Company Quick10K Filing
Securetech Innovations
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 171 $-0
10-K 2020-02-21 Annual: 2019-12-31
10-Q 2019-10-21 Quarter: 2019-09-30
10-Q 2019-07-22 Quarter: 2019-06-30
10-Q 2019-05-16 Quarter: 2019-03-31
10-K 2019-02-19 Annual: 2018-12-31
10-Q 2018-10-25 Quarter: 2018-09-30
10-Q 2018-07-24 Quarter: 2018-06-30
10-Q 2018-05-02 Quarter: 2018-03-31
S-1 2018-02-16 Public Filing
8-K 2019-03-04 Sale of Shares
8-K 2018-10-19 Enter Agreement, Sale of Shares
8-K 2018-05-04 Regulation FD
SCTF 2019-12-31
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Note 1 - Summary of Significant Accounting Policies
Note 2 - Going Concern
Note 3 - Stockholders' Equity
Note 4 - Income Taxes
Note 5 - Contingency/Legal
Note 6 - Subsequent Events
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
Part IV
Item 15. Exhibits, Financial Statements Schedules
Item 16. Form 10-K Summary
EX-31 ex311.htm
EX-31 ex312.htm
EX-32 ex321.htm
EX-32 ex322.htm

Securetech Innovations Earnings 2019-12-31

SCTF 10K Annual Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
ASIM 0 0 0 0 0 0 -0 -1.4 71%
WLUC 0 0 0 0 -1 -1 -0 0.0
ANDO 0 0 0 0 -0 -0 -0 1.1 -74%
WEYL 12 2 25 4 -3 -3 -6 18% 2.2 -24%
SCTF 0 0 0 0 -0 -0 -0 3.3 -30%
INLL 0 0 0 0 -0 -0 -0 0.0 -7,286%
ABMT 0 7 0 0 -1 -1 -0 0.0 -321%
LNGB 11 10 5 0 0 0 -0 4% -1.0 2%
POVD 0 3 0 0 -2 -2 -0 0.0 -4,053%
MLIC 437,745 403,121 37,348 0 4,559 4,960 -8,986 0% -1.8 1%

10-K 1 securetech_form10k2019.htm SECURETECH INNOVATIONS, INC. -- FORM 10-K (FISCAL 2019) SecureTech Innovations, Inc. -- Form 10-K (Fiscal 2019)

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, 2019

 

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

 

TFP-P-Securetech-M-L-Securetech Logo (primary) (February 2020).jpg 

 

              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:

 

                     None                       

(Title of class)

 

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

 

Common Stock, $0.001 par value

(Title of class)

 

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  ¨  (Do not check if a smaller reporting company)            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 is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨      No x 

 

As of June 30, 2019, the aggregate market value of the voting stock held by non-affiliates of the Registrant was $600,090, based upon the last closing sale price of $0.03 a share, or the most recent cash sales price of the Registrant’s common stock.

 

As of February 21, 2020, there were 170,003,000 shares of our common stock, $0.001 par value issued and outstanding; 20,003,000 of these shares were held by non-affiliates of the Registrant.

 

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Exhibits incorporated by reference are referred under Part IV.


2


 

TABLE OF CONTENTS

 

Item

 

Page

 

 

 

PART I

 

4

 

Item 1

Business

 

4

 

Item 1A

Risk Factors

 

12

 

Item 1B

Unresolved Staff Comments

 

20

 

Item 2

Properties

 

20

 

Item 3

Legal Proceedings

 

20

 

Item 4

Mine Safety Disclosures

 

20

 

 

 

PART II

 

21

 

Item 5

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

21

 

Item 6

Selected Financial Data

 

24

 

Item 7

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

 

24

 

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

 

28

 

Item 8

Financial Statements and Supplementary Data

 

F-1

 

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

29

 

Item 9A

Controls and Procedures

 

29

 

Item 9B

Other Information

 

31

 

 

 

PART III

 

31

 

Item 10

Directors, Executive Officers and Corporate Governance

 

31

 

Item 11

Executive Compensation

 

33

 

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

36

 

Item 13

Certain Relationships and Related Transactions and Director Independence

 

37

 

Item 14

Principal Accountant Fees and Services

 

38

PART IV

 

38

 

Item 15

Exhibits, Financial Statement Schedules

 

38

 

Item 16

Form 10-K Summary

 

39

Signatures

 

40


3


PART I

 

Forward-Looking Statements

 

Certain statements made in this Annual Report on Form 10-K are “forward-looking statements” regarding the plans and objectives of management for future operations.  Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Registrant to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements.  The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties.  The Registrant’s plans and objectives are based, in part, on assumptions involving it continuing as a going concern and executing on its stated business plan and objectives.  Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Registrant.  Although the Registrant believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Annual Report will prove to be accurate.  In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Registrant or any other person that the objectives and plans of the Registrant will be achieved.

 

As used in this Annual Report, the terms "we", "us", "our", "SecureTech", “Registrant”, and “Issuer” mean SecureTech Innovations, Inc. unless the context clearly requires otherwise.

 

Item 1.  Business

 

Overview of Our Business

 

SecureTech was incorporated under the laws of the State of Wyoming on March 2, 2017 under the name SecureTech, Inc.  We amended our Articles of Incorporation on December 20, 2017 to change our name to SecureTech Innovations, Inc.

 

SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies.  Through a licensed patent SecureTech has developed its initial product, Top Kontrol, which we believe to be the only anti-theft and personal safety automobile device that can thwart a carjacking attempt without any action by driver.  While our competitors’ products are engineered to flash lights and sound loud alarms when someone is tampering with a parked and unoccupied automobile, our Top Kontrol product is engineered to turn off the engine and completely disable the vehicle should someone other than the authorized driver attempt to drive the vehicle.

 

Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.  SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.

 

Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.

 

SecureTech commenced commercial production of Top Kontrol in January 2020.  We estimate that the lead time from the commencement of the first stage of production (procuring the various components) to completing assembly and having the finished product ready for sale to be approximately 14 weeks.  Based on this projected production timetable SecureTech anticipates generating its first retail sales from Top Kontrol in Q2 2020.

 

Implications of Being an “Emerging Growth Company”

 

As a public reporting company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart our Business Startups Act of 2012 (“JOBS Act”). An emerging growth company may take advantage of certain reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company we:


4


 

are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

 

 

 

 

are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis);

 

 

 

 

are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);

 

 

 

 

are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;

 

 

 

 

may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations, or MD&A;

 

 

 

 

are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and

 

 

 

 

are exempt from any PCAOB rules relating to mandatory audit firm rotation and any requirement to include an auditor discussion and analysis narrative in our audit report.

 

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

 

Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required to a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and related MD&A disclosure.

 

Under the JOBS Act, we may take advantage of these reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933, or such earlier time that we no longer meet the definition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.0 billion in annual revenues, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. Furthermore, under current SEC rules we will continue to qualify as a “smaller reporting company” for so long as we (i) have a public float (i.e., the market value of common equity held by non-affiliates) of less than $75 million as of the last business day of our most recently completed second fiscal quarter; or (ii) for so long as we have a public float of zero, have annual revenues of less than $50 million during our most recently completed fiscal year.

 

Investors should be aware that we are also subject to the “Penny Stock” rules adopted by the Securities and Exchange Commission, which regulate broker-dealer practices in connection with transactions in Penny Stocks. These regulations may have the effect of reducing the level of trading activity, if any, in the secondary market for our stock, and investors in our common stock may find it difficult to sell their shares. Please see the disclosures under “Penny Stock Considerations” on page 33 for more information.

 

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 administration expenditures associated with daily operations, increases in accounting and audit fees, and increases in legal fees related to filings and regulatory compliance.


5


 

As of December 31, 2019, we had incurred ($282,577) in losses since our inception on March 2, 2017.  We have not achieved profitability and expect to continue to incur net losses throughout the fiscal year ending December 31, 2020 and potentially into subsequent fiscal periods.  We expect to incur significant operating expenses and, as a result, will need to generate significant 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 have to successfully sell our current product, Top Kontrol, and continue to innovate and develop new personal and automobile security and safety devices and technologies that will be accepted by the marketplace.  We anticipate relying on equity sales of our common stock in order to continue to fund our business operations until we are able to 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 financing 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 sources of financing 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 assurance that future financing 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.

 

Going Concern

 

Our independent registered public accountant has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern.  For more information their report is included in this annual report on page F-2.

 

 

Top Kontrol Product

 

Top Kontrol Logo with (R).jpg 

 

SecureTech’s first anti-theft and automobile safety product is called Top Kontrol.  Utilizing exclusively licensed patented technology created originally by our Founder, Kao Lee, SecureTech had developed a very competitively priced product that significantly outperforms all other known competing products currently on the market.

 

Key Advantages of the Top Kontrol Product:

 

 

Anti-theft circuits actively prevent automobile theft and carjacking

 

Automatically prevents theft although keys are in ignition and engine is idling

 

Active and passive prevention of carjacking

 

Does not interfere with vehicle’s other systems

 

Compatible with all makes and models of cars and trucks

 

Manual engine kill switch

 

Key based system prevents thieves from hacking wirelessly transmitted security codes

 

Does not draw battery power – system works even with a disabled car battery


6


SecureTech-P-TK-PP-TK100-Box-Top-(web)-(1-14-20).jpg 

 

SecureTech-P-TK-PP-TK100-Box-Bottom-(web)-(1-14-20).jpg 

Retail Package Top

 

Retail Package Bottom

 

Unlike our competitors’ products which are designed to primarily protect the automobile from unattended theft, we’ve developed Top Kontrol to put driver and passenger safety first while still protecting the automobile from theft, even while the engine is running.  We believe Top Kontrol to be the only anti-theft and personal safety automobile device able to thwart a carjacking attempt without any action by the driver.  

 

Through its advanced design and use of the licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.

 

Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.

 

For additional information on our Top Kontrol product, please visit our product website www.topkontrol.com.

 

Made in USA

 

SecureTech exclusively uses US contract manufacturers and labor to manufacture and assemble its products.  SecureTech does not have any long-term or exclusive arrangements with any single contract manufacturer and is free to change or negotiate with new contract manufacturers at its sole discretion.  This allows SecureTech to scale production levels as it deems appropriate.

 

All of SecureTech’s products proudly carry the “Made in USA” designation.

 

SecureTech commenced commercial production of Top Kontrol in January 2020.  We estimate that the lead time from the commencement of the first stage of production (procuring the various components) to completing assembly and having the finished product ready for sale to be approximately 14 weeks.  Based on this projected production timetable SecureTech anticipates generating its first retail sales from Top Kontrol in Q2 2020.

 

Competition

 

SecureTech faces formidable competition in every aspect of our business.  The success or failure of our business will depend largely upon the ability of our management to develop competitive products and properly market them to attract a sufficient number of new customers which will allow us to generate sufficient revenues to become profitable.


7


SecureTech will be competing against better established competitors with substantially greater financial resources and a longer history of operations.  Our competitors’ resources and market presence may provide them with advantages in marketing, purchasing, and negotiating leverage.  Some of our better known competitors include Viper (www.viper.com) and LoJack Corporation (www.lojack.com).  Below is a table providing a comparison overview of these competitors’ product offerings:

 

FEATURES

VIPER (1)

LOJACK (2)

TOP KONTROL

Electronic/engine Immobilizers

 

 

 

Kill Switch

 

 

 

Light and Siren

 

 

 

Electronic Tracking System

 

 

 

Carjacking Security Features

 

 

 

Automatic Secured for preventing carjacking

 

 

 

Automatic Secured features to prevent theft even if keys are left in the ignition and/or engine idling

 

 

 

Key based system to prevent interception of wirelessly transmitted security codes

 

 

 

Does not require a 24/7 power feed

 

 

 

MSRP

$499+

$695+

$449

 

(1)Viper 5806 car alarm model. 

(2)LoJack® Stolen Vehicle Recovery System. 

 

In addition to the competitors listed above, we will be 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 industry is large enough that we will be able to compete successfully against our competitors with our existing and future products.  However, it is important to note that the underlying product technology is always evolving and expanding with new competitors continuously innovating better products that could eventually outperform our then offered products or, worse, possibly render them obsolete.

 

Sales and Marketing

 

SecureTech intends to use a two-pronged approach to marketing for our current and future products to prospective customers, including direct marketing efforts and authorized dealer sales.  

 

Direct Marketing

 

SecureTech intends to build brand and product awareness through traditional marketing avenues, including:

 

 

Traditional paid advertising (e.g. periodical and trade publications, television, and radio)

 

 

 

 

Online and Social Media

 

 

 

 

Pay-Per-Click Internet Advertising

 

 

 

 

Free Media Exposure (e.g. free theft prevention and safety courses and videos)

 

 

 

 

Industry trade shows


8


 

Authorized Dealer/Licensed Installer Sales

 

SecureTech intends to internally develop a sales team of representatives that will sell SecureTech’s products to car dealerships (new and used), car audio stores, body shops, and other similar venues.  SecureTech will augment its own sales force with commission based independent sales representatives, both domestically and internationally.

 

Government Regulation

 

SecureTech will be subject to domestic and international laws and regulations that relate directly or indirectly to its products and operations.  These laws and regulations include common business practices, tax rules and securities regulations pertaining to the operation of its business, and product warranties and safety requirements.  SecureTech believes that the effects of existing or probable governmental regulations will be additional responsibilities of the management of SecureTech to ensure that it remains in compliance with all applicable regulations as they apply to the SecureTech’s products as well as ensuring that SecureTech does not infringe on any proprietary rights of others with respect to its products.  SecureTech will also need to maintain accurate financial records in order to remain complaint with securities regulations as well as any corporate tax liability it incurs.  

 

Compliance with Environmental Laws

 

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

 

Research and Development Expenditures

 

During the fiscal year ended December 31, 2019, we incurred $9,005 in research and development expenditures.  These expenses were related to the development of a housing mold and regulatory testing and compliance for our Top Kontrol product.

 

During the fiscal year ending December 31, 2020, we anticipate increasing our research and development expenses by approximately 200-300%.  

 

SecureTech presently developing a second automotive product that will be offered either as a standalone product or as an integrated upgrade to our current Top Kontrol product.  This new product is being engineered with a focus to help save the lives of infants and small children.  More information about this product will be released when prototype testing begins, which is anticipated during the second half of the current fiscal year.

 

Patents and Trademarks

 

We have exclusively licensed United States Patent No. 8,436,721 from Shongkawh, LLC, a related party.  Pursuant to the terms of the licensing agreement, SecureTech will pay Shongkawh two-percent (2%) of all gross sales generated on all products sold incorporating the technology covered by this patent.

 

On May 4, 2018, SecureTech filed two applications with the US Patent & Trademark Office (“USPTO”) to register the trademarks SECURETECH INNOVATIONS and TOP KONTROL.  These applications were assigned trademark serial numbers 87908006 and 87908032, respectively.

 

On December 18, 2018, SecureTech received a Notice of Allowance from the USPTO for the trademark TOP KONTROL.

 

Property and Equipment

 

Our principal executive offices are located at 2355 Highway 36 West, Suite 400, Roseville, MN 55113.  We lease this space for $996 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.


9


 

Executive Offices and Telephone Number

 

Our executive office and main telephone number is currently:

 

Executive OfficeTelephone and E-Mail Contact Information 

 

2355 Highway 36 WestTel:(651) 317-8990 

Suite 400E-Mail:info@securetechinnovations.com 

Roseville, MN 55113Web:www.securetechinnovations.com 

 

Jumpstart Our Business Startups Act

 

In April 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was enacted into law. The JOBS Act provides, among other things:

 

 

Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;

 

 

 

 

Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934;

 

 

 

 

Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;

 

 

 

 

Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and

 

 

 

 

Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.

 

In general, under the JOBS Act a company is an emerging growth company if its initial public offering ("IPO") of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of:

 

(i)the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,  

 

(ii)the completion of the fiscal year of the fifth anniversary of the company's IPO;  

 

(iii)the company's issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or  

 

(iv)the company becoming a "larger accelerated filer" as defined under the Securities Exchange Act of 1934.  

 

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact SecureTech are discussed below.

 

Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:

 

(i)audited financial statements required for only two fiscal years; 

 

(ii)selected financial data required for only the fiscal years that were audited; and 

 

(iii)executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)  

 

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. SecureTech is a smaller reporting


10


company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.

 

The JOBS Act also exempts the company's independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board ("PCAOB") after the date of the JOBS Act's enactment, except as otherwise required by SEC rule.

 

The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the company's accounting firm or for a supplemental auditor report about the audit.

 

Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the company's independent registered public accounting firm to file a report on the company's internal control over financial reporting, although management of the company is still required to file its report on the adequacy of the company's internal control over financial reporting.

 

Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.

 

Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The JOBS Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO.

 

Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Securities Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.

 

Election to Opt Out of Transition Period. Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.

 

The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. SecureTech has elected not to opt out of the transition period pursuant to Section 107(b).


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Item 1A.  Risk Factors

 

If any of the following risks actually occur, our business, financial condition and results of operations could be harmed and you may lose your entire investment.

 

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 ($282,577) in losses through December 31, 2019.  We have very little operating history upon which an evaluation of our future success or failure can be made.  We have not achieved profitability and expect to continue to incur net losses throughout the fiscal year ending December 31, 2020.  We expect to incur significant operating expenses and, as a result, will need to generate significant revenues to achieve profitability, which may not 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 have an adverse effect to 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. We may also be required to hire additional staff to comply with ongoing SEC reporting requirements. We estimate that the cost of maintaining SEC reporting status to be approximately $150,000 annually. As our business continues to grow and develop our financial statements and our SEC filings will become more complex, which we estimate will cause these compliance expenses to continue increasing annually, potentially substantially, which could have an unexpected material adverse effect on our business, results of operations, and overall financial condition.

 

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 February 21, 2020 which is part of the financial statements that are part of this prospectus.  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 in order to achieve growth or 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 a number of 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;

 

 

 

 

our ability to address the changing needs and desires of retailers and consumers;

 

 

 

 

the pricing, quality, performance, reliability, features, ease of installation and use, and diversity of our products;

 

 

 

 

the quality of our customer service;

 

 

 

 

product or technology introductions by our competitors; and

 

 

 

 

the ability of our contract manufacturing to deliver on time, on price, and with acceptable quality.

 

If we are unable to effectively compete on a continuing 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 product, Top Kontrol.  It is unclear whether this product and its features or other unanticipated events may result in lower sales than anticipated, which could force us to limit our expenditures on research and development, advertising, and general company requirements for improving and expanding our product offerings.  We cannot guarantee consumer demand or interest in our current or future product offerings, which could have a material adverse effect on our business, results of operations, and overall financial condition.

 

If the market chooses to buy our competitors’ products and services, SecureTech may fail.

 

Although SecureTech believes that its product offerings will be commercially viable, there is no verification by the marketplace that its products will be accepted by or purchased by customers. If the market chooses to buy our competitors’ products, it may be more difficult for SecureTech to ever become profitable which would substantially harm our business and, possibly, cause it to fail whereby you could lose your entire investment.

 

Consumer trends, seasons fluctuations, and general global economic conditions and outlook may cause unpredictable operating results.

 

SecureTech’s operating results may fluctuate significantly from period to period as a result of a variety of factors, including purchasing patterns of customers, competitive pricing, and general economic conditions.  There is no assurance that we will be successful in marketing our product, or that the revenues from the sale of our products will be significant.  Consequently, SecureTech’s revenues may vary significantly by quarter, and our operating results may experience significant fluctuations making it difficult to value our business and could lead to extreme volatility in our 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. In addition, unauthorized parties may attempt to copy aspects of our products and technologies or to 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 computer’s logic component or other technological devices from outside sources and will need to pay 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 if our products or to current or future technologies. These licenses or other rights may not be available on commercially reasonable terms or at all. The inability to obtain certain licenses or other rights or to 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


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results. Moreover, the use of intellectual property licensed from third parties may limit our ability to protect the proprietary rights in our products.

 

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 resulting from a future lawsuit, which could have a material adverse effect on our results of operations and financial condition.

 

The success of our business depends heavily on key personnel, particularly Kao Lee, and his business experience and understanding of our industry.  Our business would likely fail if we were to lose his services.

 

The success of our business depends heavily upon the abilities and experience of our principal executive officer Kao Lee.  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 which would survive the termination of his employment.  Mr. Lee can terminate his relationship with us at any time without cause.  Further, we do not 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 qualified new employees or retain existing employees, which may have a material adverse effect on our results of operations and financial condition.

 

Our directors currently control an aggregate of approximately 87.6% of our eligible votes in all voting matters.  Accordingly, our directors can solely determine and control all corporate decisions, even if such decisions may not be in the best interest of minority shareholders.

 

Our directors currently control an aggregate of 149,000,000 votes in all voting matters, or approximately 87.6%, of all eligible votes.  Accordingly, our directors can determine the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets.  The interests of our directors 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 his 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;

 

 

 

 

Future compensation agreements will not be negotiated at arm’s-length as would normally occur if the agreements were with unaffiliated third parties;

 

 

 

 

Acquisitions and purchases or sales of assets and other similar transactions can be made without due diligence or extended negotiation; and

 

 

 

 

Business combinations or the implementation 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 he is 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, none of whom can dedicate more than 50% of their professional time to SecureTech’s business operations.

 

Both Messrs. Lee and Vang spend their remaining professional time dedicated to Shongkawh, LLC, which is a private consulting firm specializing in developing personal and automobile security and safety devices and technologies.  One of the patented technologies developed at Shongkawh was licensed to us and is the underlying technical platform for our Top Kontrol product.  Without this patent license we would not have a product.

 

Despite Messrs. Lee and Vang’s heavily involvement in Shongkawh we cannot guarantee that it would license any future technological developments or patents to us again.  Further, there is no guarantee that should Shongkawh develop new useful technologies in the future that it would not license such technologies to a competitor or another company that could be controlled by Messrs. Lee and Vang.

 

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.

 

In the event that 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, whereby you may lose your entire investment.

 

We depend on contract manufacturers who may not have adequate capacity to fulfill our needs or may not meet our quality and delivery objectives and timetables.

 

We do not own our production lines or manufacturing facilities.  We manufacture our products in the United States through third-party contract manufacturers.

 

Our 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 discontinuance of the contractors’ assembly processes. Potential financial instability at our contractor manufacturers could result in us having to find new suppliers, which could increase our costs and delay our product and installation deliveries. These contractor manufacturers may also choose to discontinue contracting to build our products for a variety of reasons. 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.


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We will incur additional costs and management time related expenses pertaining to SEC reporting obligations and SEC compliance matter and our management has no experience in such matters.

 

Our officers and directors are responsible for managing us, including compliance with SEC reporting obligations and maintaining disclosure controls and procedures and internal control over financial reporting. These public reporting requirements and controls are new to our officers and directors and at times will require us to obtain outside assistance from legal, accounting, or other professionals that will increase, potentially substantially, our costs of doing business. Should we fail to comply with SEC reporting and internal controls and procedures, we may be subject 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 as a whole that is composed of independent directors. These functions of these traditional corporate committees are performed by our officers and directors. 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 be 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. We have not maintained liability insurance in the past, 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.

 

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 his or her entire investment. SecureTech’s business plan and objectives are also speculative, and we may be unable to successfully achieve those objectives. Shareholders in SecureTech may be unable to realize a substantial return on their investment, or any return whatsoever, and may lose their entire investment in SecureTech. For this reason, each prospective investor should read this Annual Report and all of its exhibits carefully and consult with their attorney, business advisor and/or investment advisor.

 

There is no market for our shares of common stock and we may never develop a market, which would render investors’ investment illiquid.

 

SEC Rule 15c2-11 was designed to allow non-reporting company’s securities to be quoted on The Financial Industry Regulatory Authority (“FINRA”) OTC Markets or other market by filing disclosures. Rule 15c2-11 requires market makers to review basic issuer information prior to publishing quotations for the issuer’s securities. Market makers must have a reasonable basis for believing that the information is accurate and from reliance sources.

 

If a security has eligible status, it means one or more market makers has received clearance to quote the issue on the OTC Markets within the last 30 days. During the “eligible” period, a frequency-of-quotation test is administered. The frequency-of-quotation test is based on whether a broker/dealer has itself published quotations in the security in the applicable interdealer quotation system on at least 12 business days during the preceding 30 calendar days with not more than four consecutive business days without quotations. Once this criterion has been satisfied, authorized participants may register online in a


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security. As long as the security remains in an “active” state, any participant may quote the security without a Form 211 submission.

 

Our common stock is not listed on any stock market or exchange, making the selling and trading of our shares exceedingly difficult. Without a secondary market, one is not easily able to sell or trade our shares after purchasing them, and therefore may be stuck with their shares, rendering them illiquid. We have not identified a market maker willing to submit a Form 211 application for a priced quotation on a market on our behalf, and there is no guarantee that a market maker will ever agree to submit a Form 211 on our behalf.  Further, even if we can identify a market maker willing to submit a Form 211 on our behalf, there is no guarantee that our application will be approved. And even if we are accepted, quotation on a market doesn’t assure that a meaningful market will be created and sustained. It is common, in fact, for newly listed companies to have a non-existent trading volume on any given day.

 

Any future market price for our shares may be volatile.

 

In the event we obtain a listing on an exchange, the market price for our shares is likely to be highly volatile and subject to wide fluctuations in response to various factors, including the following: (i) actual or anticipated fluctuations in our quarterly operating results and revisions to our expected results; (ii) changes in financial estimates by securities research analysts; (iii) announcements by us or our competitors of new services, strategic relationships, joint ventures or capital commitments; (iv) addition or departure of key personnel; and (v) sales or perceived potential sales of our shares.

 

We do not intend to pay any dividends on our common stock, therefore there are limited ways in which you can make a profit on any 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 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 stock, both common and preferred, 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 an investment 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 which 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 February 21, 2020 we could issue up to an additional 329,997,000 shares of common stock without shareholder consent.

 

We will be 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.


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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 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.

 

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 the transaction costs related to of our common stock.

 

Sales of our common stock under Rule 144 could reduce the price of our stock.

 

From time to time, certain of our stockholders may be eligible to sell some or all of their shares of our common stock by means of 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 February 21, 2020 we had 170,003,000 shares of our common stock issued and outstanding.  Of these shares currently issued and outstanding:

 

20,003,000 are freely tradable without restrictions (commonly referred to as the “public float”); and 

150,000,000 held by affiliates and are subject to the restrictions and sale limitations imposed by 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 are applicable 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.


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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 certain 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 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” are able to 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 being required to provide two years of audited financial statements in annual reports.  Decreased 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 certain 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, as a result 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.

 

We do not currently have independent audit or compensation committees. As a result, the 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, that 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 reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, if we are 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 because of our failure to include any statements necessary to make the statements not misleading.


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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 $996 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.

 

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 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 party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.

 

Item 4.  Mine Safety Disclosures

 

Not applicable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[This space intentionally left blank]


20


PART II

 

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities

 

There is currently no active trading market for our common stock.  We intend to apply to the Financial Industry Regulatory Authority (FINRA) through a registered broker-dealer/market maker to make a market for our common stock on the OTCQB during this fiscal year.  There can be no assurance, however, that this application will be accepted or, if accepted, that any trading market will ever develop or be maintained on the OTCQB.  Any trading market that may develop in the future for our common stock will most likely be very volatile and numerous factors beyond our control may have a significant effect on the market.  Only companies that report their current financial information to the SEC may have their securities included on the OTCQB.  We are currently considered a “reporting issuer”.  However, in the event that we lose our status as a "reporting issuer", any future quotation of our common stock on the OTCQB may be jeopardized.

 

As of February 21, 2020, the most recent cash sales price for shares of our common stock was $0.03.

 

Holders of Record

 

As of February 21, 2020, we had 170,003,000 shares of our common stock issued and outstand held by approximately 54 stockholders of record; this figure does not include any shareholders electing to beneficially own their shares through nominees such their stock broker or other financial institution.

 

Dividend Policy

 

We have never declared or paid cash dividends.  We currently intend to retain all future earnings for the operation and expansion of our business 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 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 cause a decline in the market value of our stock.


21


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.

 

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 the transaction costs related to of 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, and there are no conversion rights or 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 February 21, 2020 we had 170,003,000 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.  The issuance of preferred stock, however, 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 February 21, 2020 we had -0- shares of preferred stock issued or outstanding.

 

Share Purchase Warrants

 

We have not issued and do not have outstanding any warrants to purchase shares of our stock.

 

Options

 

We have not issued and do not have outstanding any options to purchase shares of our stock.

 

Convertible Securities

 

As of December 31, 2019, and February 21, 2020, 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 by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to


22


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 February 21, 2020 we had 170,003,000 shares of our common stock issued and outstanding.  Of these shares currently issued and outstanding:

 

20,003,000 are freely tradable without restrictions (commonly referred to as the “public float”); and 

150,000,000 held by affiliates and are subject to the restrictions and sale limitations imposed by Rule 144.   

 

The eventual availability for sale of substantial amounts of our common stock under Rule 144 could adversely affect 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 February 21, 2020 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 February 21, 2020.

 

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 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 to 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 to 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.


23


 

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 to 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 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.  These shares were subsequently cancelled by SecureTech’s Board of Directors.

 

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.  These shares were subsequently cancelled by SecureTech’s Board of Directors.

 

Purchases of Equity Securities by the Issuer and Affiliated Purchases

 

During each month within the fourth quarter of the fiscal year ended December 31, 2019, 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.  Selected Financial Data

 

Not applicable.

 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

SecureTech was incorporated under the laws of the State of Wyoming on March 2, 2017 under the name SecureTech, Inc.  We amended our Articles of Incorporation on December 20, 2017 to change our name to SecureTech Innovations, Inc.

 

SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies.  Through a licensed patent SecureTech has developed its initial product, Top Kontrol, which we believe to be the only anti-theft and personal safety automobile device that can thwart a carjacking attempt without any action by driver.  While our competitors’ products are engineered to flash lights and sound loud alarms when someone is tampering with a parked and unoccupied automobile, our Top Kontrol product is engineered to turn off the engine and completely disable the vehicle should someone other than the authorized driver attempt to drive the vehicle.

 

Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the


24


thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.  SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.

 

Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.

 

SecureTech commenced commercial production of Top Kontrol in January 2020.  We estimate that the lead time from the commencement of the first stage of production (procuring the various components) to completing assembly and having the finished product ready for sale to be approximately 14 weeks.  Based on this projected production timetable SecureTech anticipates generating its first retail sales from Top Kontrol in Q2 2020.

 

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 administration 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, 2019, we had incurred ($282,577) in losses since our inception on March 2, 2017.  We have not achieved profitability and expect to continue to incur net losses throughout the fiscal year ending December 31, 2020 and potentially into subsequent fiscal periods.  We expect to incur significant operating expenses and, as a result, will need to generate significant 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 have to successfully sell our current product, Top Kontrol, and continue to innovate and develop new similar personal and automobile security and safety devices and technologies that will be accepted by the marketplace.  We anticipate relying on equity sales of our common stock in order to continue to fund our business operations until we are able to 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 financing 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 sources of financing 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 assurance that future financing 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

 

For the ease of reference, we refer to the fiscal year ended December 31, 2019 as fiscal 2019 or the fiscal year ended December 31, 2019 and the fiscal year ended December 31, 2018 as fiscal 2018 or the fiscal year ended December 31, 2018.

 

Fiscal Years Ended December 31, 2019 and 2018

 

Revenues. We did not generate any revenue in fiscal 2019 or fiscal 2018.

 

Operating Expenses. Our total operating expenses for fiscal year ended December 31, 2019 were $61,286 compared to $168,467 for the fiscal year ended December 31, 2018, which represents a decrease of ($107,181), or (63.6%). The decrease in operating expenses is the result of lower expenses related to our efforts to obtain a public listing on the OTCQB, which have consisted primarily of legal, accounting, and outside consulting fees.

 

Loss From Operations. We generated an operating loss of ($61,286) from operations during the fiscal year ended December 31, 2019 compared to an operating loss of ($168,467) during the fiscal year ended December 31, 2018, which represents a decrease of ($107,181), or (63.6%).  The decrease in operating loss from operations is the result of lower expenses related to


25


our efforts to obtain a public listing on the OTCQB, which have consisted primarily of legal, accounting, and outside consulting fees.

 

Net Loss. We realized a net loss of ($61,286) during the fiscal year ended December 31, 2019 compared to a net loss of ($168,467) during the fiscal year ended December 31, 2018, which represents an decrease of ($107,181), or (63.6%). The decrease in the net loss is the result of lower expenses related to our efforts to obtain a public listing on the OTCQB, which have consisted primarily of legal, accounting, and outside consulting fees.

 

Total Stockholders’ Deficit. Our stockholders’ deficit was ($282,577) as of December 31, 2019.

 

Liquidity and Capital Resources

 

As of December 31, 2019, we had aggregate assets of $134,614, consisting of $133,069 in cash and $1,545 in deposits.  In Management’s opinion, SecureTech’s cash position is sufficient to produce our initial inventory of Top Kontrol and maintain our operations at the current level for the next 12 months without requiring additional financing.

 

As of December 31, 2019, we had total liabilities of ($100), which consisted of accounts payable of ($100).

 

Going Concern Consideration

 

Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

 

Off-Balance Sheet Transactions

 

We do not engage in off-balance sheet transactions.

 

 

CRITICAL ACCOUNTING POLICIES

 

Use of Estimates

 

The accompanying financial statements of SecureTech have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.

 

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, 2019 and 2018, 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:


26


 

 

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.

 

The estimated fair values of SecureTech’s financial instruments as of December 31, 2019 are as follows:

 

 

Fair Value Measurement at December 31, 2019 Using:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

 

 

 

 

 

 

12/31/19

 

Quoted Prices In Active Markets For Identical Assets

(Level 1)

 

 

 

Significant Other Observable Inputs

(Level 2)

 

 

 

 

Significant Unobservable Inputs

(Level 3)

Assets

 

 

 

 

 

 

 

 

 

Cash and equivalents

$

133,069

$

133,069

$

-

$

-

 

$

133,069

$

133,069

$

-

$

-

 

 

 

 

 

 

 

 

 

Liabilities

$

100

$

100

$

-

$

-

 

$

100

$

100

$

-

$

-

 

The estimated fair values of SecureTech’s financial instruments as of December 31, 2018 are as follows:

 

 

Fair Value Measurement at December 31, 2018 Using:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

 

 

 

 

 

 

12/31/18

 

Quoted Prices In Active Markets For Identical Assets

(Level 1)

 

 

 

Significant Other Observable Inputs

(Level 2)

 

 

 

 

Significant Unobservable Inputs

(Level 3)

Assets

 

 

 

 

 

 

 

 

 

Cash and equivalents

$

195,900

$

195,900

$

-

$

-

 

$

195,900

$

195,900

$

-

$

-

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Accounts payable

$

100

$

100

$

-

$

-

 

$

100

$

100

$

-

$

-

 

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 shares is computed similar 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, 2019 and 2018.


27


 

Revenue Recognition

 

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.

 

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, that 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 a 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.


28


Item 8.  Financial Statements and Supplementary Data

 

 

Table of Contents

 

Item

Page

 

 

Report of Independent Registered Public Accounting Firm

F-2

 

 

Balance Sheets as of December 31, 2019 and 2018

F-3

 

 

Statements of Operations for the fiscal years ended December 31, 2019 and 2018

F-4

 

 

Statement of Stockholders’ Equity for the fiscal years ended December 31, 2019 and 2018

F-5

 

 

Statements of Cash Flows for the fiscal years ended December 31, 2019 and 2018

F-6

 

 

Notes to the Financial Statements

F-7


F - 1


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 balance sheets of SecureTech Innovations, Inc. (the Company) as of December 31, 2019 and December 31, 2018, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2019, and the related notes and schedules (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, 2019 and December 31, 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

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.

 

The accompanying 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 net capital deficiency, 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 financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ M&K CPAS, PLLC

 

We have served as the Company’s auditor since 2017.

 

Houston, TX

 

February 21, 2020


F - 2


SECURETECH INNOVATIONS, INC.

BALANCE SHEETS

 

ASSETS

 

 

 

December 31,

 

 

 

2019

 

 

2018

Current assets:

 

 

 

 

 

Cash and equivalents

$

133,069

$

195,900

 

Deposits

 

1,545

 

-

 

Total current assets

 

134,614

 

195,900

 

 

 

 

 

Total assets:

$

134,614

$

195,900

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

100

 

100

 

Total current liabilities

$

100

 

100

 

 

 

 

 

 

 

Total liabilities

$

100

$

100

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

Preferred stock, $0.001 par value, 50,000,000 shares authorized

 

-

 

-

 

Common stock, $0.001 par value, 500,000,000 shares authorized;

    170,003,000 and 172,503,000 shares issued and outstanding,
    respectively

 

 

 

170,003

 

 

 

172,503

 

Additional paid-in capital

 

247,088

 

244,588

 

Accumulated deficit

 

(282,577)

 

(221,291)

 

 

 

 

 

 

 

Total stockholders’ equity (deficit)

$

134,514

$

195,800

 

 

 

 

 

Total liabilities and stockholders’ equity (deficit)

$

134,614

$

195,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F - 3


SECURETECH INNOVATIONS, INC.

STATEMENTS OF OPERATIONS

 

 

 

 

For the fiscal year ended

December 31,

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

General and administrative

 

21,131

 

41,605

 

Accounting fees

 

7,500

 

8,500

 

Consulting fees

 

19,881

 

38,167

 

Legal fees

 

3,769

 

80,195

 

Research and development

 

9,005

 

-

 

Total operating expenses

 

61,286

 

168,467

 

 

 

 

 

 

(Loss) from operations

 

(61,286)

 

(168,467)

 

 

 

 

 

 

Provision for income taxes

 

-

 

-

 

 

 

 

 

 

Net (loss)

$

(61,286)

$

(168,467)

 

 

 

 

 

 

Loss per share,

   basic and diluted

 

$

 

(0.00)

 

$

 

(0.00)

 

 

 

 

 

 

Weighted average number of common shares
    outstanding, basic and diluted

 

 

170,461,904

 

 

185,244,671

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F - 4


SECURETECH INNOVATIONS, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

For the period from December 31, 2017 to December 31, 2019

 

 

 

 

Additional

 

 

 

Common Stock

Paid In

Accumulated

 

 

Shares

Amount

Capital

Deficit

Total

Balance, December 31, 2017

183,048,000

$183,048

$25,393

($52,824)

$155,617

Issuance of common stock for services

200,000

200

5,800

-

6,000

Issuance of common stock for cash

6,755,000

6,755

195,895

-

202,650

Cancellation of common shares

(17,500,000)

(17,500)

17,500

-

-

Net loss

-

-

-

(168,467)

(168,467)

Balance, December 31, 2018

172,503,000

$172,503

$244,588

($221,291)

$195,800

Cancellation of common shares

(2,500,000)

(2,500)

2,500

-

-

Net loss

-

-

-

(61,286)

(61,286)

Balance, December 31, 2019

170,003,000

$170,003

$247,088

($282,577)

$134,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F - 5


SECURETECH INNOVATIONS, INC.

STATEMENTS OF CASH FLOWS

 

 

 

 

December 31,

 

 

 

2019

 

 

2018

Cash flows from operating activities:

 

 

 

 

 

Net (loss)

$

(61,286)

$

(168,467)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Issuance of common shares for services

 

-

 

6,000

 

 

Increase in accounts payable

 

-

 

100

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Increase in deposits

 

(1,545)

 

-

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

(62,831)

 

(162,367)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Issuance of common stock for cash

 

-

 

202,650

 

 

 

 

 

 

 

Net cash provided by financing activities

 

-

 

202,650

 

 

 

 

 

Net increase (decrease) in cash

 

(62,831)

 

40,283

 

 

 

 

 

 

 

Cash – beginning of period

 

195,900

 

155,617

 

 

 

 

 

 

 

Cash – end of period

$

133,069

$

195,900

 

 

 

 

 

Non-cash financing activities:

 

 

 

 

 

Share cancellation

$

2,500

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


F - 6


 

SECURETECH INNOVATIONS, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

 

 

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.

 

SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies.  Through a licensed patent SecureTech has developed its initial product, Top Kontrol, which we believe to be the only anti-theft and personal safety automobile device that can thwart a carjacking attempt without any action by driver.  Whereas our competitors’ products are engineered to flash lights and sound loud alarms when someone is tampering with a parked and unoccupied automobile, our Top Kontrol product is engineered to turn off the engine and completely disable the vehicle should someone other than the authorized driver attempt to drive the vehicle.

 

Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.  SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.

 

Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a licensed dealer.

 

SecureTech commenced commercial production of Top Kontrol in January 2020.  The lead time from the commencement of the first stage of production (procuring the product’s various components) to completing assembly and having finished product ready for sale is estimated to be about 14 weeks.  Based on this projected production timetable SecureTech anticipates generating its first retail sales from Top Kontrol in Q2 2020.

 

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, 2019 and 2018.

 

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 is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.

 

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, 2019 and 2018, the Company had no cash equivalents.


F - 7


 

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.

 

The estimated fair values of Company’s financial instruments as of December 31, 2019 are as follows:

 

 

Fair Value Measurement at December 31, 2019 Using:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

 

 

 

 

 

 

12/31/19

 

Quoted Prices In Active Markets For Identical Assets

(Level 1)

 

 

 

Significant Other Observable Inputs

(Level 2)

 

 

 

 

Significant Unobservable Inputs

(Level 3)

Assets

 

 

 

 

 

 

 

 

 

Cash and equivalents

$

133,069

$

133,069

$

-

$

-

 

$

133,069

$

133,069

$

-

$

-

 

 

 

 

 

 

 

 

 

Liabilities

$

100

$

100

$

-

$

-

 

$

100

$

100

$

-

$

-

 

The estimated fair values of Company’s financial instruments as of December 31, 2018 are as follows:

 

 

Fair Value Measurement at December 31, 2018 Using:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Description

 

 

 

 

 

 

 

12/31/18

 

Quoted Prices In Active Markets For Identical Assets

(Level 1)

 

 

 

Significant Other Observable Inputs

(Level 2)

 

 

 

 

Significant Unobservable Inputs

(Level 3)

Assets

 

 

 

 

 

 

 

 

 

Cash and equivalents

$

195,900

$

195,900

$

-

$

-

 

$

195,900

$

195,900

$

-

$

-

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Accounts payable

$

100

$

100

$

-

$

-

 

$

100

$

100

$

-

$

-


F - 8


 

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 shares is computed similar 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, 2019 and 2018.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. 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.

 

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the fiscal year ended December 31, 2019 or on prior periods.

 

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.

 

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 period ended December 31, 2019, the Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since its inception.  Further, as of December 31, 2019, the Company had an accumulated deficit of ($282,577).  These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.


F - 9


The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional sources of financing. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of 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 – STOCKHOLDERS’ EQUITY

 

Preferred stock

 

The Company has authorized 50,000,000 shares of preferred stock, $0.001 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, 2019, the Company had no classes and -0- shares of preferred stock issued and outstanding.

 

Common stock

 

The Company has authorized 500,000,000 shares of common stock, with a par value of $0.001 per share.

 

2018 Issuances/Cancellations

 

During the fiscal year ended December 31, 2018, the Company issued an aggregate of 200,000 shares of its common stock to outside consultants for services rendered in lieu of cash.  These shares had an aggregate issue value of $6,000, or $0.03 a share.

 

During the fiscal year ended December 31, 2018, the Company issued an aggregate of 6,755,000 shares of its common stock in exchange for $202,650 in cash, or $0.03 a share.

 

During the fiscal year ended December 31, 2018, the Company mutually rescinded two consulting agreements and subsequently cancelled an aggregate of 17,500,000 shares of its common stock.

 

As of December 31, 2018, the Company had 172,503,000 shares of common stock issued and outstanding.

 

2019 Issuances/Cancellations

 

During the fiscal year ended December 31, 2019, the Company mutually rescinded a consulting agreement and subsequently cancelled an aggregate of 2,500,000 shares of its common stock.

 

As of December 31, 2019, the Company had 170,003,000 shares of common stock issued and outstanding.


F - 10


 

NOTE 4 – INCOME TAXES

 

The provision (benefit) for income taxes for the years ended December 31, 2019 and 2018 were as follows, assuming a 21% effective tax rate:

 

 

 

For the fiscal year ended December 31,

 

 

 

2019

 

 

2018

Current tax provision:

 

 

 

 

 

Federal

 

 

 

 

 

Taxable income

$

-

$

-

 

 

 

 

 

 

 

Total current tax provision

$

-

$

-

 

 

 

 

 

Deferred tax provision:

 

 

 

 

 

Federal

 

 

 

 

 

Loss carryforwards

$

59,341

$

46,471

 

Change in valuation allowance

 

(59,341)

 

(46,471)

 

 

 

 

 

 

 

Total deferred tax provision

$

-

$

-

 

As of December 31, 2019, the Company had approximately $282,577 in tax loss carryforwards that can be utilized in future periods to reduce taxable income through 2039.

 

The Company provided a valuation allowance equal to the deferred income tax assets for the period from March 2, 2017 (inception) to December 31, 2019 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 – CONTINGENCY/LEGAL

 

As of December 31, 2019, and during the preceding ten years, no director, person nominated to become a director or executive officer, or promoter of the Company has been involved in any legal proceeding that would require disclosure hereunder.

 

From time to time, the Company 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 outcome cannot be predicted.  Any adverse result in these or other legal matters could arise and cause harm to the Company’s business.  The Company currently is not party to any claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on the Company’s business.

 

NOTE 6 – SUBSEQUENT EVENTS

 

No other material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements.


F - 11


Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

None.

 

 

Item 9A.  Controls and Procedures

 

Disclosure Controls and Procedures

 

For the period covered by this report we conducted an evaluation under the supervision and with the participation of our principal executive officer and principal financial officer we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act).

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be presented or detected on a timely basis.

 

Based on management’s assessment, we have concluded that, as of December 31, 2019, our disclosure controls and procedures were not effective in timely alerting management to the material information relating to us required to be included in our annual and interim filings with the SEC.

 

Management has concluded that our disclosure controls and procedures had the following material weaknesses:

 

 

We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function.  While this control deficiency has not resulted in any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties;

 

 

 

 

SecureTech lacks sufficient resources to perform the internal audit function and does not have an Audit Committee;

 

 

 

 

We do not have an independent Board of Directors, nor do we have a board member designated as an independent financial expert to SecureTech.  The Board of Directors is comprised of three (3) members; two of whom also serve as executive officers.  As a result, there is a lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by SecureTech; and

 

 

 

 

Documentation of all proper accounting procedures is not yet complete.

 

These weaknesses have existed since SecureTech’s inception on March 2, 2017 and, as of December 31, 2019, have not been remedied.

 

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the following:

 

 

Considering the engagement of consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures;

 

 

 

 

Hiring additional qualified financial personnel, including a Chief Financial Officer, on a full-time basis;

 

 

 

 

Expanding our current board of directors to include additional independent individuals willing to perform directorial functions; and

 

 

 

 

Increasing our workforce in preparation for exiting the development stage and commencing revenue producing operations.


29


Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants.

 

Internal Control over Financial Reporting

 

(a) Management’s Annual Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

 

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis.

 

Management has conducted an assessment, including testing of the effectiveness, of our internal control over financial reporting as of Evaluation Date. Management's assessment of internal control over financial reporting was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013 Framework). Based on that assessment under such criteria, management concluded that our internal controls over financial reporting were not effective as of December 31, 2019 due to control deficiencies that constituted material weaknesses.

 

Management has identified a lack of sufficient personnel in the accounting function due to the limited resources of SecureTech with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles.

 

We are in the process of developing and implementing remediation plans to address our material weaknesses in our internal controls.

 

Management has identified specific remedial actions to address the material weaknesses described above:

 

 

Improve the effectiveness of the accounting group by augmenting our existing resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures.  We plan to mitigate the segregation of duties issue by hiring additional personnel in the accounting department once we have achieved positive cash flow from operations and/or have raised significant additional working capital; and

 

 

 

 

Improve segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where appropriate.

 

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

(b) Attestation Report of the Registered Public Accounting Firm

 

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by SecureTech’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit SecureTech to provide only management's report in this Annual Report. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this Annual Report.


30


(c) Changes in Controls and Procedures

 

There were no significant changes made in our internal controls over financial reporting during the year ended December 31, 2019 that have materially affected or are reasonably likely to materially affect these controls. Thus, no corrective actions with regard to significant deficiencies or material weaknesses were necessary.

 

Item 9B.  Other Information

 

None.

 

 

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

50

President, Chief Executive Officer and Director

Anthony Vang

48

Treasurer, Secretary, and Director

Abdulcadir Haji

62

Director

Abdikarim H. Farah

50

Vice President

 

Our Board of Directors is comprised of only one class of director.  Each director is elected to hold office until the next annual meeting of shareholders and until his successor has been elected and qualified.  Officers are elected annually by the Board of Directors and hold office until successors are duly elected and qualified.  There are no arrangements, agreements, or understandings between non-management shareholders and management under which non-management shareholders may, directly or indirectly, participate in or influence the management of our business affairs.  The following is a brief account of the business experience of each of our directors and executive officers.  There is no family relationship between any director or executive officer.

 

Kao Lee is a co-founder and has served as our President, Chief Executive Officer, and a member of our Board of Directors since our inception in March 2017.  Mr. Lee concurrently serves as the President and Chief Executive Officer of Shongkawh, LLC (since its inception in 2009), a research and development firm focused on personal and automobile security and safety devices and technologies.  At Shongkawh, Mr. Lee’s responsibilities have included directing technological development, overseeing the phases of product marketing and promotion, and facilitating international relationships with technology buyers, particularly in Asia and Europe.

 

Mr. Lee is not currently an officer or director of any other reporting company and he intends to devote approximately 50%, or 20 to 25 hours per week, of his business time to our affairs.

 

Anthony Vang is a co-founder and has served as our Treasurer, Secretary, and a 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.

 

Prior to 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 general management of the company.

 

Mr. Vang is not currently an officer or director of any other reporting company and he intends to devote approximately 50%, or 20 to 25 hours per week, of his business time to our affairs.

 

Abdulcadir Haji is a co-founder and has served as a member of our Board of Directors since our inception in March 2017.  Mr. Haji concurrently serves as the President and Chief Executive Officer of African Resource Group, Inc., positions he has held since founding the company in March 2013.


31


Prior to founding African Resource Group and co-founding SecureTech, Mr. Haji served as the President of Xchange Associates, Inc. between 2005 and 2013, a small business consulting firm that provided startup companies, management, operations, sales and marketing solutions.

 

Mr. Haji is not currently an officer or director of any other reporting company and he intends to devote approximately 5%, or 1 to 3 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.

 

Prior to 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 the areas of sales and marketing strategies.  Mr. Farah continues to provide these consulting services through Addan & Associates.

 

In addition to the foregoing, 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 Senior Pharmacy Technician and Customer Representative.

 

Mr. Farah is not currently an officer or director of any other reporting company and he intends to devote approximately 25%, or 5 to 10 hours per week, of his business time to our affairs.

 

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 development stage business, 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 during the past ten (10) years in any legal proceedings that may bear on 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.


32


 

Potential Conflict of Interest

 

Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are 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 sole officer and director.

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.  In addition, since SecureTech does not have an Audit Committee, the Board of Directors is also responsible for the assessment and oversight of 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, require 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, 2019, all filing requirements applicable to our officers, directors, and greater than 10% percent beneficial owners were complied with and that there were no deficiencies.

 

Item 11.  Executive Compensation

 

The following table sets forth information with respect to compensation paid by us to our officers from inception on March 2, 2017 through December 31, 2019.  Our fiscal year end is December 31st.  No cash compensation has been paid to any of our officers from inception on March 2, 2017 through December 31, 2019.


33


 

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)

2019

2018

2017

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

 

Anthony Vang,

Treasurer, Secretary,

and Director (2)

 

2019

2018

2017

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

 

Abdulcadir Haji,

Director

 

2019

2018

2017

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

0

0

0

 

 

Abdikarim Farah,

Vice President

 

2019

2018

2017

 

0

0

0

 

0

0

0

 

0

0

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-. 


34


 

The following table sets forth information with respect to compensation paid by us to our directors from inception on
March 2, 2017 through December 31, 2019.  Our fiscal year end is December 31st.

 

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

Abdulcadir Haji

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 prospectus 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 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 discretion of the Board.

 

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, and we are not obligated to pay severance or other enhanced benefits to executive officers upon termination of their employment.

 

Officer Compensation

 

We intend to begin paying our officers reasonable cash compensation once SecureTech achieves sufficient levels of cash flow from the sale of its products later this fiscal year.


35


 

Director Compensation

 

We have no plans to begin paying our directors any cash compensation until our business becomes operationally profitable.  We may, however, 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 information regarding beneficial ownership as of December 31, 2019 by (i) each named executive officer, (ii) each member of our Board of Directors, (iii) each person deemed to be the beneficial owner of more than five percent (5%) of any class of our common stock, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, each person named in the following table is assumed to have sole voting power and investment power with respect to all shares of our common stock listed as owned by such person.

 

As of December 31, 2019, we had 170,003,000 shares of common stock issued and outstanding.

 

Unless otherwise noted, the mailing address for each shareholder 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

 

 

40.6%

 

Anthony Vang,

Treasurer, Secretary, and Director

 

 

5,000,000

 

 

2.9%

 

Abdulcadir Haji,

Director (2)

 

 

-0-

 

 

0%

 

Abdikarim Farah,

Vice President

 

 

1,000,000

 

 

0.6%

 

All officers and directors as a group (4 persons)

 

75,000,000

 

43.5%

 

 

 

Five Percent Stockholders

 

 

 

African Resource Group, Inc. (2)

 

75,000,000

 

44.1%

 

(1)Based on 170,003,000 shares issued and outstanding as of December 31, 2019 and February 21, 2020. 

 

(2)Mr. Haji does not directly own any SecureTech securities.  As of December 31, 2019, Mr. Haji served as a Director and President and CEO of African Resource Group, Inc. and had voting and dispositive power over these 75,000,000 shares of SecureTech’s common stock. 

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

As of December 31, 2019, we did not have any authorized Equity Compensation Plans.  Further, we have no plans to create any such plan or plans during the fiscal year ending December 31, 2020.


36


 

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 terms of the Licensing Agreement, ShongKawh is to receive a royalty of 2% of all products manufactured under this patent, which includes our Top Kontrol product.  The 2% royalty is based on SecureTech’s selling price of any products utilizing this patent, 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 which allows SecureTech 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 foregoing 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 directors, officers 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 has requirements that 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 listing standards of the NASDAQ Stock Market, which is the definition that the Board has chosen to use for the purposes of the determining independence, as the OTCQB does not provide such a definition. Therefore, our directors are not independent.


37


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,

 

 

 

2019

 

 

2018

 

 

 

 

 

Audit Fees

$

7,875

$

7,500

Audit Related Fees

 

-0-

 

-0-

Tax Fees

 

-0-

 

-0-

All Other Fees

 

-0-

 

1,600

Total

 

$7,875

 

$9,100

 

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

 

Given the small size of our Board of Directors, as well as 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.

 

 

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 set forth 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 or the notes thereto or that they are not required or are not applicable.


38


 

 

(3)Exhibits 

 

Exhibit

Number

 

 

Title of Document

 

 

Location

 

 

 

 

 

3.1

 

Articles of Incorporation

 

Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018

3.2

 

Bylaws

 

Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018

3.3

 

Amendment to Articles of Incorporation dated December 20, 2017

 

Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018

10.1

 

Patent License Agreement between SecureTech, Inc. and Shongkawh, LLC dated March 2, 2017

 

Incorporated by reference to registration statement on Form S-1 (File No. 333-223078) filed on February 16, 2018

31.1

 

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

31.2

 

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

32.1

 

Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

32.1

 

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

Filed herewith

101

 

XBRL Instance Document and Related Items

 

Filed herewith

104

 

Cover Page Interactive Data File

 

The cover page XBRL tags are embedded within the inline XBRL document

 

 

Item 16.  Form 10-K Summary

 

Not applicable.

 

 

 

 

 

 

 

 

 

 

[This space intentionally left blank. Signatures on following page.]


39


 

 

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 21st day of February, 2020.

 

 

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 amendment to the registration statement has been signed by the following persons in the listed capacities on February 21, 2020:

 

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

 

 

By:

/s/ Abdulcadir Haji

 

Abdulcadir Haji

Director


40