SmartMetric, Inc. - Annual Report: 2010 (Form 10-K)

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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For  the fiscal year ended June 30, 2010

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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from  __  to_______________________________

SMARTMETRIC, INC

(Exact name of registrant as specified in its charter)

Nevada		05-0543557
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer identification No.)
1150 Kane Concourse, Suite 400, Bay Harbor Islands, FL		33154
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code		(305) 495-7190

Title of each class		Name of each exchange on which registered
N/A		N/A

Large accelerated filer o		Accelerated filer o
Non-accelerated filer  o (Do not check if a smaller reporting company)		Smaller reporting company þ

 

			Page
PART I
Item 1.	DESCRIPTION OF BUSINESS		2
Item 1A	RISK FACTORS		7
Item 1B	UNRESOLVED STAFF COMMENTS		10
Item 2.	DESCRIPTION OF PROPERTY		10
Item 3.	LEGAL PROCEEDINGS		10
Item 4.	(REMOVED AND RESERVED)		10
PART II
Item 5.	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS ISSUER PURCHASES OF EQUITY SECURITIES		11
Item 6	SELECT FINANCIAL DATA		12
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		12
Item 7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		14
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		14
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		15
Item 9A.	CONTROLS AND PROCEDURES		16
Item 9B.	OTHER INFORMATION		17
PART III
Item 10.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(b) OF THE EXCHANGE ACT		18
Item 11.	EXECUTIVE COMPENSATION		20
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		21
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		21
Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		22
Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES		23
SIGNATURES

·	The fingerprint sensor will facilitate instant authorization verification;

·	In card biometric measurement storage will safeguard personal information;

·	In card biometric storage will permit access, identity and transaction control verification;

·	Instant identity verification will be secure since such information is contained in the card and not in centralized database

·	Something known such as a password, PIN or mother's maiden name;

·	Something carried such as a token, card, or key; or

·	Something physical such as fingerprint, voice pattern, signature motion, facial shape or other biological or behavioral characteristic.

 

 

·	A system for managing digital rights of digital content over a network.

·	A data card contains user information including digital rights information specific to a users, the data card having memory component for enabling information to be stored within the data card.

·	A data card reader is adapted to access the user information contained on the data card when the data card is in communication with a card reading device.

·	A data processor in communication with the data card reader is adapted to be connected to the network.

·

An application program resides on the memory component of the data card, the application program being configured to operate in conjunction with a universal language for creating and controlling digital rights, to manage user rights of the digital content available on the network based on the digital rights information specific to the user which is contained on the data card.

 

 

 

 

 

 

 

 

 

Our intent is to market and sell our products primarily to the private sector while addressing emerging applications that have not yet reached a stage of mass adoption or deployment. The market for some of these solutions (electronic biometric fingerprinting) is at an early stage of deployment in the private sector compared to other forms of services that try to identify a person by their name and social security number. Additionally, we have a strategy of expanding sales of existing products into new geographic markets.  Our target market initially will begin in South America and Australia.

 

 

 

 

 

•	Difficulties in staffing;

•	Adequate resources of qualified technicians, engineers/assemblers, and programmers;

•	Potentially adverse tax consequences;

•	Unexpected changes in regulatory requirements;

•	Tariffs and other trade barriers;

•	export controls;

•	Political and economic instability;

•	Lack of control over the manufacturing process and ultimately over the quality of our products;

•	late delivery of our products, whether because of limited access to product components, transportation delays andinterruptions, difficulties in staffing, or disruptions such as natural disasters;

•	Capacity limitations of our manufacturers, particularly in the context of new large contracts for its products, whetherbecause its manufacturers lack the required capacity or are unwilling to produce the quantities we desire; and

•	Obsolescence of our hardware products at the end of the manufacturing cycle.

 

Location		Use		Square Feet		Rent Payments		Term		Leased From
1150 Kane Concourse, Suite 400, Bay Harbor Islands, Florida 33154		Offices		Approximately 850 square feet		$1,300 per month		monthly		June 2008

 

PART II

Quarter Ended		Low Bid				High Bid
Quarter Ended September 30, 2008			0.07				0.25
Quarter Ended December 31, 2008			0.08				0.18
Quarter Ended March 31, 2009			0.06				0.18
Quarter Ended June 30, 2009			0.08				0.19
Quarter Ended September 30, 2009			0.04				0.17
Quarter Ended December 31, 2009			0.05				0.16
Quarter Ended March 31, 2010			0.04				0.09
Quarter Ended June 30, 2010			0.03				0.17

 

 

 

 

 

 

 

		June 30,
Assets		2010				2009
Current assets:
Cash		$	-			$	42,519
Prepaid expenses and other current assets			4,069				38,758
Total current assets			4,069				81,277
Equipment, less accumulated depreciation of
$15,984 and $13,599, respectively			-				2,385
Other assets:
Patent costs, less accumulated amortization
of $8,625 and $7,125, respectively			6,375				7,875
Total assets		$	10,444			$	91,537
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses		$	160,614			$	129,244
Liability for stock to be issued			154,004				146,454
Cash overdraft			15,141				-
Deferred Officer salary			82,424				-
Shareholder loan			19,916				-
Payroll taxes, withholdings and accrued
interest and penalties			436,271				240,677
Total current liabilities			868,370				516,375
Total liabilities			868,370				516,375
Commitments and contingencies
Stockholders' deficit
Preferred stock, $.001 par value; 5,000,000 shares
authorized, 200,000 and 0 shares issued and outstanding, respectively			200				-
Common stock, $.001 par value; 200,000,000 shares
authorized, issued and outstanding 89,212,555 and
75,546,222 shares, respectively			89,212				75,546
Additional paid-in capital			5,734,086				4,569,388
Deficit accumulated during the development stage			(6,681,424	)			(5,069,772	)
Total stockholders' deficit			(857,926	)			(424,838	)
Total liabilities and stockholders' deficit		$	10,444			$	91,537

 

See notes to consolidated financial statements.

 

										During the
										Development
		Year				Year				Stage
		Ended June 30,				Ended June 30,				(December 18, 2002
		2010				2009				to June 30, 2010)
Revenues		$	-			$	-			$	-
Expenses:
Officer's salary			170,000				170,000				935,000
Other general and administrative			1,336,211				677,189				4,789,496
Research and development			87,348				250,436				900,947
Total expenses			1,593,559				1,097,625				6,625,443
Loss from operations			(1,593,559	)			(1,097,625	)			(6,625,443	)
Interest income			-				-				657
Interest expense			(18,093	)			(5,464	)			(56,638	)
Net loss		$	(1,611,652	)		$	(1,103,089	)		$	(6,681,424	)
Net loss per share, basic and diluted		$	(0.02	)		$	(0.02	)
Weighted average number of common shares outstanding, basic and diluted			82,365,131				71,908,264
See notes to consolidated financial statements.