While we believe this pandemic has had a material impact on our business, particularly relating to sales of Top Kontrol, we do not have enough operating history to accurately evaluate or quantify the extent that this pandemic may have impacted the following areas of our business:
28
• |
| Raw material and component supply chains |
• |
| Product sales |
• |
| Training and educating prospective Top Kontrol Certified Technicians |
• |
| Marketing and advertising efficiencies |
Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil through the fiscal year ending December 31, 2022, while many businesses continue to operate at diminished capacities and the global supply chain remains fractured. Many market experts believe businesses will continue to experience adverse effects and supply chain disruptions from the COVID-19 pandemic into the fiscal year ending December 31, 2023.
Going Concern Consideration
Our independent registered public accounting firm has issued a going concern opinion in their audit report dated March 30, 2022, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2022. This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next 12 months.
Off-Balance Sheet Operations
As of December 31, 2021, we had no off-balance sheet activities or operations.
Critical Accounting Policies
Use of Estimates
The accompanying financial statements of SecureTech have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities depends on future events, the preparation of financial statements for a period necessarily involves the use of estimates made using careful judgment. Actual results may vary from these estimates.
The worldwide spread of COVID-19 has resulted in a global slowdown of economic activity, which is likely to decrease demand for a wide variety of goods and services while also disrupting supply chains, sales channels, marketing activities, and general business operations for an unknown period of time until the disease is contained at local, regional, and worldwide levels. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments, or adjust the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and is recognized in the financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to our financial statements.
Cash and Cash Equivalents
For purposes of the statement of cash flows, SecureTech considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of December 31, 2021 and 2020, SecureTech had no cash equivalents.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
29
Level |
| Description |
|
|
|
Level 1 |
| Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
| Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
| Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Inventory and Cost of Sales
Inventories are stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, Management reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell.
Net Loss per Share Calculation
Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is calculated similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the fiscal years ended December 31, 2021 and 2020.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers.
SecureTech’s primary source of revenue is from the sale of our Top Kontrol product. We began selling Top Kontrol in late April 2020.
Top Kontrol requires installation by a Certified Top Kontrol Technician. To become a Certified Top Kontrol Technician, an automotive technician must complete a one-day hands-on course hosted by SecureTech. Failure to have Top Kontrol installed by a Certified Top Kontrol Technician voids the product’s limited liability warranty.
Because of this professional installation requirement, SecureTech generally sells its products to and through Certified Top Kontrol Technicians and Authorized Dealers. In the instances where SecureTech sells directly to the end-user, product installation is performed by authorized SecureTech personnel.
Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied. Revenue is recorded net of marketing allowances, volume discounts, and other forms of variable consideration. Generally, this occurs with the transfer of control of our product to the customer and payment has been received. SecureTech does not offer terms or credit to any of its customers.
Revenue Recognition; ASC 606 Five-Step Model
Under ASC 606, SecureTech recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
30
Revenue Recognition; General Right of Return
Customers are allowed to return goods that are defective (warranty returns). In some instances, customers may be allowed to return a limited number of units for periodic stock adjustment returns. Such stock adjustment returns would be limited to no more than 5% of their total units sold.
As is standard in the industry, we only will accept returns from active customers. If a customer ceases doing business with us, we have no further obligation to accept additional product returns from that customer.
Income Taxes
SecureTech accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
SecureTech maintains a valuation allowance with respect to deferred tax assets. SecureTech establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration SecureTech’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as SecureTech generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Election to Use Extended Transitional Period Under Jumpstart Our Business Startups Act (“JOBS Act”)
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
Recent Accounting Pronouncements
There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on SecureTech’s financial position, results of operations or cash flows.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
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Table of ContentsIndex to Financial Statements
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
32
Table of ContentsIndex to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of SecureTech Innovations, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of SecureTech Innovations, Inc. (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a negative cash flow from operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
33
Table of ContentsIndex to Financial Statements
Going Concern
As discussed in Note 2 to the financial statements, the Company had a going concern due to a continual net loss, stockholders’ deficiency, and negative cash flow from operations. Auditing management’s evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates on future revenues and expenses which are not able to be substantiated.
To evaluate the appropriateness of the going concern, we examined and evaluate the financial information that was the initial cause along with management’s plans to mitigate the going concern and management’s disclosure ongoing concern.
/s/ M&K CPAS, PLLC | |
|
|
We have served as the Company’s auditor since 2017. | |
|
|
Houston, TX | |
|
|
March 30, 2022 |
|
34
Table of ContentsIndex to Financial Statements
SECURETECH INNOVATIONS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Current assets: | ||||||||
| Cash and equivalents | $ | 214,026 | $ | 89,804 | ||||
| Inventories | 39,975 | 48,993 | ||||||
| Total current assets | 254,001 | 138,797 | ||||||
| Total assets: | $ | 254,001 | $ | 138,797 | ||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
| Current liabilities: | ||||||||
| Accounts payable | 1,160 | 1,335 | ||||||
| Sales tax payable | 2,337 | 1,495 | ||||||
| Total current liabilities | $ | 3,497 | 2,830 | |||||
| Total liabilities | $ | 3,497 | $ | 2,830 | ||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $ par value, shares authorized | ||||||||
| Common stock, par value, shares authorized; and shares issued and outstanding, respectively | 113,336 | 170,442 | ||||||
| Additional paid-in capital | 592,899 | 312,543 | ||||||
| Accumulated deficit | (455,731 | ) | (347,018 | ) | ||||
| Total stockholders’ equity | $ | 250,504 | $ | 135,967 | ||||
| Total liabilities and stockholders’ equity | $ | 254,001 | $ | 138,797 |
The accompanying notes to the financial statements are an integral part of these statements.
35
Table of ContentsIndex to Financial Statements
SECURETECH INNOVATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the fiscal year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Revenues: | ||||||||
| Sales | $ | 31,713 | $ | 20,266 | ||||
| Cost of goods sold | 8,915 | 5,882 | ||||||
| Gross profit | 22,798 | 14,384 | ||||||
| Expenses: | ||||||||
| General and administrative | $ | 124,267 | $ | 78,395 | ||||
| Research and development | 7,245 | 430 | ||||||
| Total operating expenses | 131,511 | 78,825 | ||||||
| (Loss) from operations | (108,713 | ) | (64,441 | ) | ||||
| Provision for income taxes | ||||||||
| Net (loss) | $ | (108,713 | ) | $ | (64,441 | ) | ||
Loss per share, basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 156,034,210 | 170,283,274 | ||||||
The accompanying notes to the financial statements are an integral part of these statements.
36
Table of ContentsIndex to Financial Statements
SECURETECH INNOVATIONS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the period from December 31, 2019 to December 31, 2021
| Additional | ||||||||||||||||||||
| Common Stock | Paid In | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2019 | 170,003,000 | $ | 170,003 | $ | 247,088 | ($ | 282,577 | ) | $ | 134,514 | ||||||||||
| Issuance of common shares for cash | 439,300 | 439 | 65,455 | 65,894 | ||||||||||||||||
| Net loss | — | (64,441 | ) | (64,441 | ) | |||||||||||||||
| Balance, December 31, 2020 | 170,442,300 | $ | 170,442 | $ | 312,543 | ($ | 347,018 | ) | $ | 135,967 | ||||||||||
| Issuance of common shares for cash | 889,000 | 889 | 221,361 | 222,250 | ||||||||||||||||
| Exercise of $0.20 warrants into common shares | 5,000 | 5 | 995 | 1,000 | ||||||||||||||||
| Cancellation of common shares | (58,000,000 | ) | (58,000 | ) | 58,000 | |||||||||||||||
| Net loss | — | (108,713 | ) | (108,713 | ) | |||||||||||||||
| Balance, December 31, 2021 | 113,336,300 | $ | 113,336 | $ | 592,899 | ($ | 455,731 | ) | $ | 250,504 | ||||||||||
The accompanying notes to the consolidated financial statements are an integral part of these statements.
37
Table of ContentsIndex to Financial Statements
SECURETECH INNOVATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the fiscal year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) | $ | (108,713 | ) | $ | (64,441 | ) | ||
| Adjustments to reconcile net (loss) to net cash used in operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in inventories | 9,018 | (48,993 | ) | |||||
| (Increase) decrease in other current assets | 1,545 | |||||||
| Increase (decrease) in accounts payable | (175 | ) | 1,235 | |||||
| Increase (decrease) in sales tax payable | 842 | 1,495 | ||||||
| Net cash used in operating activities | (99,028 | ) | (109,159 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Issuance of common stock for cash | 222,250 | 65,894 | ||||||
| Exercise of $0.20 warrants into common shares for cash | 1,000 | |||||||
| Net cash provided by financing activities | 223,250 | 65,894 | ||||||
| Net increase (decrease) in cash | 124,222 | (43,265 | ) | |||||
| Cash – beginning of period | 89,804 | 133,069 | ||||||
| Cash – end of period | $ | 214,026 | $ | 89,804 | ||||
| Non-cash financing activities: | ||||||||
| Share cancellation | $ | 58,000 | $ | |||||
The accompanying notes to the financial statements are an integral part of these statements.
38
Table of ContentsIndex to Financial Statements
SECURETECH INNOVATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021
NOTE 1 – Summary of Significant Accounting Policies
Organization
SecureTech Innovations, Inc. (“Company” or “SecureTech”) was incorporated under the laws of the State of Wyoming on March 2, 2017, under the name SecureTech, Inc. The Company amended its Articles of Incorporation on December 20, 2017, to change its name to SecureTech Innovations, Inc. On November 19, 2021 and November 25, 2021, SecureTech incorporated wholly-owned subsidiaries Piranha Blockchain, Inc. under the laws of the State of Wyoming and Piranha Blockchain, Ltd. under the International Business Company (IBC) laws of Anguilla, British West Indies, respectively (collectively, “Piranha”).
SecureTech is an emerging growth company focused on developing and marketing advanced security and safety technologies. SecureTech’s products preserve life, protect property, and prevent crime. Under the Top Kontrol brand, SecureTech currently sells the world’s only anti-theft and anti-carjacking automobile security and safety system. Under its wholly-owned Piranha subsidiaries, SecureTech intends to develop and acquire secure green energy data centers, advanced cybersecurity technologies, and blockchain and cryptocurrency systems and platforms for mining, storage, and trading exchanges.
Impact of the COVID-19 (Coronavirus) Pandemic
In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic causing the U.S. government to impose travel restrictions between the United States, Europe, and many other countries worldwide, which have subsequently cycled between being lifted, reimposed, and modified on an ongoing basis. As of December 31, 2021, the COVID-19 panic continues to negatively affect the global economy, significantly disrupt global supply chains, and create major financial and retail marketplace disruptions.
Because we began manufacturing and selling Top Kontrol during the fiscal year ended December 31, 2020, we cannot determine, compare, or estimate with any degree of accuracy to what extent the pandemic may be hindering our sales efforts. While we believe this pandemic has had a material impact on our business, particularly relating to sales of Top Kontrol, we do not have enough operating history to accurately evaluate or quantify the extent that this pandemic may have impacted the following areas of our business:
• |
| Raw material and component supply chains |
• |
| Product sales |
• |
| Training and educating prospective Top Kontrol Certified Technicians |
• |
| Marketing and advertising efficiencies |
Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil through the fiscal year ending December 31, 2022, while many businesses continue to operate at diminished capacities and the global supply chain remains fractured. Many market experts believe businesses will continue to experience adverse effects and supply chain disruptions from the COVID-19 pandemic into the fiscal year ending December 31, 2023.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for financial information and in accordance with the Securities and Exchange Commission’s (“SEC”) Regulation S-X. They reflect all adjustments which are, in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results as of and for the fiscal periods ended December 31, 2021 and 2020.
Use of Estimates
The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities depends on future
events, the preparation of financial statements for a period necessarily involves the use of estimates made using careful judgment. Actual results may vary from these estimates.
The worldwide spread of COVID-19 continues to negatively impact global economic activity, and it is likely to continue disrupting supply chains, sales channels, marketing activities, and general business operations until the disease is contained at local, regional, and worldwide levels. At this point, the extent to which COVID-19 may impact our financial condition or results of operations remains uncertain. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments, or adjust the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and is recognized in the financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to our financial statements.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of December 31, 2021 and 2020, the Company had no cash equivalents.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:
Level |
| Description |
|
|
|
Level 1 |
| Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
| Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
| Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Inventory and Cost of Sales
Inventories are stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell.
Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is calculated similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the fiscal years ended December 31, 2021 and 2020.
Revenue Recognition
Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers.
The Company’s primary source of revenue is from the sale of our Top Kontrol product. We began selling Top Kontrol in late April 2020.
Top Kontrol requires installation by a Certified Top Kontrol Technician. To become a Certified Top Kontrol Technician, an automotive technician must complete a one-day hands-on course hosted by the Company. This class is provided free of charge. Failure to have Top Kontrol installed by a Certified Top Kontrol Technician voids the product’s limited liability warranty. Top Kontrol’s warranty allows the Company to repair or replace any defective Top Kontrol parts – in either materials or workmanship – for up to six months from the original date of purchase.
Because of this professional installation requirement, the Company sells its products to and through Authorized Dealers and independent Certified Top Kontrol Technicians. When the Company sells directly to the end-user, product installation must be performed by authorized Company personnel or a third-party Certified Top Kontrol Technician to avoid voiding the Top Kontrol limited liability warranty.
Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied. Revenue is recorded net of marketing allowances, volume discounts, and other forms of variable consideration. Generally, this occurs with the transfer of control of our product to the customer and payment has been received. The Company does not offer terms or credit to any of its customers.
Revenue Recognition; ASC 606 Five-Step Model
Under ASC 606, the Company recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
Revenue Recognition; General Right of Return
Customers are allowed to return goods that are defective (warranty returns). In some instances, customers may be allowed to return a limited number of units for periodic stock adjustment returns. Such stock adjustment returns would be limited to no more than 5% of their total units sold.
As is standard in the industry, we only will accept returns from active customers. If a customer ceases doing business with us, we have no further obligation to accept additional product returns from that customer.
Revenue Recognition; Concentration
As of December 31, 2021, the Company had three customers that each comprised in excess of 10% of the Company’s overall revenue. In aggregate, these three customers represented 39.9% of the Company’s revenue for the fiscal year ended December 31, 2021.
Income Taxes
The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the following majority-owned subsidiaries in December 31, 2021:
Subsidiary |
| Percentage Owned |
|
|
|
Piranha Blockchain, Inc. |
| 100.0% |
Piranha Blockchain, Ltd. |
| 100.0% |
Fiscal Year
The Company elected December 31st for its fiscal year-end.
Recent Accounting Pronouncements
There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements during the fiscal year ended December 31, 2021, the Company has not established a source of revenues sufficient to cover its operating costs. As such, it has incurred an operating loss since its inception. Further, as of December 31, 2021, the Company had an accumulated deficit of ($455,731). These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s existence depends on management’s ability to develop profitable operations and obtain additional financing sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or resolve the Company’s liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.
NOTE 3 – INVENTORIES
Inventory is stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell. The following table summarizes the Company’s inventories as of December 31, 2021 and 2020:
| December 31, | ||||||||
| 2021 | 2020 | |||||||
| Inventories: | ||||||||
| Raw materials and work-in-progress | $ | 1,955 | $ | 1,971 | ||||
| Finished goods | 38,020 | 47,022 | ||||||
| Gross inventories | 39,975 | 48,993 | ||||||
| Inventory valuation reserves | ||||||||
| Inventories, net | $ | 39,975 | $ | 48,993 | ||||
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Table of ContentsIndex to Financial Statements
NOTE 4 – INCOME TAXES
The provision (benefit) for income taxes for the years ended December 31, 2021 and 2020 were as follows, assuming a 21% effective tax rate:
| For the fiscal year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Current tax provision: | ||||||||
| Federal | ||||||||
| Taxable income | $ | — | $ | — | ||||
| Total current tax provision | $ | — | $ | — | ||||
| Deferred tax provision: | ||||||||
| Federal | ||||||||
| Loss carryforwards | $ | 95,704 | $ | 72,874 | ||||
| Change in valuation allowance | (95,704 | ) | (72,874 | ) | ||||
| Total deferred tax provision | $ | $ | ||||||
As of December 31, 2021, the Company had approximately $455,732 in tax loss carryforwards that can be utilized in future periods to reduce taxable income through 2041. December 31, 2041
The Company provided a valuation allowance equal to the deferred income tax assets for the period from March 2, 2017 (inception) to December 31, 2021, because it is not presently known whether future taxable income will be sufficient to utilize the tax loss carryforwards.
The Company has no uncertain tax positions.
NOTE 5 – STOCKHOLDERS’ EQUITY
Preferred stock
The Company has authorized shares of preferred stock, par value. The Company’s Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges, and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, and sinking fund terms.
As of December 31, 2021, the Company had no classes and -- shares of preferred stock issued and outstanding.
Common stock
The Company has authorized shares of common stock, with a par value of $ per share.
2021 Issuances
During the fiscal period ended December 31, 2021, the Company sold 889,000 shares of its common stock, par value, at a purchase price of $ per Share through a Regulation D, Rule 506 offering of its common shares (“Series C Private Placement Offering”). The Series C Private Placement Offering was closed on September 30, 2021.
During the fiscal period ended December 31, 2021, a Warrant holder exercised of his $0.20 Stock Purchase Warrants into shares of the Company’s common stock. For this warrant exercise, the Warrant holder paid $1,000, or $0.20 a share. The remaining outstanding $0.20 Stock Purchase Warrants subsequently expired unexercised on December 31, 2021.
2021 Cancellations
During the fiscal period ended December 31, 2021, the Company canceled an aggregate of shares of its common stock. Management continues to explore additional possibilities to cancel and retire shares with the overall goal of reducing the number of issued and outstanding shares of common stock.
As of December 31, 2021, the Company had shares of common stock issued and outstanding.
NOTE 6 – WARRANTS
The following table summarizes information with respect to outstanding warrants to purchase shares of the Company’s common stock as of December 31, 2021.
Exercise Price | Number Outstanding | Expiration Date | ||||||
| $ | 0.30 | 439,300 | March 31, 2021 | |||||
| $ | 0.40 | 439,300 | June 30, 2022 | |||||
| $ | 0.50 | 439,300 | December 31, 2022 | |||||
| 1,317,900 | ||||||||
Warrant Issuances, Exercises, and Expirations
During the fiscal year ended December 31, 2020, the Company undertook a private placement of its securities through a private placement Unit offering. Each Unit included one share of the Company’s common stock and four stock purchase warrants with incremental exercise prices and expiration dates. An aggregate of 1,757,200 stock purchase warrants were issued under this offering, which was closed on June 30, 2020.
The warrants were valued using the Black-Scholes model with a 53.0% volatility rate and discount rates ranging from 0.16% - 0.21% for a total fair value of $19,257.
A summary of the warrant activity for the fiscal year ended December 31, 2021, is as follows:
| Warrant Activity | Warrants |
Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) |
Aggregate Intrinsic Value | ||||||||||||||
Outstanding on January 1, 2021 | 1,757,200 | $ | 0.35 | 0.7 | $ | 966,460 | ||||||||||||
Issued | $ | — | $ | — | ||||||||||||||
Exercised | (5,000 | ) | $ | 0.20 | — | $ | 3,500 | |||||||||||
Expired | (434,300 | ) | $ | 0.20 | — | $ | 304,010 | |||||||||||
Outstanding on December 31, 2021 | 1,317,900 | |||||||||||||||||
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price of $0.90 (based on the bid price quoted on the OTC Pink Tier of the OTC Market Group, Inc.) as of December 31, 2020, which the warrant holders would have received had those warrant holders exercised their warrants as of that date.
44
Table of ContentsIndex to Financial Statements
NOTE 7 – RELATED PARTY FOUNDER’S SHARE ISSUANCES
On March 2, 2017, the Company issued an aggregate of shares of its common stock, par value, as Founder’s Shares with $-- value.
Of these Founder’s Shares, were issued to the Company’s officers, to an entity controlled by one of the Company’s directors, and to outside consultants who assisted with the Company’s formation and early organization.
NOTE 8 – CONTINGENCY/LEGAL
As of December 31, 2021, and during the past ten years, no director, person nominated to become a director or executive officer, or promoter of SecureTech has been involved in any legal proceeding that would require disclosure hereunder.
From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. However, litigation is subject to inherent uncertainties for which the ultimate outcome cannot be predicted. Any adverse result in these or other legal matters could arise and cause harm to our business. We currently are not a party to any claim or litigation.
NOTE 9 – SUBSEQUENT EVENTS
Common Share Cancellation
On February 17, 2022, the Company canceled an aggregate of shares of its common stock.
As of March 30, 2022, the Company had shares of its common stock issued and outstanding.
No other material events or transactions have occurred during this subsequent event reporting period that required recognition or disclosure in the financial statements.
[This space intentionally left blank]
45
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of SecureTech’s management, our Principle Executive Office and Principle Financial Officer have concluded that SecureTech’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) were effective as of December 31, 2021 to provide reasonable assurance that information required to be disclosed by SecureTech in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated SecureTech’s management, including our Principle Executive Office and Principle Financial Officer, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
SecureTech’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management assessed the effectiveness of SecureTech’s internal control over financial reporting based on the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
This Annual Report on Form 10-K does not include an audit report on internal control over financial reporting by SecureTech’s registered public accounting firm. SecureTech’s internal control over financial reporting was not subject to audit by its registered public accounting firm pursuant to the SEC’s Exchange Act Rule 12b-2 that permits SecureTech to provide only management’s assessment report for the year ended December 31, 2021.
Changes in Internal Control Over Financial Reporting
There were no changes in SecureTech’s internal control over financial reporting which occurred during the fiscal period ended December 31, 2021, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
Inherent Limitations of Internal Control
Management, including our Principal Executive Officer and Principal Financial Officer, does not expect that SecureTech’s internal controls will prevent or detect all errors and all fraud. No matter how well designed and operated, a control system can provide only reasonable, not absolute, assurance that the control system's objectives are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of internal controls in future periods is subject to the risk that those internal controls may become inadequate because of changes in business conditions or that the degree of compliance with the policies or procedures may deteriorate.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
46
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Our executive officers and directors and their respective ages as of the date of this Annual Report are as follows:
Name | Age | Position |
|
|
|
Kao Lee | 52 | President, Chief Executive Officer, and Director |
Anthony Vang | 50 | Treasurer, Secretary, and Director |
Abdikarim H. Farah | 51 | Vice President |
Kao Lee is a co-founder and has served as our President, Chief Executive Officer, and member of our Board of Directors since our inception in March 2017. Until 2021, Mr. Lee concurrently served as the President and Chief Executive Officer of Shongkawh, LLC (since its inception in 2009 through 2021), a research and development firm focused on personal and automobile security and safety devices and technologies. At Shongkawh, Mr. Lee’s responsibilities included directing technological development, overseeing product marketing and promotion phases, and facilitating international relationships with technology buyers, particularly in Asia and Europe. Now he focuses exclusively on SecureTech’s business.
Mr. Lee is not currently an officer or director of any other reporting company and presently devotes 100%, or 40 to 45 hours per week, of his business time to our affairs.
Anthony Vang is a co-founder and has served as our Treasurer, Secretary, and member of our Board of Directors since our inception in March 2017. Mr. Vang concurrently serves as a Director of Shongkawh, LLC (since its inception in 2009), a research and development firm focused on personal and automobile security and safety devices and technologies.
Before co-founding SecureTech and Shongkawh, Mr. Vang served as a Director of Evergreen Home Healthcare Company from 2005 through 2009. At Evergreen, he assisted with obtaining regulatory licenses, procuring new business and contracts, and overseeing the company's general management.
Mr. Vang is not currently an officer or director of any other reporting company. He intends to devote approximately 50%, or 20 to 25 hours per week, of his business time to our affairs.
Abdikarim H. Farah has served as a Vice President since our inception in March 2017. Mr. Farah concurrently is a Senior Representative at African Resource Group, Inc., a position he has held since 2015.
Before joining African Resource Group and SecureTech, Mr. Farah founded Addan & Associates, LLC in 2005, a Minnesota-based consulting firm that mentors and coaches both businesses and individuals in sales and marketing strategies. Mr. Farah continues to provide these consulting services through Addan & Associates.
In addition to the preceding, Mr. Farah has worked in the health care field as a Senior Pharmacy Tech at Walgreens Pharmacy between 1997 and 2000. He also worked at the Minnesota General Hospital Hennepin County Medical Center pharmacy department between 1999 and 2014 as a Senior Pharmacy Technician and Customer Representative.
Mr. Farah is not currently an officer or director of any other reporting company. He intends to devote approximately 25%, or 5 to 10 hours per week, of his business time to our affairs.
Term of Office
Our directors are appointed for a one-year term to hold office until our shareholders' next annual general meeting or until removed from office in accordance with our Bylaws. Our Board of Directors appoints our officers who hold office until removed by the Board.
Family Relationships
There are no family relationships between or among the directors, executive officers, or persons nominated or chosen by us to become directors or executive officers.
47
Committees of the Board of Directors
We do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee, or any other committee of our Board of Directors. As such, our entire Board of Directors acts as our audit committee.
Audit Committee Financial Expert
Our Board of Directors does not currently have any member who qualifies as an audit committee financial expert. We believe that the cost of retaining such a financial expert at this time is prohibitive. Further, because we are a smaller reporting company, we believe the services of an audit committee financial expert are not necessary at this time.
Involvement in Legal Proceedings
None of our officers or directors – past or present – have appeared as a party to any legal proceedings during the past ten (10) years that may interfere with their ability or integrity to serve as an officer or director of SecureTech.
Code of Ethics
We do not currently have a Code of Ethics applicable to our principal executive, financial, and accounting officers.
Potential Conflict of Interest
Since we do not have an audit or compensation committee comprised of independent directors, the functions that such committees would have performed are currently performed by our Board of Directors. Thus, there is a potential conflict of interest in that our officers and directors have the authority to determine issues concerning management compensation, including their own personal compensation package and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with our officers and directors.
Board of Director’s Role in Risk Oversight
The Board of Directors assesses on an ongoing basis the risks faced by SecureTech. These risks include financial, technological, competitive, and operational risks. The Board of Directors dedicates time at each of its meetings to review and consider the relevant risks faced at that time. Additionally, since SecureTech does not have an Audit Committee, the Board of Directors is also responsible for assessing and overseeing SecureTech’s financial risk exposures.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires SecureTech’s executive officers, directors, and persons who own more than 10% of a registered class of SecureTech's equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership, and annual reports concerning their ownership of common stock and other equity securities of SecureTech on Form(s) 3, 4, and 5, respectively. Executive officers, directors, and greater than 10% shareholders are required by SEC regulations to furnish SecureTech with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that for the fiscal year ended December 31, 2021, all filing requirements applicable to our officers, directors, and greater than 10% percent beneficial owners were complied with and that there were no deficiencies.
48
Item 11. Executive Compensation
The table below summarizes all compensation awarded to, earned by, or paid to our officers for all services rendered in all capacities to us for our fiscal years ended December 31, 2021 and 2020. No cash compensation was paid to any of our officers between inception on March 2, 2017 and December 31, 2021.
Summary Compensation Table
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compen-sation ($) | Change in Pension Value & Nonqual-ified Deferred Compen-sation Earnings ($) |
All Other Compen-sation ($) |
Totals ($) |
|
|
|
|
|
|
|
|
|
|
Kao Lee, President,CEO, and Director (1) |
2021 2020 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
Anthony Vang, Treasurer, Secretary, and Director (2) |
2021 2020 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
Abdikarim Farah, Vice President (3) |
2021 2020 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
(1)Mr. Lee received 75,000,000 shares of our common stock on March 2, 2017. These shares were issued as Founder’s Shares, which are recorded with a net valuation of $-0-.
(2)Mr. Vang received 5,000,000 shares of our common stock on March 2, 2017. These shares were issued as Founder’s Shares, which are recorded with a net valuation of $-0-.
(3)Mr. Farah received 1,000,000 shares of our common stock on November 15, 2017. These shares were issued as Founder’s Shares, which are recorded with a net valuation of $-0-.
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The table below summarizes all compensation awarded to, earned by, or paid to our directors for all services rendered in all capacities to us for our fiscal years ended December 31, 2021 and 2020. No cash compensation was paid to any of our directors between inception on March 2, 2017 and December 31, 2021.
Director Compensation Table
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compen-sation ($) |
Total ($) |
|
|
|
|
|
|
|
|
Kao Lee | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Anthony Vang | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
All compensation received by our officers and directors has been disclosed. There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Employment Agreements
We have not entered into any employment agreements with any of our officers or directors. As of the date of this Annual Report, we had no employees other than those listed above. All future employment arrangements are subject to the discretion of our Board of Directors.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans that provide compensation intended to serve as an incentive for performance.
Outstanding Equity Awards at the End of the Fiscal Year
We do not have and have never had any equity compensation plans, and therefore, no equity awards are outstanding as of the date of this registration statement.
Bonuses and Deferred Compensation
We may pay bonuses as determined by the Board of Directors from time to time based on performance, which may either be paid in stock or cash at the Board's discretion.
Options and Stock Appreciation Rights
We do not currently have a stock option or other equity incentive plan. We may adopt one or more such programs in the future.
Payment of Post-Termination Compensation
We do not have change-in-control agreements with any of our directors or executive officers. We are not obligated to pay severance or other enhanced benefits to executive officers upon the termination of their employment.
Officer Compensation
We began paying our offices a cash salary on January 1, 2022. Kao Lee now receives a base cash salary of $52,000 annually and Anthony Vang receives a base cash salary of $26,000 annually.
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Director Compensation
We have no plans to begin paying our directors any cash compensation until our business becomes operationally profitable. However, we may reimburse our directors for any out-of-pocket travel and lodging expenses associated with their attendance of Board meetings.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of March 30, 2022, certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group.
Unless otherwise noted, each shareholder's mailing address is 2355 Highway 36 West, Suite 400, Roseville, MN 55113.
Name of Beneficial Owner | Shares of Common Stock | Percentage of Class (1) |
|
|
|
Officers and Directors |
|
|
Kao Lee, President, CEO, and Director |
69,000,000 |
61.8% |
Anthony Vang, Treasurer, Secretary, and Director |
10,000,000 |
9.0% |
Abdikarim Farah, Vice President |
1,000,000 |
0.9% |
All officers and directors as a group (3 persons) |
80,000,000 |
71.7% |
|
|
|
Five Percent Stockholders |
|
|
None | - | - |
(1)Based on 111,636,300 shares issued and outstanding as of March 30, 2022.
Securities Authorized for Issuance Under Equity Compensation Plans
As of December 31, 2021, we did not have any authorized Equity Compensation Plans. Further, we have no plans to create any plans during the fiscal year ending December 31, 2022.
Changes in Control
We are unaware of any contract or other arrangement that could result in a change of control of SecureTech.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Related Party Transactions
On March 2, 2017, SecureTech entered into a Patent License Agreement with Shongkawh, LLC (“Licensing Agreement”), which is controlled by our executive officers Kao Lee and Anthony Vang (and directly owned by Mr. Lee and his brother, Thao Lee) is deemed a related party. This Licensing Agreement gives us exclusive use and control of United States Patent No. 8,436,721.
Under the Licensing Agreement terms, ShongKawh is to receive a royalty of 2% of all products manufactured under this patent, including our Top Kontrol product. The 2% royalty is based on SecureTech’s selling price of any products utilizing this patent,
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which would typically be the wholesale price we offer to distributors. Royalties are to accrue and be paid in quarterly calendar payments.
We cannot project what these royalties may amount to at this time, if any, but we do not believe they will exceed $120,000 in any given calendar year.
Indemnification
Section 78.138 of the Wyoming Revised Statutes (“WRS”) provides that directors and officers of Wyoming corporations may, under certain circumstances, be indemnified against expenses (including attorneys’ fees) and other liabilities actually and reasonably incurred by them as a result of any suit brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. WRS also provides that directors and officers may also be indemnified against expenses (including attorneys’ fees) incurred by them in connection with a derivative suit if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made without court approval if such person was adjudged liable to the corporation.
Further, Article X of our bylaws contains provisions that allow SecureTech to indemnify its officers, directors, employees, and agents.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the directors, officers, and controlling persons of the registrant pursuant to the preceding provisions, or otherwise, the registrant has been advised that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer, or controlling person of the small business issuer in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Corporate Governance and Director Independence
Our Board of Directors has not established Audit, Compensation, and Nominating or Governance Committees as standing committees. The Board does not have an executive committee or any committees performing a similar function. We are not currently listed on a national securities exchange or in an inter-dealer quotation system that requires a majority of the board of directors be independent. Our Directors have determined that they are not “independent” under the definition set forth in the NASDAQ Stock Market's listing standards, which is the definition that the Board has chosen to use to determine director independence. Therefore, our directors are not independent.
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling the registrant pursuant to the preceding provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
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Item 14. Principal Accounting Fees and Services
Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the annual audit of our financial statements and review of financial statements included in our quarterly reports and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
|
| For the Fiscal Year Ended December 31, | ||
|
|
2021 |
|
2020 |
|
|
|
|
|
Audit Fees | $ | 21,200 | $ | 15,700 |
Audit Related Fees |
| -0- |
| -0- |
Tax Fees |
| -0- |
| -0- |
All Other Fees |
| -0- |
| -0- |
Total | $ | 21,200 | $ | 15,700 |
Audit Fees
Consist of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly reports and services customarily provided by the principal accountants in connection with statutory and regulatory filings or engagements.
Audit Related Fees
Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
Tax Fees
Consist of fees billed for professional services for tax compliance, tax advice, and tax planning. These services include the preparation of federal and state income tax returns.
All Other Fees
Consist of fees for products and services other than the services reported above.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Given the small size of our Board of Directors and the limited financial resources and minimal operations of SecureTech, our Board acts as our Audit Committee. Our Board pre-approves all audit and permissible non-audit services. These services may include audit services, audit-related services, tax services, and other services. Our Board approves these services on a case-by-case basis.
Before engaging its accountants to perform particular services, our Board of Directors obtains an estimate for the service to be performed. The Board of Directors approved all of the services described above per this procedure.
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PART IV
Item 15. Exhibits, Financial Statements Schedules
The following documents are filed as a part of this Annual Report:
(1)Financial Statements
The financial statements required to be filed as part of this report are included in Item 8 of Part II of this Annual Report.
(2)Financial Statement Schedules
All schedules are omitted for the reason that the information is included in the financial statements and notes thereto or that they are not required or are not applicable.
(3)Exhibits
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| Incorporated by Reference | ||||||
Exhibit Number |
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Exhibit Description |
| Filed Herewith |
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Form |
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File No. |
|
Exhibit |
| Filing Date |
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| S-1 |
| 333-223078 |
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3.1 |
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2/16/2018 | ||
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| S-1 |
| 333-223078 |
|
3.2 |
|
2/16/2018 | ||
| Amendment to Articles of Incorporation dated December 20, 2017 |
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S-1 |
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333-223078 |
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3.3 |
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2/16/2018 | |
| 4.1 |
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X |
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| |
| Patent License Agreement between SecureTech, Inc. and Shongkawh, LLC dated March 2, 2017 |
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S-1 |
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333-223078 |
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10.1 |
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2/16/2018 | |
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| X |
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| ||
| Certification of Kao Lee, Principal Executive Officer, pursuant to Rule 13a-15(e) or Rule 15d-15(e) |
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X |
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| |
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X |
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| Certification of Kao Lee, Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 |
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X |
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| Certification of Anthony Vang, Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 |
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X |
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101.INS |
| XBRL Instance Document |
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X |
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101.SCH |
| XBRL Taxonomy Extension Schema Document |
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X |
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101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document |
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X |
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101.LAB |
| XBRL Taxonomy Extension Labels Linkbase Document |
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X |
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101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document |
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X |
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101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
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X |
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104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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X |
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Item 16. Form 10-K Summary
Not applicable.
[This space intentionally left blank]
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereto duly authorized on this 30th day of March, 2022.
SECURETECH INNOVATIONS, INC.
| By: | /s/ Kao Lee |
|
| Kao Lee President, Chief Executive Officer, Principal Executive Officer, and Director |
Pursuant to the requirements of the Securities Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on March 30, 2022:
By: | /s/ Kao Lee |
| Kao Lee President, Chief Executive Officer, Principal Executive Officer, and Director |
By: | /s/ Anthony Vang |
| Anthony Vang Secretary, Treasurer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director |
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